Thursday, July 8, 2010

Collaborate Effectively In Decision Making

The Battle of Gettysburg was the largest battle ever fought in the western hemisphere and a critical turning point in the American Civil War. The second day of the battle, July 2, 1863, was one of the bloodiest in American history, with approximately 20,000 combined casualties (killed, wounded, missing, or captured). As evening slowly gave way to night at the end of that terrible day, General George Gordon Meade, commander of the Union Army of the Potomac, called his entire leadership team together at his headquarters for a council of war. Meade knew in his own mind the outcome he desired on the battle's third day, but he also wanted to hear from his commanders and to achieve consensus regarding the Union strategy for the endgame. Meade instinctively understood the critical need, at this dramatic moment in time, to collaborate effectively in decision making.

Meade and his counterpart, the extremely capable Robert E. Lee, commanding general of the Confederate Army of Northern Virginia, were locked in mortal combat. Several weeks earlier Lee had begun an invasion of Northern territory and the two mighty armies had met accidentally, but with unspeakable fury, at the little crossroads borough of Gettysburg in south central Pennsylvania. By the end of the second day, after much desperate fighting, the armies lay in stalemate, watching each other warily across contested ground like two wounded but still very dangerous animals.

General Meade had established his headquarters in a tiny white farmhouse owned by the widow Lydia Leister. Earlier on July 2 he had wired his superiors in Washington D.C. to let them know it was his intention to "remain in my present position tomorrow…" Nevertheless, that night he gathered his top generals (eleven in all) to listen to their assessment of the situation. They assembled in a room no larger than twelve by twelve feet, illuminated by a single candle, and which was soon filled with a thick cloud of cigar smoke.

The discussion began informally, and turned to the issues of the dire condition of the army and the lack of supplies. Meade was quiet, offering only an occasional comment, and intent on hearing what his team had to say before offering his own judgment. Finally, with Meade's concurrence, his chief of staff proposed that the group vote on three critical questions: 1. Should the army remain in its present position? 2. If the army remains, should it attack or await the enemy's attack? 3. If the decision is to await attack, how long should it wait? After much give and take, the generals voted unanimously to stay in their present position, await attack, and to wait for not much longer than a day.

One of the participants, General John Gibbon, wrote afterward, "I recollect there was great good feeling amongst the Corp Commanders at their agreeing so unanimously, and Gen. Meade announced, in a decided manner, 'Such then is the decision.'" The generals left the meeting clear in the understanding of their mission and united in their common purpose to defeat the enemy the next day, which they succeeded in doing. This stroke of genius-- attaining clarity and consensus during a critical phase of the fight-- on the part of George Meade may have (more than anything else he did over the three days) won the Battle of Gettysburg for the North.

What can modern-day business leaders learn from the historical example of Meade's collaborative decision making? First, Meade recognized the criticality of pulling his team together for a face-to-face consultation. Sometimes, there is simply no substitute for a meeting in person, and skilled leaders understand precisely when there is a need to bring everyone into the same room. Ironically, Meade's adversary General Lee did not gather his commanding generals together for a war council at any point during the battle, and a serious lack of coordination resulted.

Next, Meade initiated a process that was perceived by all of the participants as fair. While it is true that Meade had already indicated to higher command his preference for remaining in place, he did not disclose his point of view to those reporting to him. Instead, he remained quiet and listened respectfully with genuine interest to what the others had to say. Each person had a chance to weigh in to the discussion and to vote on a particular outcome. When the members of a team feel that they have been given ample opportunity to express their points of view and to influence their leader, even if they disagree with the final decision, they are much more inclined to buy into the ultimate direction.

Finally, Meade's council of war provided absolute clarity to every individual involved as to what was expected of him for the next day. The fact that the decisions made were unanimous helped in achieving this effect but, even if there had been disagreement, the rationale for the chosen decision was clear and unambiguous.

On the morning of July 3, after the famous meeting but before the decisive combat that would bring victory to his forces, Meade penned a hurried letter to his wife: "Dearest love, All well and going on well with the Army. We had a great fight yesterday, the enemy attacking and we completely repulsing them-- both armies shattered…. Army in fine spirits and every one determined to do or die." This determination to defeat the Confederate enemy at all costs was in large part achieved as a result of George Meade's intuitive comprehension of the importance of effective collaboration when making a critical decision.

Friday, June 25, 2010

Take Time To Concentrate

Way back in the old days (early 1990s), when I worked for Target, I used to exercise over the noon hour at the Northwest Arena Club in downtown Minneapolis. I remember watching with great comic amusement as a stressed out attorney that I knew would run countless laps around the indoor track while dictating into a hand-held recording device. I imagined his executive assistant struggling to transcribe his breathless memos. He was truly the Neanderthal version of today's "multitasker."

A recent New York Times front page story is entitled, "Hooked on Gadgets, and Paying a Mental Price: Constant Use Takes a Toll on Concentration and Family Life." The article highlights the challenges faced by Kord Campbell, founder of an Internet start-up company. Campbell is so addicted to e-mail and the Internet that, "Even after he unplugs, he craves the stimulation he gets from his electronic gadgets. He forgets things like dinner plans, and he has trouble focusing on his family. His wife, Brenda, complains, 'It seems like he can no longer be fully in the moment.'"

Kord Campbell's saga- cautionary tale though it is- sounds familiar to most of us. Perhaps uncomfortably familiar. How much time do you spend sifting through and responding to e-mail on a daily basis? How much time surfing the web? How much do you love video games? Are you at a loss without your laptop, iPhone, or Blackberry? When was the last time you spent several hours, uninterrupted, working on a critical issue or problem?

In this age of astounding technical wizardry, smart business people still recognize that excessive devotion to our electronic lifelines can be a distraction and siphon time from more important matters. Though our ability to communicate has been vastly enhanced in recent times, our ability to focus has not. Awareness of this conundrum is key to enabling us to step back and carry out a very important leadership responsibility: taking time to concentrate.

Entrepreneur magazine published a piece in March 2010 called, "E-mail Is Making You Stupid." Business reporter Joe Robinson tells us that the average office worker checks e-mail 50 times and sends 77 instant messages daily. The typical employee loses more than two hours per day in productivity as a result of electronic interruptions. Computer chip maker Intel generated an estimate of how much money large companies lose annually from distractions caused by excessive e-mails: $2 billion. And the situation is not getting better. The E-Policy Institute warns that e-mail volume is growing by a rate of 66% per year. This electronic deluge not only costs companies dearly in productivity, it creates incredible stress, decreases job satisfaction, and diminishes creativity.

In his book, The Shallows: What the Internet Is Doing to Our Brains, technology author Nicholas Carr argues that the very way we think and experience the world has been dramatically altered by the Internet. Studies demonstrate that extended use of the Internet quickly and significantly alters the brain's neural pathways, creating a tendency to skim rather than read closely, become easily distracted, and learn only superficially. Research also demonstrates that people who read linear text- as in a book- comprehend and remember more than those who read text with numerous links- as on the Internet. Carr says, "Once I was a scuba diver in a sea of words. Now I zip along the surface like a guy on a Jet Ski."

Some people claim to be able to manage myriad electronic inputs and remain highly productive because they are "multitaskers." Unfortunately, their imagined ability is a myth. Joe Robinson says, "The cult of multitasking would have us believe that compulsive message checking is the behavior of an always-on, hyper-productive worker. But it's not. It's the sign of a distracted employee who misguidedly believes he can do multiple tasks at one time. Science disagrees. People may be able to chew gum and walk at the same time, but they can't do two or more thinking tasks simultaneously."

Critics point to studies that suggest that some cognitive tasks, like visual perception and sustained attention, actually improve as a result of using screen-based technologies. Many scientists, however, suggest that more brain activity is not necessarily better brain activity. Developmental psychologist Patricia Greenfield asserts, "every medium develops some cognitive skills at the expense of others." She acknowledges that use of the Web has led to the "widespread development of visual-spatial skills," but simultaneously we have lost "deep processing" capabilities that are foundational to "mindful knowledge acquisition, inductive analysis, critical thinking, imagination, and reflection."

Some companies understand the new reality and are fighting back. Intel has implemented "Quiet Time" at two of its locations. During designated Quiet Time, no one is allowed to engage in messaging or phone contact. Employees are expected to concentrate and work quietly on their own. Companies such as Deloitte & Touche and U.S. Cellular have mandated restricted e-mail use and encouraged face-to-face meetings. They have also tried such ideas as "no e-mail Friday."

What can individuals do to carve out time to concentrate and get work done?

• Check e-mail only a few times daily, rather than continuously; let people know that you will check messages at 8 a.m., noon, and 4 p.m.
• Whenever possible, meet face-to-face or talk by phone as the preferred mode of communication.
• Prioritize your tasks for the day, and set aside time to focus quietly on those issues; don't simply respond to whatever is in front of you.
• Don't send an e-mail unless absolutely necessary, and resist the temptation to copy people that have no "need to know."
• Work offsite from time to time if your employer and work situation allows it.

Recognition of the potential adverse effects of the electronic bombardment that we all weather on a daily basis is the first step in dealing with the problem. Consciously and consistently creating time to focus and concentrate is the solution.

Saturday, June 12, 2010

Use the Right Data

Some of the most serious and prevalent problems that plague modern business result from using the wrong data to make decisions, measure outcomes, and incent performance. Recently, business journalist Geoff Colvin wrote, "In business as in life, be careful what you wish for. I know a company that wished for a better return on equity. What could be wrong with that? It paid its executives according to that measure, and man, did they deliver. In some years the firm had the best ROE in the industry. It was winning big time. The firm was Lehman Brothers, now dead because managing for ROE caused executives to overborrow…. Wishing for the wrong thing- managing for the wrong ratio- killed the company."

The cautionary tale of Lehman Brothers is just one among many to come out of the Great Recession. These days, smart business leaders are meticulously careful to use the right data.

We are obsessed by numbers and have become increasingly good at measuring all manner of things. The July-August 2009 issue of Harvard Business Review states, "Data, computing power, and mathematical models have been transforming many realms of management from art to science. But the crisis exposed the limitations of certain tools. In particular, the world saw the folly of reliance by banks, insurance companies, and others on financial models that assumed economic rationality, linearity, equilibrium, and bell-curve distribution. As the recession unfolded, it became clear that the models had failed badly."

The measurement tools and models are not themselves necessarily flawed. Business leaders simply need to become more adept at comprehending and using the data they generate. HBR argues, "…. decision makers in every industry must take responsibility for looking inside the black boxes that advanced quantitative tools often represent and understanding their functioning, assumptions, and limitations."

Consider the incredibly controversial issue of executive and, specifically, CEO compensation. Duke University business professor Dan Ariely points out that numerous studies demonstrate that people will behave based upon whatever measures we use to evaluate them. It seems too simple to contemplate but, says Ariely, "Human beings adjust behavior based on the metrics they're held up against. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you get. Period."

Chief executives are overwhelmingly evaluated based on a single data point: the value of their company's stock. Even measuring CEOs against several years worth of stock returns does not necessarily incent them to consider the long-term health of the enterprise they lead: they are still obsessed by stock price. It is not surprising, therefore, that because they are compensated based on that one measure, most CEOs spend an inordinate amount of time considering and working towards an improved stock price.

Professor Ariely says, "To change CEOs' behavior, we need to change the numbers we measure. Stock value metrics that focus on the long term are a start, but even more important are new numbers that direct leaders' attention to the real drivers of sustainable success. What are those numbers? …. How many new jobs have been created at your firm? How strong is your pipeline of new patents? How satisfied are your customers? Your employees? What's the level of trust in your company and brand? How much carbon dioxide do you emit?"

Geoff Colvin asserts that businesses should evaluate performance using a new metric, called "EVA momentum." Economic value added, or EVA (a measure used by some companies) is essentially profit after charges for all the factors of production, and an improvement in EVA presumably results in increased value. Yet some business thinkers believe EVA can still be manipulated. EVA momentum is defined as the change in EVA divided by the prior period's sales and, the argument goes, simply cannot be tinkered with. Consultant Bennett Stewart says, "It's the only performance metric where more is always better than less. It always increases when managers do things that make economic sense."

Even at the level of macroeconomics and public policy we see much current discussion about the data that informs decision making. Nobel prize-winning economists Joseph Stiglitz and Amartya Sen produced a recent study that blames disproportionate focus on growth in the form of gross domestic product- the quantity of goods and services produced in the economy- for contributing to the world-wide recession. An unhealthy fixation on G.D.P. causes governments to overlook such problems as joblessness and environmental degradation, which are also important quantifiers of the overall health of the economy. Stiglitz says, "If you don't measure the right thing, you don't do the right thing," and he advocates for more attention on such benchmarks as income and consumption, availability of health care, and quality of education.

Temple University mathematics professor John Allen Paulos wrote an article recently in the New York Times Magazine called: "Metric Mania: Do we expect too much from our data?" Dr. Paulos says, "In the realm of public policy, we live in an age of numbers…. The problem isn't with statistical tests themselves but with what we do before and after we run them." He argues that measures in such areas as school performance and health care can be second-guessed, but that, "This doesn't mean we shouldn't be counting…. it does mean we should do so with as much care and wisdom as we can muster."

Albert Einstein supposedly said, "Not everything that can be counted counts, and not everything that counts can be counted." What measures do you use in your business to make decisions, assess performance, and reward behaviors? Are you careful and wise in your use of data, or do you rely on certain metrics just because you've "always done it that way"? The answers to these critical questions are essential to the future success of your business.

Saturday, May 29, 2010

Celebrate Entrepreneurship

I had the opportunity to work at the Best Buy Company from 2001 to 2009. Although the company was formed in 1966- almost 45 years ago- I was always surprised and impressed to see the founder, Richard Schulze, as a frequent presence at corporate headquarters. While Dick Schulze long ago turned over day-to-day operational responsibility and decision making to others, his innovative spirit, willingness to take risks, and drive for results are still very much a part of the corporate culture. Even though Best Buy is now one of the largest business enterprises in America with almost $50 billion in revenues and 150,000 employees, it is still a company that celebrates entrepreneurship.

It is absolutely fascinating to contemplate that every business in the world, including behemoths like General Electric (Thomas Edison), Wal-Mart (Sam Walton), Toyota Motor (Kiichiro Toyoda), and Mary Kay Inc. (Mary Kay Ash) started as nothing more than an idea in someone's head. That person either had a new and better idea, or got sick of working for someone else, or both. And he or she also invariably had a high tolerance for uncertainty and an intense determination to succeed.

It is this powerful spirit of entrepreneurship without which we could not survive and the world economy would crumble. While clearly not everyone is cut out to be an entrepreneur, we all desperately need and depend on these founding visionaries- whatever the size of the enterprise they invent- to continue to innovate, to strive, and to build.

There is a strong difference of opinion as to whether entrepreneurship can be taught. Are entrepreneurs born, or can they be made? If the increase in formal entrepreneurial education over the last thirty-plus years is any indication, many business schools believe the skills can be learned. Today, better than 2000 American colleges and universities offer classes in entrepreneurship, compared to a paltry 200 back in the 1970s.

Gregg Fairbrothers is the founding director of the Dartmouth Entrepreneurial Network, and he teaches a hugely successful course in entrepreneurship at the Tuck School of Business. In Fairbrother's class the students learn through experience; the vast majority of the work takes place outside the classroom. Students develop and present their own ideas for a startup, and then are tasked with refining their approach, testing in the marketplace, and pitching to potential investors to secure financing. Clearly, Fairbrothers believes that learning by doing in the hard school of the marketplace is the only way to teach entrepreneurship.

Fairbrothers also acknowledges that entrepreneurship is a difficult concept to define and measure with any precision. He suggests that entrepreneurs are characterized more by a set of identifiable traits than by what they do, and that the range of entrepreneurial behaviors can be plotted along a classic bell curve. In a recent Fortune Magazine article Fairbrothers says, "So the question is, can you take a point on that curve and move it? If 'entrepreneurial' is to the right, can you move it that way? I know I can move it that way. I've done it."

Entrepreneurship, therefore, is not a single trait that some individuals and organizations possess and others do not. It is not an all-or-nothing proposition, but rather a spectrum of behaviors that includes innovative approaches, calculated risks, and willingness to fail and try again.

Starbucks CEO Howard Schultz recently held a series of brainstorming meetings with a group of his employees. Schultz was the entrepreneurial visionary behind the massive growth of the Starbucks brand. He left the company for a time only to return in 2008 as Starbucks struggled to maintain its impressive growth. The employee focus group helped in the effort to return to entrepreneurial roots. Schultz says in a recent New York Times interview, "We lost our way… [so] we went back to start-up mode, hand-to-hand combat every day. And with the kind of discussion and focus that probably we had not had as a company since the early days- the fear of failure, the hunger to win."

Among other things, Starbucks now works to give its stores a local feel that reflects neighborhood history and architecture, and even displays the work of local artists. The company places greater emphasis on satisfying regional differences among coffee drinkers; Sun Belt customers prefer cold drinks and those in the Pacific Northwest drink more espresso, for example. Starbucks coffee buyers no longer focus exclusively on purchasing only beans produced in sufficient quantity to supply all stores; they now also buy local blends made in small batches.

While the jury is still out, as of early 2010, Starbucks had seen healthy increases in revenues, same-store sales, and its stock price. Leadership guru Warren Bennis says of entrepreneurs like Schulz that they, "keep shaking things up and pulling the stakes out of the tent because they like the mud and the chaos of reinventing, and Howard has a bit of that in him."

Do you as a leader display entrepreneurial behaviors? Do you like to shake things up, try new ideas, and take the occasional calculated risk? How about the organization you work for? Where does it sit on the "Entrepreneurial Bell Curve?" Do you celebrate entrepreneurship or have you become bureaucratic and stagnant? No matter the age or size of your enterprise (think Best Buy Corporation), a conscious effort to cultivate and maintain entrepreneurial roots can provide a healthy boost in performance.

Friday, May 14, 2010

Simplify and Prioritize

I know an executive who has a forty-page list of personal action items. Not forty items, total, on his to-do list. Forty pages, single-spaced, in a bound notebook. I have had professional dealings with this leader and I can tell you from personal experience that while he is a terribly busy man with a lot to do, he gets absolutely nothing done. He does not follow up on the most basic tasks, like returning phone calls or responding to e-mails. He cannot be counted on to deliver an outcome on anything. He tries to do everything, yet he accomplishes nothing. He is in a position of real power and his organization suffers greatly for his complete lack of focus. He has failed to adhere to that most fundamental yet important leadership principle: simplify and prioritize.

Simplifying and prioritizing starts with each of us as individual leaders. If we don't know what we are trying to accomplish in our own jobs, then there is no chance that the teams we lead will be any better focused.

In a recent interview the CEO of Continental Airlines, Lawrence Kellner, was asked how he manages his time. He replied, "I used to have a long, long to-do list. At the end of the day, I'd see which ones got done. Then five more notes might be on my desk, and I'd throw them on the list. I realized I was often doing what came to me as opposed to what was really important. So I started saying, 'O.K., what are the three most important things I need to do today?' And if No. 1 is a 12-hour task, then I'll spend the day working on it. I need to decide what's the most value-added thing I can do." In short, Kellner succeeded in taking charge of his professional life by proactively prioritizing his efforts, rather than simply reacting to whatever was in front of him. How well do you practice this skill as a leader?

Once we have our own priorities in order, the next task involves making sure our organizations and teams know what their priorities need to be. Again, Kellner is a model of good leadership in this regard. He says, "When I became CEO, I started ending each of my three most important meetings each month by saying, 'O.K., here are the three most important things we're doing. Here are the three priorities." His followers at Continental were no doubt grateful to him for explaining in clear and concrete terms exactly what he expected of them.

Great leaders instinctively understand that their teams are looking to them to identify just a small handful of key objectives, three or four at the most, and to communicate those objectives effectively. William Green is the chairman and chief executive of Accenture, the global consulting, technology services and outsourcing company. Green relates a story about how he was able to simplify things for a group of brand new employees: "I once sat through a three-day training session for new managers. I counted 68 things we told them they needed to do to be successful. And I got up to close the session, and I said there are three things that matter. The first is competence… The second one is confidence… The third thing is caring…" From 68 things to three. Again, this group of Accenture managers surely appreciated their chief's willingness to help them prioritize in their jobs, and in their leadership journey.

Cristobal Conde is the president and CEO of SunGuard, a software and IT services company, and he was notorious early in his career for micromanaging and making every decision himself. He soon realized the futility of this approach. He recalls, "That was in the early 90s, and that experience convinced me that the right way to do it is the opposite, which is to hold people accountable, to really restrict the number of things you say to them, and to decide the one or two things that are most important. You have to do that consistently over a year before you start having an impact." Indeed, it takes time to hammer a message home, but if it is simple and consistent, people will eventually respond and deliver.

Alan Mulally has been the president and chief executive of Ford Motor since 2006, and has led that company to extraordinary levels of achievement and value creation in an incredibly challenging time for the auto industry. Mulally is another leader who stays focused on a few key objectives. He says, "I've moved to a place where I'm really focused on four things. I pay attention to everything, but there are some things that are very unique to what I need to do as a leader. One of them is this process of connecting what we're doing to the outside world… A second focus for me is: What business are we in? What are we going to focus on? The third one is balancing the near term with the longer term… And then I really focus on values and standards… I'm the one who needs to focus on those four things, because if I do that, the entire team will have an understanding of them."

Albert Einstein once said, "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius- and a lot of courage- to move in the opposite direction." The best leaders have an uncanny ability to simplify what is complex. They know what is truly important and what is not. They can identify the most critical challenges before them and prioritize those challenges so as to maximize their precious time. And they communicate these simple priorities to their team, again and again, in a way that helps people know how to direct their own efforts and to achieve results. Great leaders are incredibly adept at simplifying and prioritizing.

Friday, April 9, 2010

Communicate, Communicate, Communicate

Drew Gilpin Faust is a noted American historian who specializes in the history of the South and, in particular, the changing roles of women during the period before and during the Civil War. She taught for many years at the University of Pennsylvania and is the award-winning author of several books. In 2001 she became the head of the Radcliffe Institute for Advanced Study and, in 2007, she was named the first female president of Harvard University.

In a recent interview in the New York Times, Gilpin Faust describes the leadership lessons she learned in transitioning from her role as a scholar to that of an administrator with responsibility for a team of people and a large, complex organization. She says, "They have to do with understanding the context in which you are leading. Universities have enormously distributed authority and many different sorts of constituencies, all of whom have a stake in that institution… I spend a huge amount of time reaching out to people, either literally or digitally, and with alumni networks all over the world, so that I can connect. Leadership by walking around- that's a digital space now, it's virtual space."

Good communication is the key to effective performance, innovation, and change in any organization. And the message must be hammered home repeatedly. Gilpin Faust says, "When I came to the Radcliffe Institute for Advanced Study, many people wanted to help. An alum who was an expert in turnarounds said, 'One lesson about change in any organization- communicate, communicate, communicate.'"

Susan Docherty, who heads up the United States sales, service, and marketing team at General Motors, echoes Gilpin Faust's point of view concerning uniformity and persistence in communication. Docherty says in a recent interview, "Whether you have a really small team or a really big team, communication needs to be at the forefront. It needs to be simple. It needs to be consistent. And even when you're tired of what the message is, you need to do it again and again and again, because everybody comes to the table with a different perspective and a different experience. The same words mean different things to different people."

The global consulting firm Watson Wyatt reports in a survey just released for 2009-10 that companies that communicate effectively provided a 47% higher return to their shareholders over the five-year period from 2004 to 2009. The report states, "In challenging times, companies are forced to make tough decisions and deliver difficult messages. But our study found that high-performing companies don't shy away from tough messages. They make communication a priority and use every tool available to reach out to a workforce in desperate need of information and direction."

Specifically, the Watson Wyatt study reveals that the companies that communicate best are very courageous in their employee communication. Watson Wyatt refers to this skill as "telling it like it is." Instead of shying away from difficult messages in an attempt to protect their people, these companies train and encourage their managers to focus on constant, effective communication, especially during times of uncertainty. "Highly effective communicators," says Watson Wyatt, "say more, not less." The study shows that when people are told what they need to know, even if the news is bad, their performance actually improves.

The best companies also promote innovation through their communication plans by encouraging employees to think creatively about work processes, job tasks, and productivity measures. Even the communication plans themselves reflect an innovative spirit. They use multiple channels such as intranet updates, wiki, blogs, and e-mail, as well as face-to-face dialogue where possible. The report asserts, "… taking the initiative to try new tools to reach a culturally diverse and geographically dispersed audience is the hallmark of effective communication." This is the essence of "leadership by walking around in a virtual space" that Drew Gilpin Faust describes.

The highest performing companies are disciplined in their approach to communication. They set direction and measure results to ensure that employees not only know what they are supposed to be doing, but why. They make sure that employees are given good direction, but also helpful context. The result is a more engaged team. Outcomes, both good and bad, are measured closely and shared with the team.

Finally, the Watson Wyatt report emphasizes that a critical component of any solid communication plan involves listening to employees. Good communication ensures alignment, but if companies are not confirming understanding and listening to feedback, then alignment can be compromised.

Clearly, those organizations- whether they are a major university or a small business- that develop simple, consistent messages and repeat them constantly through multiple channels perform best over time. Gilpin Faust sums up the point well when she talks about her most critical lesson in communication: "Someone would say, 'Well, you've never talked about X,' and I'd say, 'I've talked about it here, here, and here. I talk about that all the time. Then I realize that all the time isn't enough. You have to do 'all the time and more.'"

In other words, communicate, communicate, communicate.

Friday, March 26, 2010

Succeed In Learning From Failure

In the early 1920s a young artist and animator who lived in Kansas City set out to form his own company, which would specialize in producing cartoons. He hired his first employee and secured a deal with a local theater owner to air the cartoons, which were called "Newman Laugh-O-Grams." The cartoons became popular in the local area, and soon the budding entrepreneur signed a stable of animators to help his studio, also called Laugh-O-Gram, to increase production. Unfortunately, the tiny enterprise became top-heavy with salaries and began to lose money. The fledgling tycoon had to shut down the business and declare bankruptcy. This man went on to become one of the most successful and revered business leaders in American history, but he never forgot the pain of his initial setback, or what he learned. In later years, as he looked back on the experience, he said, "It is important to have one good hard failure when you are young." His name was Walt Disney.

When I was a young man in my early thirties, I quit the practice of law to go into business for myself. I formed an S Corporation, opened a fast-food franchise, and had to rapidly educate myself as to the ins-and-outs of Small Business 101. It was an incredible learning experience for me and, long hours aside, I loved the freedom of being my own boss. But despite my best efforts, I could not generate sufficient revenue to cover my costs. I stayed in business for about six months and then, reluctantly, was forced to close up shop. I had a wife and small child who were dependent on me. I had lost all our savings and was bankrupt. I was unemployed for seven months. There was no sugarcoating it: I had failed miserably, in a way that had never happened to me before. Nevertheless, this incredibly difficult passage from almost twenty years ago shaped who I am in ways that still resonate to this day. In its way, it was a much more significant and life-changing event for me than any of my triumphs have ever been. Painful though it was, like Walt Disney, I succeeded in learning from failure.

University of Virginia psychology professor Jonathan Haidt writes in his book The Happiness Hypothesis, "People need adversity, setbacks and perhaps even trauma to reach the highest levels of strength and fulfillment. Suffering is not always all bad for all people. There is usually some good mixed in with the bad, and those who find it have found something precious: a key to moral and spiritual development." In his book The Pursuit of Perfect, Harvard professor Tal Ben-Shahar argues that individuals who risk failure actually tend to be happier than those who are averse to challenge and change. Ben-Shahar says, "Successful people are necessarily people who have failed many times, and therefore are 'better' at failing than others. When we practice failure, we realize the pain associated with fear of failure is often greater than the pain associated with actual failures."

The roster of well-known people who have achieved at a high level in their lives but who have also learned from failure along the way is endless. Former President Bill Clinton says, "When I was defeated for reelection as governor in 1980, there didn't seem to be much future for me in politics. I was probably the youngest ex-governor in American history. But if I hadn't been defeated, I probably never would have become president. It was a near-death experience, but it forced me to be more sensitive and to understand that if people think you've stopped listening, you're sunk." Author J.K. Rowling, who penned the mega-best-selling Harry Potter series of books, was at one time alone, unemployed, and "as poor as it is possible to be in modern Britain without being homeless." But for Rowling, "Failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began directing all of my energy into finishing the only work that mattered to me."

Indeed, these days, many companies actually look to actively recruit workers who have experienced and overcome adversity in their personal or professional life. Meridee Moore is the founder of Watershed Asset Management, a $2 billion hedge fund in San Francisco. When asked in a recent interview about how she hires, Moore responded, "… if the person has had a rough patch in the past, that's usually good… if you've ever had a setback and come back from it, I think it helps you make better decisions. There's nothing better for sharpening your ability to predict outcomes than living through some period where things went wrong. You've learned that no matter how smart you are and how hard you work, you have to anticipate things that can go against you."

The Great Recession has been a huge challenge for all of us. Many of us have experienced defeats and even real suffering, both in our jobs and on the home front. But there can be redemption. The phoenix can rise again from the ashes. For me, out of my spectacular failure, I learned many things. I learned to take new challenges seriously, and never to assume that skills and abilities that have pulled me through in the past will necessarily pull me through the next time. I learned to worry only about those things that I can control, and the main thing I control on a daily basis is my attitude. I get to choose how I want to be. I learned to appreciate my many blessings, especially family and friends. And I learned a whole lot about humility.

Professor Ben-Shahar of Harvard summarizes the idea well, "The ones who will emerge stronger from [adversity]- the resilient ones- are those who learn to find the opportunity in every setback." In short, they are the people who succeed in learning from failure.

Friday, February 12, 2010

Empower and Engage Women

There is a Chinese proverb that says, "Women hold up half the sky." The great American novelist and humorist Mark Twain once asked rhetorically, "What would men be without women?" His answer: "Scarce, sir, mighty scarce."

Women have made huge strides in recent decades in the long and challenging quest for equality. In the United States, we see many more women in positions of power in government and business. Hillary Rodham Clinton narrowly missed in her recent bid for the presidency. Yet we still fall woefully short of the mark.

Today, smart businesses work incredibly hard to develop and retain their female employees and to listen and market to their female customers. The leaders who run these businesses know that the best and highest functioning of both our national and world economies will never come to pass until the day when women become fully empowered and engaged.

It is difficult to imagine that less than one hundred years ago women were not even allowed to vote in the United States. Since then, we have undeniably made enormous progress. Yet while women make up more than half of our labor force, as of mid-2009 only fifteen Fortune 500 companies (3 percent) had female CEOs. In Minnesota, only six of the state's top 100 public companies have female CEOs, and women hold only 15 percent of the executive officer positions in those 100 leading companies. The situation is far worse in other parts of the world.

In their powerful and heart-rending book Half the Sky: Turning Oppression Into Opportunity For Women Worldwide, the Pulitzer Prize winning husband and wife team of Nicholas Kristof and Sheryl WuDunn describe what they characterize as the greatest human rights violation of our time: the oppression of women and girls in the developing world. The authors tell stories about three particularly horrific abuses: sex trafficking and forced prostitution; gender-based violence, such as honor killings and mass rape; and maternal mortality, which claims one woman per minute in the developing world.

Their message, however, is not one of despair but of hope. They write, "Many of the stories in this book are wrenching, but keep in mind this central truth: Women aren't the problem but the solution. The plight of girls is no more tragedy than an opportunity."

Kristof and WuDunn suggest that the answer to the problem lies in educating women and fully incorporating them into the economic life of their communities and countries. They describe the dramatic results in East Asia of what they call the "girl effect," saying, "Women are indeed a linchpin of the region's development strategy… These countries took young women who previously had contributed negligibly to gross national product and injected them into the economy, hugely increasing the labor force. The basic formula was to ease repression, educate girls as well as boys, give the girls the freedom to move to cities and take factory jobs, and then benefit from a demographic dividend as they delayed marriage and reduced childbearing. The women meanwhile… saved enough of their pay to boost national savings rates… Evidence has mounted that helping women can be a successful poverty-fighting strategy anywhere in the world, not just in the booming economies of East Asia."

Indeed, the data is insurmountable that fully including women in the workplace- especially in positions of leadership- results in superior economic outcomes. One study found that the one quarter of American Fortune 500 companies with the most female executives had a 35 percent better return on equity than the one quarter of companies with the fewest. Studies show that female executives generally tend to avoid unnecessary risk and focus patiently on the long term, while also bringing a more collaborative, conciliatory, and motivational leadership style, which is well-suited to today's less hierarchical workplace. Women will play an increasingly important future role, because in an era when new jobs will demand better educated workers, women now receive the majority of college and advanced degrees.

Women are a force to be reckoned with as customers as well. Companies that sell products as varied as consumer electronics, health care, and cars overlook women at their peril, because the woman of the house controls an astounding 83 percent of all consumer purchases.

Insightful and forward-looking companies focus on their female customers and also create positive work environments for their female workers, many of whom are striving mightily to balance professional and family obligations. These companies emphasize business outcomes rather than long hours in the office. At the Best Buy Company, a program called ROWE (results-only work environment) improved productivity in some departments by as much as 40 percent. In 2009, NetApp improved market share, avoided layoffs, and accumulated $2 billion in cash reserves, while still offering employees paid time off for volunteer work, adoption aid, and autism coverage. Biotech company Genentech saw revenues jump by 25 percent early last year, while featuring on-site daycare, a fitness center, and paid sabbaticals. Examples such as these are legion, and the economic case is undeniable.

Where does your organization, company, or team sit with respect to women? Do women possess a truly participatory voice, or are they underrepresented and marginalized? Are there women in leadership roles in your organization? Do you recognize the power of women as consumers of your products or services? Do you thoughtfully cultivate them as customers? If you answer no to these questions, then perhaps now is the time to do your part to make changes in your organization that will help bring us to the day when the feminine half of all who must together hold up the sky will be fully empowered and engaged.

Friday, January 29, 2010

Go With Your Gut- But Not Always

At first they believed the fire would be easy to control. In August 1949, fifteen smokejumpers parachuted into a forest fire in a remote place called Mann Gulch, Montana. The situation appeared routine enough that the team's leader, Wagner (Wag) Dodge, paused to eat his dinner before mobilizing to fight the blaze. But circumstances quickly took a perilous turn. The fire gained in size and fury, and Wag Dodge suddenly realized that he and his men were in grave danger. He instructed the men to drop their tools in an attempt to outrun the fire. But it spread too rapidly, and in a brilliant flash of intuition, Dodge set a small fire in front of the raging inferno and called to his team to lay down with him in the ashes. The confused and terrified men failed to follow Dodge's lead and instead sprinted frantically to try to stay ahead of the conflagration. Thirteen of them died. Dodge's escape fire, however, deprived the main blaze of fuel, and it leapt over him. He survived unhurt.

In one dramatic instant at Mann Gulch, Wag Dodge demonstrated both the extreme potential benefit and the occasional adverse downside of using intuition in decision making. Dodge proved that as a leader, sometimes it is important to go with your gut- but not always.

In his bestselling book Blink: The Power of Thinking Without Thinking, author Malcolm Gladwell analyzes this powerful phenomenon of intuitive decision making, of gut-level choices made in a "blink." Gladwell explains that it is the part of our brain known as the adaptive unconscious that enables us to leap to frequently correct conclusions by quickly and efficiently processing huge amounts of data. Indeed, our very survival as human beings depends on our ability to engage in this process of rapid cognition.

Despite our general bias towards thoroughness in decision making- we usually assume that the quality of a decision is in direct proportion to the time and effort that went into making it- Gladwell says, "… decisions made very quickly can be every bit as good as decisions made cautiously and deliberately."

The key to making consistently good intuitive decisions is training and experience. In the case of Wag Dodge, he had spent many more years as a smokejumper than most of the men he led at Mann Gulch. He soon understood the fire was not routine based on pattern recognition from previous fires. His expertise told him that the team could not outrun the fire while carrying their tools and, soon, that they could not outrun the fire at all. While he had never seen an escape fire used before, again, something in his long experience told him that such a technique just might work. He was right. Gladwell says, "This is the gift of training and expertise- the ability to extract an enormous amount of meaningful information from the very thinnest slice of experience."

But it would be foolish for a leader to rely on intuition under every circumstance, for two reasons. First, our instincts can sometimes be disrupted and lead us astray. In other words, sometimes we are wrong. Second, if we rely on gut decisions but fail to communicate our reasoning to our teams and to bring them along- as the Mann Gulch scenario so tragically demonstrates- we will fail in our objectives.

Gladwell writes, "Taking our powers of rapid cognition seriously means we have to acknowledge the subtle influences that can alter or undermine or bias the products of our unconscious." For example, how often do you make a really good decision when you are in an emotional state of mind, frightened, angry or upset? What about decisions made when you are incredibly rushed for time? Self-awareness and open acknowledgement that conditions may not be ideal for a gut-level decision can go a long way toward guiding us to a more deliberative process and a potentially better outcome.

And if our team does not understand what we are doing or why, then we have failed a critical test of leadership as well. For Wag Dodge, a number of important factors worked against him in his effort to make an intuitive decision to save his team. Dodge was generally described as an extremely poor communicator, a "man of few words." The team therefore did not know him well to begin with. His team read his actions in taking time to eat his dinner as an indication that all was well. When Dodge quickly discerned that he was wrong in his initial assessment of the fire, he then became pressed for time to convey his urgency to the team. When he called to the men to join him in the escape fire, because they did not know or fully trust him, they could not make sense of his behavior. Disaster resulted.

In the end, we as leaders need to determine when to rely on our intuitive instincts and when to be more thorough in our approach. No two situations are exactly alike and there is no magic formula. Malcolm Gladwell argues that judgment and understanding are critical. He writes, "Judgment matters; it is what separates winners from losers," and, "The key to good decision making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking in the latter." In using our judgment and understanding, regardless of our decision making process, we need to communicate effectively to bring our teams with us. So the next time you face a critical decision, just remember: sometimes it is important to go with your gut- but not always.

Saturday, January 16, 2010

Show Humility

George Catlett Marshall was the U.S. Army Chief of Staff during the Second World War. In that capacity, he managed the astronomical growth of America's armed forces from a tiny pre-war entity to the thirteen-million-person juggernaut that defeated Nazi Germany and Imperial Japan. After the war, Marshall became secretary of state and oversaw implementation of his namesake Marshall Plan, which succeeded in rebuilding war-ravaged Europe. He went on to serve as secretary of defense and, later, as head of the American Red Cross. Despite these profound achievements during a lifetime of service, Marshall is perhaps one of the least-well-known leaders in our history.

Marshall's relative lack of name recognition today represents the natural outcome of his supreme selflessness coupled with his fierce and unwavering commitment to always putting the needs of the country first. George Marshall embodied a critical leadership trait that, unfortunately, we seldom see in sufficient measure: he showed humility.

When the Allied high command decided in 1944 to invade Europe via the Normandy beaches of France, President Franklin Roosevelt confronted a difficult choice as to who should lead such an important and complex operation. By all accounts, Marshall had earned the right to head up the effort, and very much desired the appointment. His superior leadership skills and strategic acumen were unmatched. Yet when Roosevelt asked Marshall whether he would prefer to lead the D-Day invasion or remain on duty in Washington as chief of staff, Marshall demurred. He told the president that whatever his decision, Marshall would "go along with it wholeheartedly. The issue was simply too great for any personal feeling to be involved."

In the end, Roosevelt told Marshall that he "could not sleep at night with you out of the country," and the assignment went to Dwight D. Eisenhower instead. Ike succeeded dramatically, became a national hero, and rode his fame all the way to the White House. Some people might interpret Marshall's actions as a sign of weakness, but nothing was further from the truth.

Indeed, in Marshall's case, his quiet and modest demeanor masked tremendous drive and a will of iron. Thankfully for the free world, his ambition and willpower were not personal or selfish in nature, but directed solely toward the purpose of serving his country by defeating our enemies. He was ruthless in his decision making when the issue of winning the war was at stake.

In his book Good to Great, noted business author Jim Collins describes corporate CEO's who embody this combination of extreme personal humility with great professional determination as Level 5 Leaders. Collins and his team studied companies that made a leap from good results to great results and sustained those levels of performance for at least fifteen years. These companies produced stock returns during those fifteen years that beat the general stock market by an average of seven times.

While Collins expressly sought to avoid a conclusion that these stellar results were due primarily to great leadership ("Ignore the executives," he told his research team), he could not overlook the overwhelming data that proved that in fact Level 5 leadership was key. Every single company on the roster had Level 5 leadership at the time they made the transition from good-to-great.

Collins observes, "Level 5 leaders are a study in duality: modest and willful, humble and fearless. To quickly grasp this concept, think of United States President Abraham Lincoln (one of few Level 5 presidents in United States history), who never let his ego get in the way of his primary ambition for the larger cause of an enduring great nation. Yet those who mistook Mr. Lincoln's personal modesty, shy nature, and awkward manner as signs of weakness found themselves terribly mistaken…"

Collins identifies such CEO's as Darwin Smith, who led Kimberly-Clark from 1971-1991, and Colman Mockler, CEO of Gillette from 1975 to 1991, as classic examples of Level 5 leaders who achieved extraordinary results during their tenures, but who were also always quick to give credit to others (not surprisingly, neither man is a household name today). Collins was "struck by how the good-to-great leaders didn't talk about themselves… It wasn't just false modesty. Those who worked with or wrote about the good-to-great leaders used words like quiet, humble, modest, reserved, shy, gracious… and so forth."

Finally, in contrast, Collins also found that in two-thirds of the companies against which he compared the good-to-great companies, leaders with enormous egos not only did not perform as well, but frequently "contributed to the demise or continued mediocrity of the company."

Where do you, your boss, and the rest of the leaders in your organization fall on the humility spectrum? Today, the simple truth is that we need more leaders like George Marshall, Darwin Smith, and Colman Mockler-- people who show humility while striving to accomplish great things for the institutions they serve.

Sunday, January 3, 2010

Bring Out the Best in the People Around You

The two men could not have been less alike. One was a short, boisterous, cigar-chomping Jew from Brooklyn. The other was a tall, moody, intensely private African-American from Louisiana and Oakland. Yet over time, these two men found their common ground and formed a bond of friendship that became legendary.

Red Auerbach was one of the greatest coaches in the history of the National Basketball Association, and Bill Russell one of the game's all-time best players. Together, they led the Boston Celtics to 11 N.B.A. championships in 13 seasons. As chronicled in Russell's wonderful new book, Red and Me: My Coach, My Lifelong Friend, they became devoted to each other until Auerbach's death in 2006. Perhaps the most outstanding characteristic of these two leaders was their uncanny ability to bring out the best in the people around them.

Bill Russell said of his relationship with Auerbach, "Although we came from different tribes as men, we recognized early on that as professionals we had a common agenda: to win basketball games… Our core philosophies- of how to be men, how to be professionals, how to be friends- were in tune, so we never had to talk about who we were or how to conduct ourselves. We just lived it. Over the next thirteen years, basketball set the stage for our relationship to evolve from caution, to admiration, to trust and respect, to a friendship that lasted a lifetime."

Russell joined the Celtics in 1956 and ultimately became team captain. He was especially noted for his unique ability to bring out the best in his teammates. In a review of Russell's book for the New York Times, former basketball star and U.S. Senator Bill Bradley wrote, "[Russell] had thought about the game and his role in it so much that it was only a matter of learning his teammates' strengths and weaknesses before he was capable of elevating their games. It is a rare player who thinks, 'How can I help my teammate help the team?' Russell and Auerbach understood that in a winning culture, selflessness is just common sense."

Russell's ability to influence the play of his teammates started, very importantly, from the rock solid foundation of his own formidable skills as a player. He was a five-time league M.V.P. and physically gifted with great height and leaping ability. Beyond his obvious athletic skills, he was a true innovator on the basketball court. He focused on defense as the key to a team's morale, in a way that had never been tried before. In an era when players were coached never to leave their feet while playing defense, he became the game's preeminent shot blocker, dominating opposing offenses and forcing them to adjust to his intimidating new tactics.

Russell's sheer competitiveness also intimidated opponents, and won the respect of his teammates. Bradley said, "He wanted to win every matchup, every game, every title. He waged psychological warfare, on and off the court." Because of their high regard for Russell's outstanding ability and fierce desire to win, his teammates were very open to his energetic attempts to push them to improve their own games. He consciously studied the play of every Celtic and willed his teammates to perform to their highest potential. The result was an unprecedented string of championships.

Auerbach, too, appreciated the importance of each individual in the whole grand scheme. Bradley observed, "[Auerbach's] genius was to relate to each player individually. What worked for one player didn't work for all players." Auerbach even handled Russell differently, allowing him to rest during practice once the regular season began for purposes of keeping him fresh for an entire grueling N.B.A. campaign. Russell's teammates did not resent this preferential treatment because they knew, once the game began, no one was more committed to winning than their captain.

As a peer colleague, do you ask yourself Bill Russell's very important question, "How can I help my teammate help the team?" It is the rare person who does this. It starts with one's own skills and performance. Outstanding results engender credibility and respect. From this foundation, it becomes possible to help even the worst performer on the team get better. But the selflessness, motivation, and energy must be there.

As a leader, like Red Auerbach, do you understand that each member of the team needs to be led differently? Do you take time to get to know your people as individuals and to adjust your approach accordingly? Do you work to get the best out of each person on the team, taking into account their unique skills and abilities? Such a model makes life more complicated and requires time and hard work, but outstanding results will follow.

Bill Bradley won championships with the New York Knicks and he recalled the joys of being part of a team, like the Boston Celtics, where people made a concerted effort to bring out the best in each other: "… the bond among players lasts a lifetime… You never forget your teammates' loyalty and how you returned it in full measure, and how that trust and mutual respect allowed you to be a champion."