The “Bureaucracy vs. Financial Results” Case

►THE BUREAUCRACY vs. FINANCIAL RESULTSCASE◄

 

THE NEED FOR SPEED-

Since 1996 we have shared with clients and with audiences that, “speed is the only competitive advantage in business that costs nothing”.  While everything else in business has become more expensive and in many cases more risky, speed is still free and risk-free when approached mindfully.

Just as bureaucracy has never improved customer capture and retention it has also never improved enterprise speed.  In fact, as bureaucracy grows enterprise speed slows, with variable expenses nearly always growing at an exponential rate.

Work flow unfortunately becomes increasingly stagnant within increasingly bureaucratic organizations.

 

IN THE WORDS OF SEVERAL OF OUR CLIENTS-

Bureaucracy ranging from that which is noticeable to that which is excessive adds overhead, slows decision making, distracts from customers and financial objectives, creates internal friction, prevents risk taking, causes departures of the most highly capable employees, and very often removes customer interests from business decisions.  It contributes as much to positive financial results as the time of today’s sunset contributes except that the sunset never does damage to numbers.

On a large number of occasions, we have been retained out of client survival necessity to mitigate or eliminate this negative force.  During 14 of those engagements we have mapped the beginning of bureaucracy, the growth of bureaucracy, the commitment to and defense of bureaucracy, and the impact of expanding bureaucracy within client enterprises upon their brand, revenue, margin, profit and shareholder return prior to commencing the neutralization of their bureaucracy peacefully and in partnership with them.

 

 

THE CASE-

As in the case of colon polyps progressing to colon (large intestine) cancer, the bureaucracy cancer frequently takes as many as 6 to 15 years before it becomes impossible to reverse and heal.  It is a one-way street within both colons and enterprises, and without external screening and intervention both cancers are eventually fatal 100% of the time.  But, for one to as many as 8 years there tends to be no discernable illness symptoms noticed by most ill people and ill enterprises.

Colon Cancer Stage IV is present whenever that cancer has metastasized from the colon to any other body organs.  Enterprise bureaucracy cancer Stage IV is present whenever bureaucracy has spread from its originating department or work team to any other department(s) or work team(s).  Our client research indicates clearly that this bureaucracy cancer spreads noticeably more rapidly within business than colon cancer spreads within the human body, particularly when any new key executive is a misguided fan of such business cancer.

Endemic bureaucracy is more damaging to earnings than the most intense market competition is, and our executive and Board clients refer to it in the past tense as an Enterprise Stage IV Cancer (ES4C) with pointed words such as affliction, blight, disease, scourge, terror and villain.

 

CUTTING TO THE CHASE-

Within business, bureaucracy is any action, habit, methodology, leader preference or undertaking that does not translate into improved financial outcomes and/or internal efficiencies beginning in short order.  It includes any and all activities that are not focused upon enterprise mission as it relates to customers and financial results.

As one example within enterprises prone to meetings, a 4-hour meeting should…and should be required to…deliver twice the financial and/or efficiency improvements of a 2-hour meeting.  Likewise, a 12-person meeting should…and should be required to…deliver 4 times the financial and/or efficiency improvements of a 3-person meeting.  Conversely, a 1-hour meeting that delivers no improved financial and/or efficiency improvement results should have lasted zero minutes.  And as you might assume, any meetings where decisions are not made have no chance of creating improved financial and/or efficiency results except on a randomized basis not derived from such meetings.

You see, when the most capable people are hired, led and rewarded correctly there is very little and usually no need for meetings and other bureaucratic manifestations to coordinate employee and executive actions through what we call group grope meetings.

 

THE DNA OF BUREAUCRACY-

Bureaucracy is not born; it grows.  Similar to colon cancer it is not possible to cure ES4C without direct and targeted interventions, some of which are out of necessity as invasive as a flexible sigmoidoscopy is for the purpose of ending colon cancer.  Sometimes polyps must be removed and other times the colon and other organs need to be removed.

The reason forest fires are so effective at what they do is because they create their own winds with those winds generally being 10 times what ambient winds are before such fires ignite.  Enterprise bureaucracy is also fueled largely by its own wind.  In sum, bureaucracy and fire create the same damage.

While we cannot possibly know the level of bureaucracy symbiosis within your enterprise from a great distance if it might exist, it is our hope that it and the fuel that feeds it are non-existent for you, the people around you and the trail of destruction that is commonly left by it.

 

THE SYMPTOMS OF ES4C BUREAUCRACY-

These are 20 of the 40 easily discernible symptoms of detrimental bureaucracy negatively impacting enterprise financial results while in certain enterprises spreading like the flu or the plague until cured:

  • Inflated position titles when compared with individual position holder accountabilities, capabilities and responsibilities.
  • Reward system structures that are not founded upon market data and compensation best practices.
  • Meetings that occur on a highly repetitive calendar basis such as “The Weekly Tuesday Sales Meeting”.
  • Meeting titles with the word “Staff” included in the meeting title.
  • Meetings that do not end on time and do not become shorter with each meeting.
  • Meetings that include people who do not talk…or perhaps do not listen.
  • Senior executives who are seldom or never present in customer facing locations.
  • Circumstances where any executives or employees do not respond to communications on the date received at least 80% of the time.
  • Individuals without subject expertise challenging individuals with subject expertise.
  • Excess energy spent attempting to solve internal issues.
  • Cultural focus upon opinions and views instead of upon evidenced facts alone.
  • Reserved and named parking spaces.
  • Private secretaries.
  • Fear of being fired for any reason other than incompetence resulting in lack of production.
  • Rewards not differentiated according to individual contributions and production.
  • Burgeoning senior executive and/or middle management headcount beyond actual enterprise revenue growth rate.
  • Headcount that is growing within departments and functions insulated from customers and market forces such as Administration, Human Resources, Finance, Legal, Information Technology and Marketing.
  • Position titles such as “Chief of Staff” or any similarly rhythmic titles.
  • Lack of autonomy on the part of highly capable employees and executives.
  • Audits beyond those mandated for regulatory reasons.
  • “Dry runs” in advance of presentations.
  • Existence of institutionalized roadblocks to risk taking.

Please note that the existence of only a very small number (1 to 3) of these bureaucracy symptoms within any given enterprise will not create ruinous enterprise bureaucracy until bureaucratic metastasis occurs on what is frequently a naturally expanding basis.  However, when none of the above bureaucracy symptoms exist you may be assured that the enterprise has been vaccinated against this malady at least until a senior executive is hired who happens to be a proponent of injurious bureaucracy.

How to avoid that outcome will be presented here in a future Proven Solutions article from us.

Because bureaucracy measurably inhibits human and business performance please reach back to us with questions on this key topic or if you desire assistance that would rapidly benefit all stakeholders associated with your business.

 

 

To join over 3,200 other subscribers on our blog posting notification list (postings every 2 to 6 weeks) please Email us at Blog@peopleresults.com.

Also, please Contact us or call us at 1-480-467-0344 (USA) so that we may discuss, clarify or expand on any of the above points.

©2019, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

How To Know If Sufficient Candidate Soft Skills Exist

►HOW TO KNOW IF SUFFICIENT CANDIDATE “SOFT SKILLS” EXIST◄

 

FOREWORD-

Many businesses mistakenly hire and promote for work skills as opposed to contribution capabilities.  Said another way, they frequently hire for “fit” and then fire for “performance”.

Through background checks, employment applications, LinkedIn, resumes, and reference information, “Hard Skills” candidate assessment is the simplest candidate evaluation step for the employer to endure.  Those attributes are the majority or entirety of how candidates are evaluated and hired/promoted within many businesses.

The outcome of that approach frequently is the employment of individuals whose “Hard Skills” strengths are outweighed by their “Soft Skills” drawbacks.

This blog article will provide you with a few of our proven methods to avoid the many drawbacks of the above human capital methodology.

 

“HARD SKILLS” VERSUS “SOFT SKILLS”-

Hard Skills are functional abilities that are quantifiable and measurable. They are specific to individual position types and vary widely among position types and specializations. The Hard Skills of an accountant, janitor, surgeon, software engineer, CEO, airline pilot, artist or paramedic are different from each position type on a fundamental level. The majority of Hard Skills are taught, tested, and then either confirmed or certified/licensed.  They are what people are hired to do in terms of measurable job accountabilities and tend to be developed and refined over many years or decades.

Soft Skills are the talents related to interacting and working with other people, separate and distinct from functional abilities.  They are the talents of working cooperatively, dependably, pleasantly and productively with other people at all levels within and outside of the business.  These talents manifest themselves naturally beginning at a young age (high school) and also as the result of correction and guidance within the workplace at older ages beginning at about the age of 22.

Hard Skills and Soft Skills frequently exist within individual team members on an inversely proportional basis despite the fact that they must exist positively on a directly proportional basis in order for optimal business outcomes to occur universally.

Soft Skills can be developed rather easily within individuals when the correct methods are utilized, but it is always more beneficial and much less expensive to hire those skills in fully developed form.

 

SOFT SKILLS-

Some professionals mistakenly contend that Soft Skills are personality centered and not possible to change, measure or develop.  Nothing could be further from the facts.  Personality assessments do not measure Soft Skill talents because individual personalities are dynamic and change frequently, sometimes hour-to-hour.  To the contrary, Soft Skill talents must be as constant as showing up for work as expected.

We have not yet discovered any position type or title in any of the 27 countries within which we work that does not require both Hard Skill and Soft Skill talent sets.  Imagine an astronaut with endless Hard astronaut skills and few or no Soft Skills while living in a spaceship with 5 other astronauts for 3 weeks.

Soft Skills include the talents of exceptional communication, continuous learning, acceptance of responsibility, commitment to goals, continuous cooperation, consistent team contribution, rejection of business politics, continual focus on the needs of others including customers, and very high work ethic as a few examples.

Those talents are all observable, measurable and improvable, as well as highly beneficial to enterprise brand and financial results.

In summary, both talent sets are necessary within all employees at all levels of the enterprise in order for business outcomes to continually improve.

 

BUILDING ENTERPRISE SOFT SKILLS TALENTS-

Because we have frequently been called upon to follow the trail of destruction created by exceptional Hard Skills alone, we and our clients have learned that exceptional Hard Skills are not beneficial to the enterprise when not accompanied by exceptional Soft Skills.

We have 2 proven assessments that measure Soft Skill talents reliably and validly, with one assessment being for non-international and non-cross-cultural purposes and the other assessment being for international and cross-cultural purposes.  Please feel free to contact us on that subject at any time if you wish for this business challenge to be solved in simple form within your enterprise.

In the meantime, below are a few of the Soft Skills solutions developed by us and our clients over the last 27 years on how to know whether Soft Skill talents exist within individuals at a level beneficial to your business.  The individuals exhibiting these symptoms are assured to have many of the Soft Skills now required for improving business results in this increasingly global environment:

  • Lack of nervousness.
  • Exceptional time management and dependability.
  • Questioning to learn, instead of to challenge or correct.
  • Consistently pleasant facial expressions with steady eye contact.
  • Recognition of skills that they do not possess and also wish to learn.
  • Hybrid functional abilities (more than one knowledge/experience set).
  • You feel more energized after meeting them than you did prior to meeting them.
  • Expressions that all or most prior work experiences were enjoyable and rewarding.
  • Very rapid responsiveness with no excuses, including responses to Email and Voice Mail.
  • Inability to be distracted because Soft Skill talents disappear during times of distraction. (More Frequently Distracted = Less Soft Skills.)

We have 7 clients in 4 countries that have dramatically improved their operating margins and pretax profits during the last 18 months by doing this right.  And in 4 of those instances the clients have found recruitment and retention to now be infinitely easier and much less expensive than prior to making the improvements discussed above.

You may be assured that giving equal weight to Hard Skills and Soft Skills when determining who to hire and who to promote (and also, who to fire) will pay very large dividends to you and your enterprise in exceedingly short order.

 

 

To join over 3,100 other subscribers on our blog posting notification list (postings every 2 to 6 weeks) please Email us at Blog@peopleresults.com.

Also, please Contact us or call us at 1-480-467-0344 (USA) so that we may discuss, clarify or expand on any of the above points.

©2019, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

Preventing Reward System Death Spirals

PREVENTING REWARD SYSTEM DEATH SPIRALS

Occam’s Razor is a principal attributed to Middle Ages Philosopher and Franciscan Friar William of Occam.  It asserts that when solving problems people should select solutions with the fewest possible assumptions in order to dramatically reduce ambiguities, inconsistencies and failures.  Unfortunately, on subjects of enterprise compensation this principle is frequently lost while dubious opinions, preferences and false information corrupt or replace factual data and proven practices.

Our compensation practice is frequently called upon by new and long-term clients due to the proliferation of disputable and frequently false information regarding the compensation amounts required to be competitive for given positions within the geographies and labor markets where our clients exist.

Misleading and unreliable compensation data as well as interpretation errors have been proliferating increasingly since Glass Door, Indeed, PayScale and Salary.com arrived noticeably on the Web beginning about 9 years ago.

DETERMINING COMPETITIVE COMPENSATION-

Using yesterday’s market compensation levels is not adequate to attract, retain, motivate, and engage employees today for the purpose of improving your enterprise’s financial and operating outcomes.   Too much has changed during the last 4 years, too many position types have either decreased or increased in terms of demand and common compensation amounts, and unemployment is now hovering near 3.8%.  January 2019 U S wages increased by 0.76% over October 2019’s data.  Basing employee and executive compensation amounts and methodologies on current and accurately predicted future reality is always in the best interests of customers, employees, financial statements and shareholders.

Competitive compensation is a data subject purely and simply to the same degree that a person’s height is.  When performance feedback systems and compensation structures are simultaneously rooted in factual numeric data analyzed by appropriate comparative metrics (industry, location, revenue, production, etc.), the common distractions of false information, philosophies, imaginary dollar figures, negotiation, and internal politics are shaved off by Occam’s Razor while then being washed down the drain.  Payroll expenses and enterprise outcomes then become relationally linked, and competitive/equitable compensation positioning becomes assured in short order.

However, when compensation data is pulled out of the imagination or the sky as some individuals and consultants prefer, things head south rather noisily.  It is common practice that certain data providers are still distributing data that was collected as long as 9 years ago while simplistically aging all of that data by about 2% per year while mistakenly assuming that compensation patterns for all positions and years exist on a linear basis.  BUT, Switchboard Operators as only one example no longer exist, and during that same 9-year period actual compensation on an individual position basis has moved between +7.8% and -2.7% per year.  Unfortunately, the more false information you utilize the more false your enterprise compensation system becomes.

Human Capital is the first or second most expensive operating cost within approximately 93% of businesses.  It is also the cost that tends to be most prone to  errors, excesses, and manipulations.  After all, when was the last time any person within your enterprise suggested that given position titles be compensated at lower amounts?

When factually reliable competitive compensation data is sought, utilized and responded to wisely enterprises tend to avoid rotting slowly or rapidly from the inside out.

THE DANGEROUS DIVERSION-

During the last 9 years, the proliferation of web-based mass market compensation purveyors has misled hundreds of enterprises and hundreds of thousands of employees on the subject of what amounts should be paid to employees for given jobs.  Thankfully our international clients do not face this danger because 3 of the 4 firms referenced above operate only within the USA.

The bigger compensation conflagration is that one of the 4 firms referenced collects and reports only nebulous compensation information as supposedly provided by “anonymous” position holders based upon position title alone with no proof or attribution, as opposed to real data being provided by employers with payroll records as a foundation.  That firm is a hearsay company as opposed to a data company and is of no legitimate use to employers.

We suggest that you let that sink in while knowing that the back of the houses from which such information propagates are usually Houses of Cards that are as unsettling to observe as a bologna factory during the overnight shift.

Please understand that when a consulting firm or data provider peddles supposed compensation data without requesting or reviewing position descriptions and organization charts (as well as 4 other crucial items) they are at best misleading the recipient of such information, in this case you.  After all, when the data is either false or problematic there is no need to do anything else correctly.  Contacting those firms with questions about their data to confirm its reliability is always futile and we are retained 10 to 14 times each year to clean up such chaos for our new clients.

As an analogy, if you should suffer chest pains for 2 days, information must be provided to and questions must be asked of you by your physician, with that data then being thoroughly reviewed rapidly (remember…it is chest pains) and explained to you by that same physician before surgery is scheduled.  Multi-dimensional reality is fundamental for both cardiac and compensation interventions because both human and enterprise health require it.

THE SOLUTION TO THIS QUANDARY-

The 2 diagrams below provide many of the answers to the common quandary of how to prevent reward system death spirals and you will likely recognize at least some of the included guardrails.

This first methodology map briefly summarizes our approach to ensuring that your enterprise gains from its competitive compensation position without excess expense, with the numbers included with each methodology factor allowing you to cross-reference with the deeper details about each factor provided within the second methodology map included below (for a larger and printable/savable copy of this graphic, please click Here):

This second methodology map provides the crucial details of our technique to ensure that your enterprise gains from its competitive compensation position without excess expense, with the numbers included with each methodology factor allowing you to cross-reference with the summary items provide within the first methodology map included above (for a larger and printable/savable copy of this graphic, please click Here):

THE LARGE COST OF DOING THIS WRONG-

Wrongful competitive compensation information and resulting decisions are unfortunately never translated onto the General Leger as an “error expense”.  Nonetheless, a U S services sector client of ours calculated in November 2018 that their earlier error resulting from false market data provided by one of the above referenced firms had cost them an avoidable 3.61% of total payroll costs during the prior 12 months totaling $974,700, also a period within which employee turnover had fascinatingly increased dramatically.

Doing this correctly costs much less than either not doing it or doing it incorrectly and when the client enterprise financial results of doing it correctly are calculated, doing this all correctly is inevitably found to cost less than nothing.

Additionally, for enterprise performance purposes there is something very beneficial about employees and executives knowing factually that they are being rewarded competitively while not being distracted by false information from either the grapevine or the Web.

 

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points or you may visit Here for further information on this subject.

©2019, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

 

Best Contributors For Business Growth

►YOUR BEST CONTRIBUTORS FOR BUSINESS GROWTH◄

On January 21st we were contacted by the President of a large public company in Texas on referral from a long-term client of ours based in Los Angeles.  His company is in significant growth mode and he posed a question facing all rapidly growing enterprises, sometimes without their knowledge at their own peril.

His question was, “We are in rapid acquisition and growth mode.  How do we separate the wheat from the chaff while knowing with certainty who our highest capability and best contributors will be for 4 years of significant growth, major change, and at least 2 acquisitions?”  We then talked for 25 minutes on this subject before he asked that we meet at his office on February 5th.  The essence of what I shared by telephone was that the solution to his concern is usually quite simple.


THE CAPABILITIES OF BEST CONTRIBUTORS

During times of acquisition and growth 2 of the 9 most important capabilities of Best Contributor executives who create exceptional near-term AND long-term business result improvements without resulting “Neutron Bomb” destruction (see below) are:

  • Best Contributors are followed energetically by other employees and executives while inspiring consistent focus upon strategic objectives, while having themselves produced measurable numerical result improvements during the prior 24 months at a minimum.  Best Contributors with very long half-lives of contribution tend to have a following crowd that is forever growing as well as no symptomatic drawbacks of non-Best Contributors.  After all, how can results grow exponentially unless the crowd growing the results grows exponentially?   And, differentiating those 2 populations using accurately predictive techniques is crucial.    Most important, Best Contributors are always focused nearly exclusively upon customers and numerical results and NOT upon meetings, PowerPoint’s, conferences, unnecessary travel, excessive small talk, work absence, endless analyses, association certifications, passing fads, internal politics and esoteric subjects.  And,
  • Non-Best Contributors tend to have fairly universal limitations such as the 11 capability limiters included within the last sentence of the above bullet point.  For instance, no persons who are distracted by endless analyses and esoteric subjects can possibly be Best Contributors to business success even if they disguise themselves otherwise.  Non-Best Contributors nearly always exhibit symptoms of non-contribution and passive damage that are subtle in comparison to the roadblocks they create and what they generally are unable to produce for improved efficiencies and results.  These limitations can be either subconscious or disguised for the purpose of self-preservation in order to continue receiving paychecks.  Yes, non-Best Contributors frequently impersonate Best Contributors and they tend to have 1 to 3 vocal supporters usually within their same enterprise silo.  Best Contributors tend to have 4 to 400 vocal supporters within many enterprise silos.  It is important that key leaders always be mindful of these limiting attributes that are commonly missed by non-discerning individuals as could have otherwise occurred in the image below regarding a non-Best Contributor in the vehicle’s driver’s seat.  In this case the officer was discerning about the non-Best Contributor evidence painted on the vehicle trunk that many other people would either miss or not accurately translate.

 


THE PRIMARY JOBS OF KEY LEADERS

Knowing with clarity and reliability who your Best Contributors are is crucial to acquisition and business growth success, as well as continually improving financial results.

Your primary jobs as a key leader are to replicate your Best Contributors, recruit and retain only Best Contributors, rapidly develop those who are able to become Best Contributors, and create continuously improving numerical results through your Best Contributors.


IF ANY OF THEM EXIST, DISMANTLE YOUR INTERNAL NEUTRON BOMBS

The W-70 “Neutron Bomb” was war ordnance developed by the USA beginning in the late 1950’s and was very widely protested throughout Europe between 1977 and 1982.  It was a bomb designed to “kill humans while leaving buildings standing”.  It was never actually utilized in combat and the last W-70 in existence was dismantled in 2011.

“Neutron Bomb” enterprise destruction occurs at the hands of Non-Best Contributors who create results while damaging or destroying people.  In business under that circumstance all buildings remain standing while many people do not, resulting in what has been commonly referred to as “brain drain” and what we tend to refer to as “enterprise death on the installment plan”.

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2019, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

Damage From Distraction

DAMAGE FROM DISTRACTION-

A significant challenge that we are frequently retained by clients in 6 countries to rectify is what they describe as “an inability to get things done around here as quickly as they need to be done”.  Their usually stated symptoms include reduced labor efficiency, increased variable expense, excess meetings, laborious decision making, customer losses, financial results slippage, recruitment difficulty and/or increasing employee turnover.

We have found almost without exception that employees and executives within those businesses have not become less capable; they have instead become more distracted.  Such distractions are classified by us as “Stranded Time”.

Metastasizing distraction is an insidious destructive force in terms of financial results and enterprise brand 100% of the time.

Our services revolve significantly around Inefficiency Elimination and Distraction Mitigation.  If you have sensed growing internal results roadblocks you may rest assured that you are not alone, and that distraction and/or inefficiency are likely underlying causes.

While many organizations relish calling themselves Continuous Learning Environments, they sometimes forget that much more learning occurs at more rapid paces of contribution than occurs at slower rates of contribution.  That is largely because more failures and more successes (learning experiences) occur at higher speeds…with less money then needing to be spent on training, additional headcount and rework.

For decades, many executives and businesses have had great difficulty establishing, defining, correcting and improving enterprise cultures in order to grow operating and financial results because enterprise culture has in many cases evolved over time from limiting and frequently dubious enterprise habits.

Because culture is talked and commiserated about frequently without being acted upon, we have learned that “Culture improvement is more easily DONE than SAID.”   When approached shrewdly, culture and business outcomes improvement can be accomplished easily, peacefully and rapidly to the benefit of all stakeholders.

Here is one of the 7 Holy Grail’s on this culture subject, and Nike has said the same thing using different words since 1988:

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2019, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

The Necessity Of Mandatory Execution

-THE NECESSITY OF MANDATORY EXECUTION-

An increasingly frequent enterprise performance roadblock is that of individual leaders and/or leadership teams unable to get things done on a timely basis.  Analyses are completed, meetings occur, decisions are either avoided or delayed, lists of things waiting to be done lengthen, and results remain constant.

One Midwest USA CEO during our initial meeting on this subject told us several months ago, “I am wondering where the balls are in our ball game”.

This organizational tendency is generally not self-correcting and nearly always has its Genesis in lack of execution on the part of one or several senior and middle executives.   And its result tends significantly to be excess headcount that feeds the cancer of metastatic human capital ineffectiveness.  Said another way, diminishing human capital productivity is the primary outcome of lacking execution by leaders… and almost always, nothing else.

This form of organizational failure is usually evidenced by increasing numbers of decision, operational and/or financial result deadlines being missed. Inevitably, as this pattern continues for 2 to 4 months the cause of these failures becomes wrongfully as having no connection to the leader(s).  In fact, the cause is nearly always what we call “self-contradictory” leaders.

These self-contradictory leaders are usually the individuals who:

◊ are supposedly busy all or nearly all of the time.
◊ when they travel for business, their outgoing voicemail messages say something similar to, “I will have limited access to voicemail and email, so please contact blah-ba-dee-blah for assistance”, while forgetting about their company paid smartphone on their waste.
◊ operate on a late or absent basis under most or all circumstances.
◊ tend significantly to hire and promote “B’s and C’s” instead of “A’s”.
◊ frequently postpone or change discussion and meeting commitments.
◊ are very frequently unwilling to return or at least acknowledge communications on the day any such communication is received.

The role of leaders at any organizational level is to see everything, while doing everything they say they are going to do when they say they are going to do it. For instance, if a leader has a seat on Air France Flight #85 leaving for Paris from San Francisco out of Gate 34 at 9:05 PM, and arrives at the correct gate at 9:10 PM, it is no more and no less of a damaging failure than not meeting a business response or result requirement and deadline.  Inevitably he or she loses money, misses an opportunity, and/or messes other people up.

When you are able as a leader to see everything, you are also able to see around corners with great accuracy. And on the other side of this particular corner is organizational inefficiency and increased variable costs either created or enabled by the leader who should have learned something important from their failure to board Air France Flight #85.

Some of our most effective solutions to this burgeoning enterprise performance and execution roadblock are:

◊ Include deadline compliance within executive and management reward systems, summing to 15% to 25% of target and actual incentive payouts.
◊ Fully utilize network calendars and define starting and ending times of all calendar items as being mandatory.  Be late for and non-responsive to nothing.
◊ Begin and end discussions and meetings precisely on time without regard to who is scheduled to participate but is mistakenly absent.  When meetings are scheduled to end, everyone should depart to execute other commitments, including occasionally the commitment to end meetings quickly.  And if any meeting should start late, everyone should still depart at the time indicated on their calendar. Meetings that run late cause organizations to run even later.
◊ Quit the nonsense of meetings when all that is necessary is a decision within one’s authority followed by communication of that decision.
◊ Never use an unexpected challenge as an excuse.  Unexpected challenges can nearly always be added to one’s calendar for a time 5 minutes to 5 days from now.  The only challenges that should change anything are those involving someone either in a hospital or a funeral home.
◊ Operating at the “beck and call” of any person proves that person to be both subservient and lower level.  If one is paid less than $40,000 per year and has no employees reporting to them, that is okay.
◊ When surprises happen today, spend less time on each item now waiting to be dealt with.  15-minute conversations can nearly always become 3-minute conversations for the rest of the day.
◊ When another individual fails to execute on a timely basis never do that part of their job for them, and assume no responsibility for their failure.
◊ Respond to every telephone message and every email by the end of that day or by the next morning.  And require that all those you interface with do the same.  Non-responsiveness is always directly correlated with lack of execution.
◊ Remember that the only opportunity for learning more is when one’s list of things to do is continually either shortened or eliminated. And also, that the only competitive advantage that your enterprise has that costs it nothing happens to be speed.

Nobody ever followed an undependable person anywhere.  And just as a rooster crowing does not cause the sun to rise, being busy and failing to execute does not contribute to enterprise performance and success.

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2018, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

Executive Hiring…Improving Their Return On Your Investment

-EXECUTIVE HIRING…IMPROVING THEIR RETURN ON YOUR INVESTMENT-

Our last article, “Ensuring That Your Performance And Reward Systems Do Not Do Compensatory Damage”, engendered a great deal of interest and a large number of readers asked us to specifically touch upon our experience and recommendations in the area of executive hiring and compensation. As a result, some thoughts are outlined below. During the last eighteen months executive turnover has become higher than it ever has been in history, throughout nearly all developed nations. For our purposes, “executive” is defined as employees with base compensation in excess of $150,000 or its equivalent.

2000 was the best year in history for executive search firms in the United States, the United Kingdom, Europe and Latin America, and 2001 showed little abatement. According to our contacts in the U.S. and international executive search communities approximately 50% of that activity has resulted from voluntary executive departures, approximately 30% of that activity has resulted from involuntary executive departures, and approximately 20% of that activity has resulted from newly established executive positions. At the same time senior executive total compensation has, in general terms, climbed substantially in comparison to other employee populations. From a business perspective, despite varying opinions on the subject, that is neither good nor bad. It has, however, contributed to the likelihood of executive departures as the economy turns around.

Quality Leadership

Company performance is more heavily impacted by the quality of leadership throughout a company than it ever will be by how much “underpaid” or “overpaid” its leaders are. Whether an executive is “underpaid” or “overpaid” is in no way tied to the quality of his or her leadership skills. Paying a leader an excess amount will not make him or her a more effective leader, or improve the financial and competitive results of the organization. Additionally, in all cases where executive and employee compensation is directly tied to organizational results, “underpaid” or “overpaid” is immaterial because the pay is directly caused by the organization’s results. Concerns about excess executive pay seem to occur largely within organizations where pay is not tied directly to traceable organizational results specifically created by the executive, exclusive of the broad market.

The best leaders, those who create or enable positive results most effectively, do so without excess concern about how much they are paid. They have other things on their mind and that will become more evident as you continue reading this article. Coincidentally, we have found that they also spend more time concerned about how effectively their team is being rewarded and whether that reward system is supporting the business results that the leader envisions. That concern, specifically, is what creates reward system alignment within organizations. It is also much of what makes successful organizations effective.

Compensation Preference

From a psychological standpoint, money tends to be an exclusive interest for those who are consumed by it. Said another way, those who are consumed by money tend to be quite disinterested in most or all other interests, to the detriment of the organization. We say that because money is inanimate. Organizational results occur because of animate relationships and interactions, the most important of which is that which occurs with and among customers and employees. If the picture is emerging in your mind that excess personal focus on compensation results in diminished animate relationship skills and hence, leadership abilities, you are correct. More important, we have found the following to be true after nearly four years of research:

The degree to which an executive’s total compensation is directly, proportionally and immutably tied to all expected organizational results (revenue, profitability, return on investment, customer retention, market share, shareholder value, customer acquisition and retention, employee opinions and productivity, earnings per share, EVA, etc.) is directly proportional to organizational results and inversely proportional to leadership shortcomings and executive turnover, whether voluntary or involuntary. Largely or completely ineffective executives and leaders have no interest in being paid according to the entirety of the first eight lines of this paragraph. The best executives, those who contribute the most while enabling the greatest level of organizational performance, demand to be paid according to the first eight lines of this paragraph. Those who do not demand so are simply not the most effective executives available for your organization.  One of the first questions most of our clients ask executives being considered for employment with their organizations is, “Could you give me very specific details of how you feel you should be compensated?”  To our clients, that is a pass/fail question.

We have summarily raised the subject of compensation within this article because it tends to have a monumental effect on the capability set that executives bring to the table. The compensation requests of your candidates for executive positions largely indicate their capacities as effective leaders. Some of the other attributes of the executives who will contribute the most to your organization, when you are looking to hire them, tend to be:

They are driven to compete exclusively against current and future direct and indirect competitors of your organization. Under no circumstances do they engender or allow internal competition for recognition, rewards, trips, or special treatment. There is no east region versus west region. The entire team vents all competitive force externally.

  • They never allow “busy-ness” to derail or slow forward progress. In their mind, being “busy” is a sign of inefficiency. They also believe that “now” precludes “never”.
  • Their cellular telephone bills are excessively low because they have mastered the skill of delegation and because they build relationships through many other more effective means.
  • They dress like the people with whom they are interacting so that interaction can, in fact, occur.
  • They spend substantial time “in the trenches” and “out in the field” in order to retain an informed operationally focused strategic mindset.
  • They are more interested in the organization’s goals and rewards other than stock options than they are in the stock options themselves.
  • They have an acute ability to see through and correct the political endeavors of their direct reports and the direct reports to those individuals.
  • They laugh and smile a great deal and that is much of what draws people to them as “followers.”
  • They are equally outstanding at both strategy development and tactical implementation. The best strategies are those that are derived by people with implementation abilities. Executives who are very good at implementation tend to be exceptionally good at creating human alignment and eliminating human conflict during both strategy determination and implementation.
  • They have no intention of immediately “bringing in their own team” after being hired because they clearly understand that leadership means having the ability to lead and quickly develop, with very positive results, at least 90% of any employee population they inherit regardless of the population’s shortcomings.  They NEVER bring other employees and executives with them from their former employer within 6 months of taking a new executive position.
  • They embrace the fact that their new company is entirely different from their prior organization.  As a result, they resist all urges to bring anything from their old organization (staff, philosophies, cultures, etc.) with them into their new organization.
  • They tend to display no narcissistic tendencies whatsoever.
  • They answer their own telephone frequently, proving that they prefer not to construct communication and relationship barriers.
  • They take all steps necessary to remove “politics” from the workplace, thus engendering a culture whereby performance and contribution alone control individual success.

Assuming your total compensation offer to them is competitive and reflects their prior results, proven capabilities and expected contribution, they spend no time whatsoever attempting to negotiate individual compensation program attributes (number of vacation weeks, target incentive, travel benefits, company car model, stock options, base salary, spousal benefits, etc.). Individuals who attempt to endlessly negotiate individual compensation package attributes tend to lack strategic foresight while being internally focused instead of organizationally focused.

Conclusion

The key challenge is for your organization to have the best possible leaders. Each of the above thirteen points is very easy to assess during the selection and hiring process, with 100% accuracy. By utilizing these guidelines along with reference and background checks, psychometric assessments and multiple interviews when hiring executives, many of our large and smaller clients have found that their organizational results and executive contributions have, not coincidentally, improved both dramatically and immediately.

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2015, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

Ensuring That Your Reward And Performance Management Systems Do Not Create Compensatory Damage

-ENSURING YOUR REWARD SYSTEMS DO NO “COMPENSATORY DAMAGE”-

A universal and expensive challenge for each and every business around the globe is that of compensating employees for their efforts. This challenge is more complex in the United States than in most other countries due to the convergence of federal, state and local laws and because of the presence of many pay methods within U.S. business. Unfortunately, many organizations pay their employees only for their “efforts” rather than for their “results”. More importantly, the most effective guiding principle of compensation. . .that organizational results are much more important than individual results. . .is not currently evidenced at any level within the compensation systems of the vast majority of organizations.

“Compensatory damage” has hugely detrimental effects to the financial performance of the organization. It results in significantly reduced human productivity, increased human conflict within the organization, perceptions of internal unfairness, disconnection from customers, excess variable costs, and diminished financial performance. It has a tendency to go unnoticed, however, during periods of increased revenue and/or profitability and is easily temporarily overshadowed by macroeconomic forces.

Symptoms of Compensatory Damage

Some of the easiest ways to tell whether “compensatory damage” is occurring within an organization are through the following symptoms, among others:

  • Performance management and appraisal systems in use are heavily or exclusively subjective in design instead of objective in design.
  • Single-rater feedback (boss to subordinate) is the methodology of performance appraisal instead of multi-rater feedback.
  • Performance management systems in use are not specifically designed for the market or industry within which the organization operates.
  • Variable pay is absent at any of the employment levels within the organization. In other words employees’ pay is not directly tied, in any way, to organizational or team performance and results.
  • The organization is heavily influenced by union(s), cost of living allowances, or across-the-board compensation adjustments.
  • There is more than a 230% variance in total compensation between any management or executive employees who work closely together, or between any non-management employees who work closely together, with or without a reporting relationship. An example of this is the difference between a flight attendant’s compensation ($33,000) and a pilot’s compensation ($245,000), a 742% variance, or the difference between a company President’s compensation ($280,000) and a company Chairman’s compensation ($725,000), a 259% variance.
  • There are more than two differing reward system factors between any employees who work closely together, with or without a reporting relationship. An example of this is the case where one employee receives a base salary, company vehicle, cash incentive, stock options and an annual trip to Hawaii, and the other employee receives a base salary and cash incentive only.
  • Base wage or salary labor market competitive position philosophies vary within the organization according to level or function.
  • Certain employees are paid on a single dimension “incremental” basis while other employees, at any level are paid a base wage or salary only. The most common occurrence of this situation is when an organization pays incentives to sales people based exclusively on transaction amounts (commission) while not paying incentives to other employees for their activities or results.
  • There are exceptionally large (greater than one times base salary) cash value awards provided to certain employees, based on “assumptive” performance and results relationships, while other employees receive no awards under the same system. The most common “assumptive” rewards are stock options and discretionary incentives.

Whenever the above situations exist within an organization, the organization’s financial performance is being negatively affected in significant ways. This is not to say that there cannot be significant differences within an organization as to how much various contributors are rewarded. There should, in fact, be significant differences based on performance and immutable contribution to results. However, if reward systems within a given organization are universal and remarkably similar in structure (not necessarily in amount) that organization will consistently outperform other organizations that are committed to inefficient reward systems and organizational misalignment.

Our concept of stranded, or wasted, compensation is a natural by-product of the above situations. So is limited organizational productivity and performance.

Our Recommendations
The following are some of our recommendations as to what enterprises must do to avoid these dilemmas:

  • Closely evaluate and and improve the means with which external candidates for employment and internal candidates for promotion are selected.  If optimal candidates are selected in all cases, the challenges outlined in this article will be minimized.
  • Ensure that your compensation systems are universally designed to directly impact organizational results with each and every employee. Ensure that the linkage between reward system and results is not “assumptive”.
  • Evaluate your performance management and appraisal system to ensure that it is largely or exclusively objectively focused.
  • Ensure that your performance management and appraisal systems make optimal use of multi-rater feedback.
  • Implement a well designed, preferably simple, variable pay system that ties all employee efforts together (executive through front line).
  • Promote and hire only employees who enthusiastically embrace the concept that pay is related to how they and the company perform, rather than separate from it.
  • Never utilize any incentive that is assumed or designed to be discretionary. Connect all payouts to definitively measured organizational results.
  • Drastically minimize or eliminate rewards based exclusively on individual, versus team or organizational, performance.
  • Ensure that at least 51% of all variable pay payouts within the entire organization are derived from results that current customers and prospective customers have noticed.
  • If yours is a publicly held organization, honestly evaluate your stock based reward systems for “stranded compensation” (see our Performance and Reward Systems web site page for further information). The most effective stock based reward systems, through their design, will differentially drive performance during a bear market even more effectively than during a bull market. Bear markets and bull markets will occur, on a cyclical basis, for as long as public markets exist. The key is to have internal reward systems in place that will actually drive organizational performance well beyond market performance, whether bear or bull.

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2016, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

Proven Leadership Strategies During Challenging Economic Times

-PROVEN LEADERSHIP STRATEGIES DURING CHALLENGING TIMES-

We have been in plenty of doors within almost every business sector and industry and have observed that not many organizational leaders have a strategy or plan for the near term, let alone the long term.
There are many factors as to why, including fear of the unknown, the desire to just leave well enough alone, the thought that the early indications of a financial rebound are simply an aberration are all contributing to the malaise that currently exists in American business.

But as many of us know, the United States has survived and rebounded from 10 recessions between 1948 and 2002 and all indications are that this one will be no different. So what are business leaders to do? What’s the plan?

Although every company is different and not all solutions fit every organization, the following strategies are tried and true and should be part of every organization’s plan moving forward:

1. Ensure that you have a strategic plan for your organization and don’t be afraid of tweaking it as necessary based on updated information or changing market conditions. The idea of developing and following a 1 to 3 year plan without making necessary revisions based on new information or changing trends at best can be likened to operating blind and at worst could be business suicide.

2. Commit to never returning to your past when it comes to headcount and human capital overhead. The days of old which included multiple layers of executives with extremely high base salaries supplemented by exorbitant perks and incentives are a thing of the past, thankfully. Companies are doing much more with much less, which should prove to strategic leadership that the days of entitlement are dead and gone!

3. Ensure that you have the right talent in the right jobs within your organization. Now more than ever, it is extremely important that you have your human capital talent performing duties that are a match to their skills and abilities. One very positive result of the economic downturn has been the identification of those individuals who cannot keep up because they lack the skills, abilities and/or motivation to perform their job duties. If you have not already done so, now is the time to identify those individuals, assess whether they still fit within the organization and take appropriate action.

4. Know what the market is paying and adjust wages accordingly. Although money is not the only reason why your key people stay with your organization, it is a key reason and will play a part in whether they stay with you once the economy is in full swing again. The war for talent is real and you don’t want to be in a losing battle with your competition, because you did not react quickly enough to the changing marketplace.

5. Finally, embrace the role of the strategic leader of your organization. Although you don’t have all of the answers and your crystal ball is no better than other leaders in similar roles, don’t be afraid to seek out assistance from professionals who can provide you with insights and strategies that you may not have considered. The number of organizational leaders who have sought us out for the purpose of executive mentoring is at an all time high for our organization and the feedback that we are receiving from our mentees is that they cannot put a dollar amount on the value they and their organizations have received from this process.

Remember, your team is looking to you to set the course and drive the direction of the organization. Now is a critical time to provide the kind of leadership necessary to see your organization through these difficult times. Ignoring the challenges or hoping they will fix themselves is never the answer. The five recommendations above are a good starting point and don’t be afraid to utilize your leadership team, this is a great opportunity for them to be involved and contribute strategically to the organization and its success.

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2014, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.

Busyness…Its Impact On Your Organization

 

Introduction

Worker productivity is higher than it has ever been as companies have tightened their financial belts over the last 18 to 24 months. Individuals have been, and continue to perform their duties as well as the duties of others, as positions have been eliminated and not replaced. From a financial perspective, the good news is that labor cost as a percentage of the organization’s top-line is generally much lower than it has ever been. The bad news is that we may have provided individuals with an excuse for not being immediately responsive internally and externally and not taking timely action based on busyness.

What Busyness May Be Costing Your Organization.

Busyness takes multiple forms within organizations and can result in internal and external turmoil and frustration, erosion of the organization’s competitive edge and a loss of market share.

One form is an utter failure to be responsive to telephone calls, emails and written correspondence due to busyness. Recently, I contacted an individual whose outgoing voicemail message stated that she would be attending a conference for an entire week and would not be responding to telephone messages or emails until she returned. In an age where everyone is wired to the hilt with cell phones, Blackberry’s and laptop computers, I found it amazing that anyone who was away attending a conference would choose not to be responsive for an entire week. I use the word “choose” because it is truly a choice not to be responsive, when in reality, there would have been ample time and opportunity to be responsive, while enjoying the conference. I proceeded to leave the individual a message on a topic of great urgency to her and received a call back one week after she returned from the conference. When the call was finally returned, the reason given for the delayed response was busyness. We always say that rapid responsiveness is a competitive advantage that costs you and your organization nothing. Those organizations that are rapidly responsive to both their internal and external customers/clients find their rapid responsiveness to be recognized, remembered and appropriately rewarded.

Another form of busyness that is invading organizations is the failure to take timely action, which can cost an organization greatly. An organization that we are familiar with recently identified a need to quickly develop and execute a new commission incentive plan for their sales force. The organization was in jeopardy of losing many of their key sales people because they were being recruited away by a competitor with offerings of higher sales commissions. A very thorough and detailed commission plan was developed based specifically on the organization’s needs and desires, making them extremely competitive. As a result of multiple reviews and committee meetings, which resulted in only very minor plan revisions, eight weeks elapsed between the time the plan was finalized and eventually rolled out. The good news for this particular organization was that the plan was very competitive and well received by participants. The bad news was that the lack of forward motion resulted in multiple weeks of delay in which three top performers departed. Delays can be extremely costly as in the above example and there seems to be a willingness by some leaders to accept these delays. Delays based on a personal preference to have one more review or gather additional information must be eliminated. To be competitive, organizations must adopt an “enough is enough” philosophy and commit to getting things out the door. This philosophy is simple, but will pay immediate and sustained dividends to the organization.

Solutions That Cost You And Your Organization Nothing!

Some of the best solutions often cost the organization nothing and are simple to implement. To rid your organization of the busyness that may actually be holding it back from greatness, try implementing some or all of the following:
1. Require that all telephone calls and emails are replied to within 24 hours of receipt, no matter where the individual may be or what the individual may be doing. In our current electronic age, there is no excuse for not being immediately responsive.
2. Eliminate all unnecessary meetings and require that all necessary meetings start and end on time and have an agenda that was circulated to all participants at least 24 hours prior to the meeting. Cancel meetings that are not necessary and only involve key decision makers who can impact the outcome of the meeting. Do not allow individuals to invite multiple layers of support people to attend the meeting. Instead, require that they have the answers themselves rather than diverting the question to someone on their team.
3. Institute one day each week as a “no meeting day,” enabling your management team to manage by “walking around” and engaging the workforce.
4. Foster decisiveness within your team by instituting an “enough is enough” rule that states that one more test, or one more committee meeting that will not provide new information is not allowed. This will rid your organization of “paralysis analysis” while causing it to be much more competitive in the marketplace.
5. Do not allow busyness to be an excuse for not keeping commitments or getting things done. Deal directly with those individuals or departments that are constantly too busy to get things done.
6. Set the example by “doing what you said you were going to do, when you said you were going to do it!”

Conclusion

The U.S. economy is firmly in a turnaround and all indicators are good for financial growth and increased productivity. Now is the time to make sure that you and your leadership team is firmly committed and ready to take their performance and the performance of their team members to the next level.

Please Contact us or call us at 1-480-467-0344 (USA) and we would be pleased to discuss, clarify or expand on any of the above points.

©2014, Leadership Strategies LLC.  www.peopleresults.com
All rights reserved under U. S. and international law.