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Leadership thoughts from PeopleFirst HR

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As companies grow, they may outgrow some key employees

So you have an employee or a few employees who have been with you for a long time. He or she has proven to be a great performer over the years. You’ve probably built significant rapport and loyalty with this person or person’s. Unfortunately employees don’t always grow with entrepreneurial companies.  This is one of the hardest lessons to learn as an entrepreneur or new executive.

As companies grow, they tend to outgrow some of their employees. That’s not surprising: it’s hard for fast-growing organizations to provide enough time and development for employees to keep up with ever evolving needs of the organization.

I’ve seen many examples of owners, entrepreneur’s, CEOs starting small businesses or division with 3 to 5 people. One or two people outshines everyone with their commitment, knowledge and execution.  The owner begins trusting an individual because they know the person can be relied upon to get things done.  And typically their strengths are very different from the owner’s core strengths, so the value to the owner is tremendous in growing the business.

As the business begins to grow, however, a different reality sets in.  Expanding into a company with 20, then 30, and then 40 employees may require a different skill set.  The company may need a different type of leader.  The employee who’s great with your 20, 30, or 40-employee Company will not necessarily be the person to run and operate a business with 300 employees.

Often, I think we can recognize this in our gut, but because of the loyalty we’ve built up, we have a hard time determining and actually deciding to take action.  We let the issue fester, then it only gets worse.

The best way to deal with this situation is by addressing it head-on.

As soon as you notice the issue, or have a gut feeling that you might have one, address it with the employee.  Talk with them about how roles change rapidly in a growing company and ask them how they are feeling about how they are keeping up.

You may find the conversation alone heads off the issue.  Perhaps the person simply hasn’t realized that what is required of them has changed.  This will call it out to them.

Perhaps they are truly struggling and don’t know how to deal with the issue themselves.  This will open up the dialogue necessary to help them get past it.

Perhaps they believe they can make the jump.  This will give you the opportunity to discuss expectations and put them squarely on the table.

In most cases, employees who are struggling with this issue are more uncomfortable than you are.  Putting the possibility on the table (in the right way) communicates your respect for them as a person and gives them the opportunity to dispel the myth or be part of the solution.

Discuss alternatives.

After your initial conversation, your hunch should be either quickly dispelled or rapidly confirmed.  Once it is confirmed, it’s time to discuss alternatives.  If the individual recognizes the issue, discuss alternatives.

Perhaps the role has grown large enough that it should be split into two.  Perhaps there is a new role that is more aligned with their skill-set.

Because you have addressed the issue proactively, you do not have a performance issue.  Instead, you have an organizational optimization issue.  Work together to overcome it.

Part ways, respectfully.

Unfortunately, in many cases an employee is unable to recognize that the company has grown beyond their capabilities in a certain role.  Still others recognize it but are unwilling to embrace change.  They want to hold on to the role that they feel is rightfully theirs.

In both of these situations, it is important that you part ways, respectfully.

I have found over and over again that dragging this process out is painful and detrimental to both the individual and the employee.  It is most often a relief to both your organization and the employee if you take swift action.  When you do, remember, this was your go-to employee.  Take care of them.  Offer them a nice package and celebrate their success as they move on to their next challenge.

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Leadership Development – Company Differentiator

One of the biggest differentiators of companies that excel in leadership development is the commitment and ownership of the CEO or top executive.  It’s easy for a CEO to just pay lip service to leadership development. All they need to do is show up at the annual talent review and nod their heads; stop by a few training programs to give a quick talk, approve the training budget, and read the script written for them by HR that tells them to say, “People are our more important assets” at every employee gathering.

You can tell what’s really important to them by taking a look at their calendar to see where they spend their time, the agenda items on their executive team meetings, and by what gets measured.

So when it comes to leadership development, what’s the difference between a CEO that is just “involved” and one that is really committed?

I for one think the following 7 things would give any CEO the best return on their time invested. The good news is that none of these involve spending much money, and you may already be doing many of them:

Focus on results and don’t let the process be the tail wagging the dog.

I’ve seen way too many organizations get caught up in the process and lose sight of the results. They create complicated processes and forms, thick binders, have long meetings, and put way too much importance on impressing their board of directors. Once the meeting is over, the binder gets set aside and nothing happens until the next year. VPs and senior managers soon catch on that it’s nothing but an exercise and focus on looking good instead of being good.  This doesn’t mean the annual CEO and board reviews are not important — it’s been my experience that if you don’t do this, then nothing happens. Events, like annual check-ups, force things to happen that otherwise get pushed aside because they are not urgent.

Have high expectations for the head of HR.

The CEO’s HR partner not only needs to know all of the best practices and processes, but they must have the ability to influence and be trusted by the executive team as well as be the CEO’s trusted adviser on talent. It’s a tough balance — they may be coaching a struggling VP one day and recommending to the CEO the same VP be replaced the next day. They have to be able to play match-maker and broker job changes, and manage all of the ego and politics involved.

Practice what you preach.

Committed CEOs publicly work on their own leadership development, then work on the development of their executive team. They coach them, give them feedback, and develop individual development plans with them. They support their development. A CEO’s behaviors are powerful — they set the expectations for the rest of the management team, creating a trickle-down effect of leadership development.

Be the Chief Talent Broker

While there are challenges to cross-functional movement of high potentials, somehow the companies best at leadership development figure out how to do it without damaging the business and ruining careers. They intentionally move their high potentials from job to job to get them ready for bigger jobs.

If it’s left up to each manager, it won’t happen. Why should they? It’s certainly not in their best interests to give up their best talent. The CEO is the only one (other than the HR vice president) looking at leadership development from a what’s best for the company, long-range perspective. Managers won’t do it — or even see value in it — unless the CEO establishes it as an expectation and encourages them to give up their top talent and be willing to accept (and develop) unlikely developmental candidates.

Spend time assessing talent.

Assessing talent is all about having regular talent reviews, conducting formal assessments, and spending time with high-potentials. Know what to look for, too — indicators of success in larger roles isn’t the same as performance in a current role. Astute CEOs know how to ask the questions, what behaviors to look for, and the difference between performance (results) and leadership potential.

Hold others accountable for assessing and developing future leaders.

All too often companies will conduct talent reviews and succession plan reviews and discuss development and then, a year later, nothing happens. A CEO needs to establish the vision, set meaningful goals, measure them, and hold people accountable. It takes time to change a culture, but a few public coronations and hangings help send the message that it’s important.

Take decisive action on underperformers

Entrenched underperformers block the development and advancement of an organization’s high potentials.  Leaders don’t always do a good job differentiating excellent performance for mediocre performance (everybody’s a B or A, and nobody’s a C), and they are too slow to take action.


Can Corporate Culture be Changed?

Organizations seek out my assistance in helping them make their organizations better. “Better” might mean more effective leadership, higher performance, improved employee retention, effective compensation plans, improving team performance or simply creating a more cooperative, positive work environment.

After a thorough assessment of a client’s current operation and needs assessment, I am in a better position to present solutions that will address their gaps. Some of those solutions involve  policy changes, process changes, some involve personal coaching, and some involve proactive culture refinement — culture change.

When considering culture change, many senior leaders believe that corporate culture cannot be changed. I’m not surprised at this belief.  In my experience most senior leaders, throughout their entire careers have not lived through successful culture change. Even fewer have led successful culture change.

But here’s the question: Can you change how an organization performs?  Absolutely! By changing how individuals perform, leaders can change how the organization performs.

Leaders can change the way individuals perform by:

  • Setting clear performance goals.
  • Directing, supporting, coaching and delegating where needed.
  • Measuring progress and accomplishment.
  • Celebrating progress and accomplishment.

These activities, done consistently with a service approach often lead to increased employee performance which almost always affects service quality and commitment which leads to happier customers and growing profits. This is the service profit chain at work.

Changing your organization’s culture is no different from changing how your organization performs. It requires intentional definition of, communication of and accountability for your company’s:

  • Purpose: The reason you are in business.
  • Deliverables: Your committment to high-quality products and services.
  • Culture: Values you stand for and live by daily with stakeholders, peers and customers.

Corporate culture is the most important driver of what happens in organizations, and senior leaders are the most important driver of their organization’s corporate culture.

To change an organization’s culture, leaders must change how they spend their time and what they communicate and reinforce on a daily basis. They have to change what they pay attention to.  Their focus shifts from great performance to great performance WITH great citizenship.

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Creating a Culture of Smarter Thinking

Innovation has always been a business necessity.  How many times have you worked with individuals or teams that work really hard, but not always in the most effective way.  I am sure you heard the mantra “work smarter, not harder”.  Art Markma, a professor of psychology at the University of Texas and director of the Human Dimensions of Organizations program recently published a book “Smart Thinking”.  In the book he discusses several straightforward things leaders can do to help everyone in an organization think more effectively. The more you know about the way your mind works, the more that you can improve the thinking of the people around you. Here are some things you can do to get the ball rolling toward a smarter organization.

  • Stamp out multitasking. This is one that has been debated quite a bit and we are all guilty of it,   virtually everyone today does some type of multitasking.  Markma says “The human mind simply isn’t designed to do more than one kind of complex thinking at a time”. When people are working on complex material, give them permission to ignore the phone, shut off the e-mail and shut down instant messaging. When you bring everyone together for a big meeting, get them to “be here now.” Ban smartphones and Internet browsing during meetings.
  • Encourage openness. You never know where the next good idea is going to come from. So encourage people to try on new ideas for size before deciding whether to pursue them. Too often, people assume that the fiercest critic in the room is the one who looks smartest. But if you criticize before deeply understanding an idea, you won’t be able to use that knowledge later when you need it. Set an example by focusing first on the positive parts of a new proposal before finding potential flaws.
  • The company succeeds when “we” succeed. Our culture is one that prizes individualism. Ultimately, we reward people who make important contributions. Credit and publicity tend to go to particular individuals who make important contributions. History rewards great people, but rarely great groups. But an organization cannot succeed without a group contributing deeply to that success. Lead by promoting the value of group success and reward groups for their achievement. In the long run, that provides everyone with the incentive to learn and grow.
  • Create desirable difficulties. We use technology to make things easier for us. And, of course, there are lots of things that ought to be easy. It is wonderful that we can send documents across the globe in seconds and that we can get research papers with the click of a link. But technology cannot make learning easier. Gaining true understanding of complex situations requires effort. Don’t just provide summaries of key concepts to group members. If there is something that people need to understand, encourage everyone to dig in and work on it.
  • Support smart habits. There is a lot that we do mindlessly each day. We don’t have to think about where the light switch is in our office or how to find the gas and brake pedals in the car. Those habits are smart, because they allow us to focus our mental energy on more important matters. Similarly, don’t disrupt the habits of people in your organization without careful planning. Open workspaces, for example, don’t allow people to develop habits for where their desk supplies are and can cause disruption. Changes in internal websites and forms cause people to think about tasks that should be mindless. And remember change for the sake of change costs more time and mental effort than it is worth.

This book provides simple yet valuable advice that can be applicable to anyone and any situation. I would recommend it to anyone with a curiosity and desire for living a smarter and more efficient life.

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Mutual Agreement

Negotiation is a fact of life. Everyone negotiates something every day. At work we negotiate about schedules, budgets, task allocation, you name it.

One thing is clear: certain people will shy away from negotiating because they fear the confrontation.  One way to minimize the whole confrontation thing is to establish a tone for a mutually worthwhile conversation

Think about using questions like:

1. “What would you like to see as one of the outcomes today?”
2. “What else can I tell you about my situation?”
3. “What else can you tell me about your ideas so that I can better understand your perspective?”
4. “What do you need from me that would be helpful?”

You get the idea.

You’ll know you’ve reached the most cooperative agreement when everyone at the table says, “This is the best decision possible given all the facts we have.” Emotionally, no one will feel worse off than before, and may have even greater respect for each than before.

The biggest possible payoff: A result that offers bigger benefits than anyone originally thought possible.

Any method of negotiation should be judged by three criteria:
Should produce wise agreement if agreement is possible;
Should be efficient;
Should improve or at least not damage the relationship between the parties.

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Distorted Performance Expectations

I spent the greater part of my day with leaders who are sometimes baffled by a performance issues. In many of these cases it is the result of The Halo
Effect.  The Halo Effect happens when someone possesses an outstanding characteristic or skill set and we allow our positive judgment of that single characteristic to influence our total judgment of that person.   So we end up evaluating that person exceedingly high on many traits because we are so magnetized by his or her performance in one trait. For example, if a person is very persuasive during one-on-one discussions, we may presume a host of related attributes: great presentation skills, potential sales star, group spokesperson. . .Do I feel a promotion happening here.

The effect is worth noting because it can wreak havoc with management. Supervisors responsible for employee appraisals can let the strong rating of
one critical area influence the ratings for all of the other factors tied into the halo effect.   Many times individuals are prematurely promoted or given roles they won’t be effective in.  Managers wonder why the individual isn’t performing the way they anticipated.  In fact they may be…just not in the areas mistakenly attributed.

There is an opposite effect that is equally insidious known as the “Horn Effect” (think of a little cartoon devil with horns). It works the same way. If a person seems particularly lacking in one key trait, that person will  often be labeled as deficient in other related traits as well. One simple example: If one is frequently late for work (even though there may be important extenuating circumstances known to the company), the word around the office is that (s)he is “not committed” or even “negligent” regarding work tasks.

What To Do:
Recognize the reality of each of these effects and how easy it is to be lured into their respective auras. When you start wondering why Phil in Accounting, who
graduated Phi Beta Kappa, is terrific at crunching numbers but fumbles at explaining their meaning and application, put on your Discernment hat. Break
down the elements of the job and begin to assess, based on observable, verifiable performance, what he does well and where he struggles. The first job
of a leader is to accurately assess reality. The sooner a manager can discern the high-medium-low performance areas, the sooner that person’s talents can be
used effectively and a developmental plan put into place.

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How to Spot an Eagle

Aardvarks are really good at one thing: eating bugs — sometimes 50,000 in one night! No other creature on the planet can match their appetites. Star performers in their own corner of the
jungle, when they tuck a napkin under their aardvark chins, they produce impressive results, just like your hardworking employees can in their jobs.

Too often, however, in an attempt to do the aardvark and the organization a favor, a decision maker will insist the aardvark fly like an eagle. There are no flying aardvarks. You can certainly
throw an aardvark out of an airplane midair, but you won’t end up with a flying aardvark. Being destroyed doesn’t motivate your employees, not the one who just failed or those who witnessed the crash.

So how do you know the difference between an aardvark and an eagle? How can you recognize those who can and will engage in the critical but difficult work of creating strategy? Whether making a hiring or promotion decision, based on the individual’s proven record of success, ask yourself the following:

  • Does this person understand how to separate strategy from tactics, the “what” from the “how”?
  • Can this person keep a global perspective? Or does she or he become mired in the details and tactics?
  • Do obstacles stop this person?
  • Can he or she create order during chaos?
  • Does this person have the ability to see patterns, make logical connections, resolve contradictions and anticipate consequences?
  • What success has this person had with multitasking?
  • Can this person think on his or her feet?
  • Can this person prioritize seemingly conflicting goals — to zero in on the critical few and put aside the trivial many when allocating time and resources?
  • When facing a complicated or unfamiliar problem, can this individual get to the core of the issue and immediately begin to formulate possible solutions?
  • Is this person future-oriented and able to paint credible pictures of possibilities and likelihoods?
  • How do unexpected and unpleasant changes affect this person’s performance?
  • When in a position of leadership, does this person serve as a source of advice and wisdom?

The core competencies that drive a particular organization may differ, but the ability to think analytically and dispassionately remains constant. The overarching question is this: “When
acting in a strategic role, has this person typically performed as needed?” If the answer is “yes,” the person probably has the innate talent to be a strategic thinker and will just need to improve requisite skills to support the talent. If the answer is “no,” don’t gamble by putting this person in a more demanding position. As valuable as the aardvarks of the organization can be, virtually all organizations need more eagles, strong critical thinkers who can learn from mistakes and make bold decisions.

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Criticism and Perception

The very first performance review I received was based on a typical 1 to 5 scale with 5 being “exceed expectations”.  I was working in a hospital and the system was pretty straight forward, you worked hard and mastered your tasks and you were almost always going to get a 4.  The general perception was if you received anything less than a 4 you probably weren’t very good.  Well, I aimed for a 5, so I learned everything there was to learn about my job, suggested some improvements and if I was on duty my department always got high marks.  So, I was not surprised that I received 4 and 5’s in each category.   It pretty much went the same way for several years.  That is until my first management role, where I reported to the CEO.  She and I got along great.  My strength was people and hers was finance and negotiations, she was former CFO.  Before my review we really never sat down to discuss expectations, I just did what I had to do to support her, the company and the other senior leaders.  During our first review she was very positive about my overall performance but when she got to the finance/accounting area she gave me a 3.  She told me I was doing great with monitoring our finances and maintaining a decent size budget, but I needed to strengthen my overall knowledge of the financial accounting side of the business.  She further explained that this would really provide me with a stronger foundation in my future career opportunities.  To me, at that time, like many employees, considered a 3 to be average (but that’s a different subject) at best and it really surprised me.  I became defensive and probably stopped listening at that point trying to figure out why she gave me a 3.    My mind quickly went to the fact that she was a financial nerd and expected perfection. 

But as I think back to that review, she really taught me a great lesson.  She cared enough to step out of the norm and tell me where I needed to improve, and I did.  Had she not been willing to tell me the truth, I would have never focused in the finance and accounting area since it is not exactly the enjoyable part of my job.  But I had to be knowledgeable in all areas of business if I was going to continue to grow and expand in my career.

Any criticism can be hard to accept. But surprise feedback — criticism that seems to come without warning is the hardest. We’re far more likely to be defensive.   About the only thing I would have suggested to her today would be to have discussed her expectations with me before that meeting and provide me with information about those weak areas so when that review time came, I wouldn’t be surprised.

The other strong lesson I learned is to prepare your employees on your methodology as it relates performance reviews.  If you don’t give high marks, unless someone walks on water, tell them ahead of time how you will be rating them.  Everyone seems to take criticism better, when it doesn’t come as a complete surprise.

So as you listen to criticism and your adrenaline starts to flow, pause, take a deep breath, and:

Look beyond your feelings. Look beyond their delivery. Feedback is hard to give, and the person offering criticism may not be skilled at doing it well. Even if the feedback is delivered poorly, it doesn’t mean it’s not valuable and insightful. Not everything will be communicated in “I” statements, focused on behaviors, and shared with compassion. Avoid confusing the package with the message.

Don’t agree or disagree. Just collect the data. If you let go of the need to respond, you’ll reduce your defensiveness and give yourself space to really listen. Criticism is useful information about how someone else perceives you. Make sure you fully get it.

Later, with some distance, decide what you want to do. Data rarely forces action, it merely informs it. Recognizing that the decision, and power, to change is up to you will help you stay open.

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Don’t compare employees

We work with adults, well I know it doesn’t seem like that all the time and it doesn’t matter what position you hold.  But one mistake I see managers make is comparing one employee to another, like teachers may have compared you and your sibling when you were younger. 

It goes like this “When Amy was in your job, she always contacted the sales managers to get the monthly updates.  I think that was a better way than how it’s being done now.”  These kinds of remarks don’t prompt positive changes or win over employees.  If it truly worked more effectively when Amy did it, then why wasn’t this employee trained the same way. OK that’s too easy.  But you can say something like “How do you think we can get the sales managers to provide us with the monthly updates more effectively.  At one point we called them to get the updates, but I am open to whatever process you develop to get it done.”  This method still addresses the way it worked but allows the new employee to look at other options, while understanding this is important to accomplish.

So the next time you get that feeling to compare one person’s work with another, simply stop and think about one or more of these:

  1. Compare performance and behavior against the goal or expectation
  2. Compare performance against the standards set to earn a bonus or reward
  3. Compare performance against some desired goal that your employee has expressed

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Not just once a year – Performance Coaching

A critical part of the manager/employee relationship is open communication between the two.  What is  expected from the employee and how well are they accomplishing their responsibilities.  How should they expect you to lead them. Most Companies have a formal Performance Management Program used to evaluate performance on an annual basis, but informal, on-going performance coaching is critically important.  Reviewing performance should not just be an annual event, but rather a continuous cycle.

More specifically, performance management:

  • is a shared responsibility between you and each individual who reports to you; some of us forget this
  • provides mutual understanding between the manager and employee regarding what is expected of the employee and how well the employee is meeting those performance standards;  Employees can’t meet expectations, if they don’t know what they are.
  • empowers the employee to perform a variety of tasks, and face new challenges for growth;
  • sets and monitors progress against clear goals;
  • includes regular documentation of performance;
  • includes timely feedback on performance between the manager and employee;
  • includes discussion on professional development;
  • recognizes hard work and success; not just areas for improvement!

An effective performance management program provides many benefits to the organization and to its managers and employees.  Good performance management results in:

  • focused movement towards organizational goals;
  • informed employees;
  • more successful and productive employees;
  • more meaningful work for employees;
  • better working relationships between managers and employees;  Mutual respect
  • increased communication;
  • legally defensible management decisions;
  • all around better quality of interaction.

Remember regular communication and feedback doesn’t need to be complicated or a long process, it just needs to be regular. Some simple steps and commitment is all you really need.