The Business Sensei

What Are You Really Asking For?

The names have been changed to protect the silly…

History teacher Norman Conquest had a very difficult student, Sasha Pandiaz. Sasha was constantly disruptive in class, driving Norman up the wall. Finally, Norman decided on a simple solution: when Sasha misbehaved, he would be sent out into the hall for five minutes. If he misbehaved three times, he spent the entire class sitting in the hall.

Inside of a week, Sasha was spending the entirety of each class in the hall. Sasha, it turns out, didn’t like the class. Although Norman thought he was punishing Sasha, apparently no one bothered to inform Sasha of that. As a result, Sasha was quite happy to miss each class; the long-term negative of a bad grade in the class was simply too far off and abstract to change Sasha’s behavior.

Fred was the VP of Engineering at Root-2 Systems. Fred had the habit of indicating his displeasure with engineers in his department by assigning them projects that were not particularly fun or interesting. At least, Fred didn’t find them particularly fun or interesting. Unfortunately, the engineers did. Rather than feeling punished, they thought they were being rewarded! As one engineer put it, “I thought Fred was ready to kill me, but then he gave me this really cool project.”

Thus, for example, instead of realizing that Fred was punishing them for blowing off a meeting, engineers believed he was rewarding them for skipping a meeting that they thought would be a waste of time. As a result, they kept repeating the behaviors that were infuriating Fred. By the time he figured out what was going on, Fred was bald.

At Mandragora Systems, Joe took over a key product team. He regularly exhorted his employees to work together: “We’re a team!” Joe cried loudly and often. But when it came time to evaluate performance, the song was a bit different:

“What were you doing with your time?”

“I was helping Bob.”

“If you’d finished your work, why didn’t you come to me for more?”

“I hadn’t finished.”

“Then why were you helping Bob?”

“It was something I could do quickly and would have taken him all night.”

“If Bob can’t do his job, that’s his problem. Worry about your own work.”

Astute employees soon realized that the key to a good review was to focus on their own work and devil take the hindmost. While Joe won points with his boss for his aggressive, no-nonsense style, and for his success in identifying weak players and eliminating them, something rather unexpected occurred: team performance declined on his watch. Instead of a team working together and combining their strengths, he ended up with a group of individuals out for themselves and exploiting one another’s weaknesses. The fact that this was damaging to the company in the long-run didn’t really matter as it was very definitely beneficial to the employees in the short-run.

There are several lessons to be drawn from these experiences.

First, it doesn’t matter whether you think you’re rewarding or punishing someone. What matters is what they think. If they think they’re being rewarded, they will naturally attempt to continue to get those rewards. If that means you lose your hair, so be it. If, on the other hand, they think they’re being punished, or at least not rewarded for their efforts, they will change their behavior no matter what you might say. Your actions really do speak louder than your words.

Second, no matter how much we might tell employees to think about the long-term rewards and delayed gratification, short-term rewards offer an almost irresistible lure. If you create a contradiction between the short-term and the long-term, most people will go for the short-term.

Third, if you want a strong team, you must reward team-oriented behaviors. If you only reward individualism, you’ll get a collection of individuals. For some jobs, that really is all you need. For many other jobs, though, it’s virtually impossible to succeed without a team.

In the end, people will do whatever they hear you telling them to do. It pays to make sure that what they are hearing is what you think you are saying.

Death of Thousand Knives

Very few companies are ever driven out of business by their competitors.

I’ve found that this statement upsets a great many people, all of whom are quick to jump up and start providing examples of companies that were, in fact, driven out of business by their competitors. This is missing the point. Indeed, it’s rather like a detective in a murder mystery concluding that the cause of death was that the victim’s heart stopped. It matters whether the heart stopped due to lead poisoning, for example in the form of a bullet, or due to some other cause. Indeed, understanding exactly what led to that heart stopping moment is a key part of solving the mystery.

Similarly, while it’s not so unusual for a failing company to have the coup de grace administered by a competitor, how they got to that point makes all the difference. Focusing only on the end point provides a very simple, comfortable solution, but not necessarily a particularly useful one.

Robotic Chromosomes, for example, was a company that dominated a particular niche in the bioinformatics market. They were an early entrant into the field and their products were initially the best on the market.

Over the course of several years, though, they developed a view of their clients as idiots. The fact that their clients were all highly educated research scientists did not enter into the equation. If they had trouble using the software, they were idiots. As a result, the company became increasingly less open to feedback from either their clients or from the market. While their market share was increasing faster than the market itself, they could get away with that attitude. Eventually, though, their growth started lagging the growth in the market. Phrases like “law of large numbers” and “temporary aberration” were batted about. When their market share started shrinking, phrases like, “temporary aberration” became even more popular. The view of the clients as insanely stupid for buying competing products also became more common.

Today, they no longer exist. Were they driven out of business by their competitors? Only in the sense that they put themselves in a position to allow their competitors to drive them out of their dominant position in the market. Sure, their competitors may have pushed them over the cliff, but they were the ones who chose to walk to the edge and lean over.

Now, it may reasonably appear from the preceding description that Robotic Chromosomes was taken down by a clearly defined event, that is, viewing clients as idiots. That is not, however, quite correct. While it may appear that way in retrospect, the reality is that Robotic Chromosomes suffered from a series of cascading errors. Each mistake was small, easily overlooked or ignored. Each mistake led to more mistakes until eventually the company was suffering from so many small cuts that it eventually had no strength left to resist when its competitors moved in. So how does a company avoid this death of a thousand knives?

The obvious answer is that they needed better communications. While true, it again misses the point. Communications is where problems show up, but the communications are rarely the problem. Rather, the dysfunctional communications are the symptom of the problem. It’s critical to look beyond the symptoms to identify the real problem. Otherwise, you spend all your time looking at the wrong things, as Robotic Chromosomes so eloquently demonstrated.

Avoiding that fate requires a willingness to accept negative feedback; it means being willing to hear what people are saying about your product, your service, or your management style. If you aren’t willing to listen, or if you structure the way in which you listen to negate the feedback, you’re setting yourself up for failure, one step at a time. For example, creating a culture that mocks and demeans your clients is not a recipe for success, and closes you off from valuable feedback from those clients.

Being willing to accept feedback is only a first step though. You have to create a context in which employees are not afraid to give you that feedback, and in which they believe that providing feedback is worthwhile. If people that they’ll be punished for being critical or regarded as “not a team player,” it’ll be hard to get them to provide feedback.

Next, you need to clearly define your goals and also define how you’ll know whether you’re succeeding or failing. Robotic Chromosomes had very fluid definitions of success, definitions that shifted regularly to avoid facing unpleasant results. It’s important to separate the evaluation of the feedback you’re getting from the testing to see if the criteria for that evaluation are valid. In fact, verifying the validity of your criteria should be done before you then evaluate your feedback: otherwise, it’s too easy to redefine success and give yourself a few more cuts. None of them seem all that bad at the time.

Step by step, over the course of several years, Robotic Chromosomes successfully created an environment where any negative feedback could be ignored because that feedback was always coming from idiots.  Their competitors didn’t drive them out of business. They drove themselves out of business; their competitors simply put them out of their misery. How will you avoid the death of a thousand knives?

It’s Not a Sprint, It’s a Hike up a Mountain!

Last summer, I had the opportunity to hike Algonquin. For those who are not familiar with Algonquin, which included me up until about two days before I climbed it, Algonquin is the second highest mountain in New York state. This translates to roughly 5100 feet, which may not be much by Sierra Nevada standards, but when actually doing the hike such subtleties swiftly become irrelevant. The trail up Algonquin starts at 2000 feet and climbs 3000 feet in 4 miles. There are a number of words for a trail like that; one of the less emotionally expressive ones is “steep.” The estimated time for the hike was 8 hours.

I have long believed the old adage that building a software project is a marathon, not a sprint. I was wrong. It’s a hike up a mountain. Consider that a marathon may be long, but it is basically predictable. You know how far you are going and exactly what the conditions will be along the way. When you get to the end, you’re done. Maybe it’s a big circle or there are busses waiting to take you home; either way, the finish line is the finish line.

Climbing a peak like Algonquin, however, is a different experience. At the base camp, the weather was sunny and warm, a typical August day. My wife directed my attention to the sign that said that the temperature at the peak was 40 degrees Fahrenheit, just a tad cooler. I hadn’t noticed that as my attention was on the sign that explained that no matter how beautiful the weather, sudden snow storms were still possible. Yes, even in August there are occasionally snow storms at and around the peak.

The trail itself started off very smooth and easy. My brother-in-law set a good pace, since we wanted to be up and down before dark. Assume one mile per hour, was what he told us. I was thinking that the trail wasn’t that hard, so why such a low estimate? Then we reached the steep part. Well, at least the part that seemed steep until we got to the really steep part. Then it got steeper from there. Suddenly, a mile an hour seemed optimistic.

See the connection to a software project yet?

Even a difficult project seems pretty manageable at the start. Sure, everyone talks about the inevitable rough patches, but no one really expects them to seriously derail the schedule. But then it gets steep; or, in other words, something turns out to be much harder or more complex than expected. Lack of planning? Not really; planning is important, but it can only take you so far. Sometimes you have to plan to not know something until you get there. Your plan needs to include how you’ll deal with that discovery.

I didn’t realize how steep the hike up Algonquin would be. But, I had a hiking stick and my wife was using poles. My stick was very useful; on one particularly wet and slippery section of rock, it nobly sacrificed itself to save my ankle. The, now much shorter, hiking stick was still useful in various creative ways on some other impressively inclined sections of the trail.

Preparation can seem pointless until you need it. If you haven’t prepared properly, your will to win won’t matter. That said, sometimes you also have to improvise and be willing to back up and try something different if your first idea doesn’t work.

Algonquin peak was beautiful. Despite the weather reports, it wasn’t nearly as cold up there as expected. No sudden snowstorms came rolling in. Of course, it was also only the halfway mark; we still had to hike back down. That didn’t stop us from having a picnic and enjoying the view; it’s important to celebrate successes along the way, even if you still have more to do. If you never stop and recharge, you’ll never maintain the focus necessary to reach the end. Hiking a wet, steep, trail, that can mean a blown knee or busted ankle; with software, it can mean endless delays, poor design decisions, and a buggy release.

In the end, our 8 hour hike took us closer to 10 hours. Fortunately, we’d started early in the day so we didn’t run out of light; if night had fallen, that would have been a serious problem. Although I did have a flashlight, I had neither a headlamp nor any desire to spend the night on the mountain. Leaving a little more time than you think you need is always a good idea; projects inevitably take longer than expected. Getting stuck on a mountain means a very long, unpleasant, and potentially serious delay; being too aggressive with your schedule can likewise trigger unexpected problems. Putting in some slush time prevents the unexpected from becoming the catastrophic.

As we finished the hike and emerged from the woods into the sunset, we were both exhausted and exhilarated. Algonquin is a tough hike; we celebrated with dinner at a very good restaurant. At the end of your projects, what are you doing to celebrate? No matter how dedicated people are and how much they enjoy the activity, there are sections that are just exhausting. Taking the time to relax and have some fun after the slog helps us appreciate our accomplishments and prepares us to tackle the next big challenge.

 

 

 

Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Steve’s latest book, “Organizational Psychology for Managers,” sold out at Amazon.com two days after it was released. For more information, or to sign up for Steve’s monthly newsletter, visit www.7stepsahead.com. You can also contact Steve at 978-298-5189 or steve@7stepsahead.com.

Feedback Systems

This is an excerpt from my upcoming book, Organizational Psychology for Managers.

 

Feedback takes many forms. Equity, blame versus problem solving, and dealing with jerks provide feedback that tell people how the organization works and handles difficulties. In addition, there are the explicit feedback systems:

There is the feedback that people get that tells them how, and whether, the organization views them as people. This is feedback about the nature of the relationship between members and the organization as a whole.

There is feedback that goes up the organizational hierarchy, informing those higher up about conditions, the market, problems in the organization, and successes. This system often fails.

There is feedback in the form of performance reviews. Done properly, which rarely happens, performance reviews are very powerful and valuable to the organization: they provide a route by which members of the organization can grow, develop their skills, and build their status. They provide an important connection to the organizational narrative.

Relational Feedback

Psychologist Robert Cialdini observes that every culture has a social rule around favors: when someone does something for you, helps you, or gives you a gift of some sort, you are expected to reciprocate in some way. People who do not reciprocate, that is, those who take but do not give, are viewed as greedy moochers, and are often shunned by the rest of the society. Similarly, as Schein observes, those who give help but never accept it, are often viewed with suspicion or resentment.

In an organizational setting, people want to understand what sort of relationship they have with their coworkers, their boss, and with the more nebulous construct that is the “organization.” Reciprocity is one of the ways people explore that relationship. How the team and the organization handle reciprocity thus becomes a proxy for the relationship.

In early stage teams, people might refuse to accept help in order to avoid a feeling of indebtedness or incompetence, or might attempt to help another in the hopes of receiving help later or building status. In fact, for the team to be considered just and fair, there needs to be that mutual exchange of helping behavior in the early stages. Eventually, as the team develops, the mutual exchange of favors turns into a more abstract helping network in which team members automatically give and receive help as necessary to the accomplishment of the task at hand. It’s no longer about the individual ledger; rather, it’s the confidence that we will all engage in helping behaviors for the good of all of us. The trust that enables that to happen comes from demonstrating reciprocity in the early stages of team development.

Similarly, when members of an organization put forth an extra effort or engage in pro-organizational behavior outside the normal expectations, they expect that the organization will, in some way, acknowledge and repay their contribution. When the organization refuses to do that, or, even worse, treats the exceptional effort as “just part of the job,” this creates the image of someone who takes and takes but gives only grudgingly, if at all. For example, when employees work long hours or weekends in order to meet a deadline, they are sacrificing their personal time for the good of the organization. This is not, or at least should not be, a routine event. If it is, you have some serious problems!

How the organization responds to that sacrifice provides feedback on the relationship: reciprocity of some sort says that you are a valuable person; failure to provide reciprocity says that you are a tool or a slave, that the boss is selfish, that the organization does not value its members, or all of the above.

I’ve met many people who tell me that long hours are part of the job, and ask why they should thank or reward people for doing their jobs. The reason is simple: reciprocity is a proxy for the relationship, and the relationship determines trust. Without trust, motivation, team development, and leadership all start to break down.

Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Steve’s latest book, “Organizational Psychology for Managers,” is due out from Springer in late 2013. For more information, or to sign up for Steve’s monthly newsletter, visit www.7stepsahead.com. You can also contact Steve at 978-298-5189 or steve@7stepsahead.com.

Do Nice Guys Finish Last?

This is an excerpt from my upcoming book, Organizational Psychology for Managers

A question I get asked quite often is, “do nice guys finish last?”

The problem lies in the definition of nice.

Leaders should set high standards and then work like mad to help their team achieve those standards. That may require pushing people or telling them that they’ve screwed up.
There is a big difference between holding high standards, expecting people to meet those standards, and being an utter jerk. Jerks end up damaging the team and, given enough time, the company.

Similarly, leaders who refuse to tell you when you’re doing something wrong or who refuse to provide negative feedback when that feedback would be beneficial are not helping the team either.
So, if you define nice as “not wanting to upset or offend anyone ever,” then you probably will finish last. You’ll deserve it.

The nicest thing you can do is treat people as the high performers you know they can become, constantly push people to develop their strengths, don’t be afraid of difficult discussions, and don’t be afraid to take the actions necessary to build your team. We’ll look more at those actions in the next few chapters.

Understanding Hierarchy

This is an excerpt from my upcoming book, Organizational Psychology for Managers.

While I was writing this, I was asked the question, “How important is hierarchy on a team? I’ve been told it’s a problem. I’m responsible for 160 people, and I don’t know what I’d do without a hierarchy.”

Hierarchy is a tool. Whether it works for you or against you depends on how well you understand your tool and the situation in which you are using it. For my friend who has to manage 160 people, some sort of hierarchy is essential: without it, he’d swiftly be overwhelmed.

Hierarchy is a way of organizing and structuring a system. In a typical martial arts school, the hierarchy of belts provides each student a quick visual assessment of who knows what. This can make it easier for students to ask questions or know whom to imitate: learning is enhanced when we can imitate someone we see as similar to us. That person who is one belt ahead is easier to see as “like me” than the person who is many years and belts advanced. The hierarchy also provides visual feedback of the student’s progress, a key component of maintaining motivation.

One of the key roles of the military ranking system is providing a method of coordinating precision operations. It does this by, amongst other things, providing clear rules for whom to listen to and under what circumstances and managing transitions of power should a leader be abruptly removed or cut off from the team. Like the belt system in martial arts, it also provides visual feedback of progress.

In a large organization, hierarchy provides a structured way to know where you are in your career, an easy way to identify nominal skill levels, and a means of coordinating different business activities.

However, when hierarchies become inflexible or bureaucratic, they can easily turn into obstacles. Small companies that attempt to impose rigid, large company hierarchies are asking for trouble: they don’t need the overhead and lack of flexibility that hierarchies can create. A small business’s biggest strength is that it can shift course quickly. A large company, on the other hand, is slower to change but has more resources. It is silly and counterproductive for a small business to impose large company hierarchy and thereby give up its flexibility when it doesn’t have the resources to take advantage of that hierarchy.

Even in larger organizations, the structure needs to be flexible enough to permit good information flow up and down the hierarchy. Too rigid an adherence to hierarchy will reduce productivity and motivation and stifle innovation.

Hierarchy needs to be built out carefully, in accordance with the narrative, goals, and needs of the organization. Make sure you clearly identify what each level of the hierarchy means and how people move up. Periodically review your hierarchical structure and make sure it is still serving you, and not the other way around.

It’s Annual Review Time!

I was recently quoted in the NY Times on the subject of preparing for annual performance reviews.

The fact is, performance reviews are extremely stressful. Some business professors argue that we should drop them completely. Far too often, rather than providing benefit to the organization and useful feedback and a promotion to the employee, they only promote the Peter Principle.

Performance reviews can benefit both the employee and the organization, but they have to be done correctly. That means starting by establishing and agreeing upon goals. Of course, even that is tricky, as goals require actual thought to do well. The key point here is to identify desired outcomes and then focus on the behaviors and learning opportunities that will lead to those outcomes. Taking the time to focus on and identify productive and effective behaviors produces the most effective goals. It also means the performance review is now focused on providing the employee useful feedback and opportunities to build their strengths instead of arguing over failures and getting wrapped up trying to remediate weaknesses.

On that point, it helps considerably to recognize that people have both strengths and weaknesses. Yes, I know, this is a great shock to some people, particularly many managers. Tailoring goals to fit people’s strengths produces far more motivated, enthusiastic, and productive employees than goals that are focused around “fixing” their weaknesses. Don’t get me wrong: weaknesses that are based in a lack of knowledge are eminently fixable; but those that are based in a lack of fundamental talent or ability are simply frustrating to everyone when you try to fix them. If you give people some room to experiment and, gasp, fail, you and they will quickly figure out which is which and how to best focus their time and energy. Build people’s strengths enough and their weaknesses matter less and less.

The other key point on performance reviews is to provide specific feedback: it doesn’t help to tell someone they are “too aggressive” or “too passive.” That is your perception. Tell them exactly what they did that you saw as aggressive or passive. Good or bad, the details matter if you want someone to repeat a positive behavior or end a negative one.

Performance reviews can be a waste of time and energy or a powerful tool to improve performance in your organization. Like all power tools, you need to use them correctly.

Death of a Thousand Knives

As published in Corp! Magazine

Very few companies are ever driven out of business by their competitors.

I’ve found that this statement upsets a great many people, all of whom are quick to jump up and start providing examples of companies that were, in fact, driven out of business by their competitors. This is missing the point. Indeed, it’s rather like a detective in a murder mystery concluding that the cause of death was that the victim’s heart stopped. It matters whether the heart stopped due to lead poisoning, for example in the form of a bullet, or due to some other cause. Indeed, understanding exactly what led to that heart stopping moment is a key part of solving the mystery.

Similarly, while it’s not so unusual for a failing company to have the coup de grace administered by a competitor, how they got to that point makes all the difference. Focusing only on the end point provides a very simple, comfortable solution, but not necessarily a particularly useful one.

Robotic Chromosomes, for example, was a company that dominated a particular niche in the bioinformatics market. They were an early entrant into the field and their products were initially the best on the market.

Over the course of several years, though, they developed a view of their clients as idiots. The fact that their clients were all highly educated research scientists did not enter into the equation. If they had trouble using the software, they were idiots. As a result, the company became increasingly less open to feedback from either clients or the market. While their market share was increasing faster than the market itself, they could get away with that attitude. Eventually, though, their growth started lagging the growth in the market. Phrases like “law of large numbers” and “temporary aberration” were batted about. When their market share started shrinking, phrases like, “temporary aberration” became even more popular. The view of the clients as insanely stupid for buying competing products became more common.

Today, they no longer exist. Were they driven out of business by their competitors? Only in the sense that they put themselves in a position to allow their competitors to drive them out of their dominant position in the market. Sure, their competitors may have pushed them over the cliff, but they were the ones who chose to walk to the edge and lean over.

Now, it may reasonably appear from the preceding description that Robotic Chromosomes was taken down by a clearly defined event, that is, viewing clients as idiots. That is not, however, quite correct. While it may appear that way in retrospect, the reality is that Robotic Chromosomes suffered from a series of cascading errors. Each mistake was small, easily overlooked or ignored. Each mistake led to more mistakes until eventually the company was suffering from so many small cuts that it eventually had no strength left to resist when its competitors moved in. So how does a company avoid this death of a thousand knives?

The obvious answer is that they needed better communications. While true, it again misses the point. Communications is where problems show up, but the communications are rarely the problem. Rather, the dysfunctional communications are the symptom of the problem. It’s critical to look beyond the symptoms to identify the real problem. Otherwise, you spend all your time looking at the wrong things, as Robotic Chromosomes so eloquently demonstrated.

Avoiding that fate requires a willingness to accept negative feedback; it means being willing to hear what people are saying about your product, your service or your management style. If you aren’t willing to listen, or if you structure the way in which you listen to negate the feedback, you’re setting yourself up for failure, one step at a time. For example, creating a culture that mocks and demeans your clients is not a recipe for success, and closes you off from valuable feedback from those clients.

Being willing to accept feedback is only a first step though. You have to create a context in which employees are not afraid to give you that feedback, and in which they believe that providing feedback is worthwhile. If people believe they’ll be punished for being critical or regarded as “not a team player,” it’ll be hard to get them to provide feedback.

Next, you need to clearly define your goals and also define how you’ll know whether you’re succeeding or failing. Robotic Chromosomes had very fluid definitions of success, definitions that shifted regularly to avoid facing unpleasant results. It’s important to separate the evaluation of the feedback you’re getting from the testing to see if the criteria for that evaluation are valid. In fact, verifying the validity of your criteria should be done before you then evaluate your feedback: otherwise, it’s too easy to redefine success and give yourself a few more cuts. None of them seem all that bad at the time.

Step by step, over the course of several years, Robotic Chromosomes successfully created an environment where any negative feedback could be ignored because that feedback was always coming from idiots. Their competitors didn’t drive them out of business. They drove themselves out of business; their competitors simply put them out of their misery. How will you avoid the death of a thousand knives?

Stephen Balzac is an expert on leadership and organizational development. A consultant, author, and professional speaker, he is president of 7 Steps Ahead (www.7stepsahead.com), an organizational development firm focused on helping leaders grow their businesses. Steve is the author of “The 36-Hour Course in Organizational Development,” published by McGraw-Hill, and a contributing author to volume one of “Ethics and Game Design: Teaching Values Through Play.” Contact him at steve@7stepsahead.com.