The Business Sensei

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.

Yankee Swap Rorschach

This article was originally written a couple years ago, but always seems rather appropriate for the holiday season…

The holidays are the season for Yankee Swaps. Now, a Yankee Swap would seem to be a fairly simple and straightforward activity: each person either chooses a wrapped gift or steals an opened gift from someone else. This latter activity can, of course, trigger a chain reaction, but that’s part of the fun. At the end, everyone feels like they had at least some measure of control over the outcome. One would think it difficult, if not impossible, to mess up a Yankee Swap.

However, all things are possible. In this case, one company held a Yankee Swap with incredibly detailed and complicated rules which had as its most salient feature that no gifts were opened until the very end. In other words, the experience was transformed into the equivalent of a very slow grab bag: a long, frustrating, totally random process at the end of which people felt that they had no control over the outcome. Ironically, the most common complaint from employees at this company is that many of the rules are complex, time consuming, and leave them feeling like they have very little control over how they get their work done.

Now, a Yankee Swap is a pretty insignificant event, little more than an amusing party game. However, how a business goes about designing a small process says a lot about how it goes about designing larger, more significant processes: process design is strongly influenced by institutional habits and beliefs. With a small process, it’s easy to see the results of that belief in action because the entire event can be seen at one time; with larger processes, cause and effect may be separated by weeks or months, and the process is often so big that no one ever views it as a whole. The company ends up wondering why their results are poor, but can’t figure out the reasons. Those small processes can provide valuable insights into the company’s methodology and assumptions; recognizing consistent causes of small problems can enable you to avoid large ones. Ultimately, more important than improving one process is improving how the company designs all its processes.

In designing a process, it helps to clearly understand what you are trying to accomplish. Why did this particular company choose to redesign the Yankee Swap? Was there an actual problem that someone was trying to solve? Clearly, someone felt a need to come up with something, although their motives are impossible to fathom. As a result, they got a process that rather missed the point, but did end up reflective of the organization as a whole. However, it’s generally more successful to focus on results:

• Clearly define the objective. If the objective is to solve a problem, take the time to look at the symptoms and consider what they mean. When do they come up? Under what circumstances? Remember, the symptoms are not the problem, they’re just the symptoms. Generate a list of hypotheses and then test them to see if they lead to the observed symptoms. Solving the wrong problem will generally make things worse, not better.
• Describe what a successful outcome will look like. What will have changed? What behaviors will be different? Make this concrete. If success is, “people will have more fun,” how will you know? If the picture isn’t clear, identify the questions you need to answer to bring clarity. This may be an iterative process.
• Identify what you can change and what you can’t. You probably can’t change the economy, but you can change how you deal with it. Tom Watson Sr., founder of IBM, used the Great Depression as an opportunity to build up a highly trained, extremely loyal workforce and a stockpile of equipment. When WWII started, IBM was in an excellent position to capitalize on the reawakening economy. If everything falls into the “can’t change” category, you need to revisit your goal or problem formulation.
• Brainstorm possible solutions or approaches. Record ideas and do not evaluate any of them until you have a significant number of possibilities. Don’t worry if some ideas are silly or off-the-wall: innovative solutions come from the most unlikely sources.
• Will your solutions really get you where you want to go? Do research. Don’t rely on opinion and conjecture.
• Define your action steps.
• Execute and evaluate. Did it work? If not, check your problem formulation and try again.

If you’re not getting the results you want, what steps are you missing?

My Hovercraft is Full of Eels

As published in Corp! Magazine

“Is the product done?” a certain manager asked during a product review meeting.

“It is done,” replied the engineer building the product.

“Are there any problems?”

“There are problems.”

“What is the problem?”

“It does not work.”

“Why doesn’t it work?”

“It is not done.”

I will spare you the transcription of the subsequent half hour of this not particularly funny comedy routine. The manager and the engineer managed to perform this little dance of talking past one another without ever seeming to realize just how ludicrous it sounded to everyone else in the room. It was rather like Monty Python’s classic Hungarian-English phrasebook sketch, in which translations in either direction are random. In other words, the Hungarian phrase, “I would like to buy a ticket,” might be translated to the English phrase, “My hovercraft is full of eels.”

It was extremely funny when Monty Python performed it. As for the manager and the engineer, well, perhaps they just didn’t have the comedic timing of Python’s John Cleese and Graham Chapman.

As it happens, “my hovercraft is full of eels” moments come about far too often. What was unusual in this situation is that it involved only two people. Usually, considerably more people take part. Thus, instead of a not particularly amusing exchange between two people, there is an extremely frustrating exchange involving several people. The most common failure to communicate is the game of telephone: as the message passes along the line, it becomes increasingly distorted.

What I hear from teams over and over is, “We are communicating! We send email to everyone.” This is where the hovercraft starts to fill with eels. Broadcasting is not really communicating: effective business communications require a certain amount of back and forth, questioning and explaining, before everyone is on the same page.

Who talks to whom? When you send out an email, do questions come back to you? Or do people on the team quietly ask one another to explain what you meant? While it’s comforting to believe that every missive we send out is so carefully crafted as to be completely unambiguous, very few of us write that well. Of that select few, even fewer can do it all the time. Particularly in the early stages of a project, if there are no questions, then there are certainly problems.

When someone else asks a question, either via email or in a meeting, does everyone wait for you to respond? Even worse, does Bob only jump into a thread if Fred jumps in first? Who is Bob responding to at that point, you or Fred? Are you still addressing the main topic or is the hovercraft starting to become eel infested?

It can be extremely frustrating to ask, “Are there any questions?” and receive either dead silence or questions about something trivial. It can easily become tempting to assume that there are no questions and just race full speed ahead. However, until employees figure out how much each person understands about the project and how you will respond to apparently dumb questions, they will be cautious about what they ask. Their curiosity is as much about one another and about you as it is about the project. How that curiosity gets satisfied determines whether you have productive conversations or a hovercraft that is full of eels. In the former case, you get strong employee engagement; in the latter case, you don’t.

If you’ve been working with a team for some months, or longer, and people are still not asking questions then there are really only two possibilities: either your team is composed of professional mind-readers or you are about to find a room full of those pesky eels. No project is ever perfectly defined from the beginning. Questions and debate should be ongoing throughout the development or production cycle. A lack of questions tells you that there is a lack of trust between the team members and between the team members and you. When trust is lacking, so is engagement.

Now some good news: remedying that lack of trust isn’t all that complicated. It does, however, require a certain amount of persistence and patience.

Start by highlighting each person’s role and contribution to the project. Why are they there? What makes them uniquely qualified to fill the role they are in? Be specific and detailed. If you can’t clearly define their roles, you can rest assured that they can’t either.  Questions come when people are clear about their roles. Disengagement comes when people are not clear about their roles.

Prime the pump with questions. Demonstrate that you don’t have all the answers and that you need the help of the team to find them. Give each person a chance to play the expert while you ask the dumb questions. When you set the tone, the others will follow. Communications start with the person in charge.

Separate producing answers from evaluating answers. Collect up the possibilities and take a break before you start examining them and making decisions about them. Brainstorming without evaluating allows ideas to build upon one another and apparently unworkable ideas to spark other ideas. Pausing to examine each potential answer as it comes up kills that process.

Encourage different forms of brainstorming: some people are very analytical, some are intuitive, some generate ideas by cracking jokes, others pace, and so on. Choose a venue where people are comfortable and only step in if the creative juices start to run dry or tempers start to get short. In either case, that means you need to take a break.  Intense discussions are fine, heated discussions not so much.

Initially, you will have to make all the decisions. That’s fine, but don’t get too comfortable with it. As trust and engagement build, the team will want to become more involved in the decision making process. Invite them in: that demonstration of trust will further build engagement and foster effective communications. Effective communications, in turn, builds trust and engagement.

Having a hovercraft full of eels isn’t the real problem. The real problem is what a hovercraft full of eels tells you about the trust, engagement, and communications in your company.

Sir CEO and the Green Knight

As published in the CEO Refresher

One fine day, Arthur, the CEO rode forth upon his trusty steed. At his side hung his magic sword, Expostfacto. Expostfacto was widely considered to be a sword with a sharp legal mind. Arthur had made his fortune renting camels, which he parked every day in a large camel lot.

The sun was shining. The birds were singing. Suddenly, a dragon came roaring out of the sky, heading straight for Arthur. Flame billowed from the dragon’s mouth. Arthur drew his sword and with one swift blow, buried the dragon in a shower of subpoenas.

So it went, as Arthur spent many days enjoying the freedom of facing foes instead of sitting in stultifying board meetings, where, regretfully, it was seen as déclassé to employ the full might of Expostfacto upon annoying board members or customers. Against the power of Expostfacto, each foe swiftly fell under a massive pile of paperwork.

So it went until the day that Arthur encountered Maldive, the Green Knight.

“None shall pass!” quoth Maldive.

Many blows were exchanged, with Expostfacto screaming its legendary battle cry, “Lorem ipsum dolor sit amet,” a phrase which has become familiar to all internet users. Eventually, though, with a mighty blow, Arthur struck Maldive’s head from his shoulders. That should have ended the fight right then and there, but Maldive was an internet marketing scheme. He simply put his head back on and continued the fight. Eventually, Maldive knocked Expostfacto to one side, and placed the point of his sword at Arthur’s throat.

“I could slay you now,” said he. “But on your honor, I will spare you if you can answer this question: What does every engineer desire? Swear on Expostfacto that you will return in a month. If you have the answer, you will live. If not, you die.”

Ignoring Expostfacto’s muttered comments on possible loopholes and the inadvisability of signing anything, Arthur took the oath to return in a month with the answer or without it.

Arthur rode across the land searching for an answer to the question. He called together all his senior managers and asked them, to no avail. He even posted the question on Twitter and Facebook, leading to some very interesting answers and suggestions, particularly from certain ex-politicians in New York and California. However, since Maldive had asked about engineers, Arthur knew those answers couldn’t be true because an engineer wouldn’t know what to do with one even if he found someone willing to go on a date.

By day 29, things were looking quite bleak for Arthur. As he rode through the frozen lands of Nadir, he encountered a strange looking man. The strange thing was that the man did not appear to be in a rush. As a CEO, Arthur was quite used to people rushing around following his orders. He could always tell when things were getting done by how much people were rushing.

“Who are you?” asked Arthur, puzzled at the sight of someone so calm and relaxed.

“Merlin,” was the reply.

“Merlin the Magician?” asked Arthur.

“No, Merlin the consultant. What seems to be a problem?”

“Nothing, nothing at all,” said Arthur who, like most CEOs, became very cautious at the sight of a consultant.

“Good,” said Merlin, who turned back to whatever he was doing, completely ignoring Arthur. This was a very unusual experience for Arthur, who was not used to being ignored by anyone.

After several minutes, Arthur said, “Well, I guess I’ll be on my way.”

There was no response.

“I’m going now,” said Arthur.

There was no response.

Arthur started to ride away. There was still no response from Merlin, who seemed quite happy to let Arthur leave. Arthur had not ridden very far before he stopped and turned back.

“Do you know what every engineer wants?” asked Arthur.

“Why do you ask?” replied Merlin.

Before long, Arthur was telling Merlin exactly why he wanted to know and what would happen if he didn’t find out. I wasn’t long before a price was agreed upon and Arthur had his answer.

“That’s it?” exclaimed Arthur. Reflecting on it further, he said to himself thoughtfully, “But that’s what everyone wants!”

The next day Arthur showed up at the appointed time for his meeting with Maldive.

“Well?” said Maldive.

“Is it money?” said Arthur.

“No.”

“Is it a fast car?”

“No.”

“Sex?”

“We’re talking about engineers,” responded Maldive. “If that’s the best you can do, then prepare to die.”

“Wait,” said Arthur. “What engineers want is the freedom to make their own decisions.”

There was a long silence.

“I see you encountered Merlin,” growled Maldive. “Very well. But I doubt you will learn from this experience!”

And so Maldive turned and rode away.

Arthur, meanwhile, departed for home in a very thoughtful mood. What, indeed, did it really mean that people want to make their own decisions? Obviously, if he allowed all his employees to make their own decisions, surely chaos would result. No one would know what anyone else was doing! There would be no coordination between departments.

The moment Arthur returned to his office, he discovered the true meaning of chaos. Thousands of emails needing his attention; projects stalled because he hadn’t been around to tell people what to do; irate customers complaining about badly maintained camels (even camel renters have some expectations!); employees angry and frustrated because they couldn’t get anything done in his absence.

“I knew I should never have taken a vacation,” Arthur thought ruefully to himself. “This happens every time! It’s even worse than when I’m in a meeting or on a call.”

As Arthur dove into sorting out the confusion that came about from his taking his guiding hands off the corporate reins, he kept wondering how much worse it could really be if he allowed his employees to make their own decisions. Would it really be worse than what he dealt with every day? Arthur decided to experiment: instead of solving the problems in one department, he gave them limited decision making power. They could approve all expenditures, including customer returns or gifts, up to a fixed amount. After a couple of false starts as everyone got used to the new arrangements, Arthur found that that department was suddenly taking up much less of his time and energy. Moreover, the increased productivity of his employees more than made up for the occasional decisions that Arthur might have made differently. Indeed, simply by building some structure, Arthur found he could permit much more freedom and limit the downside of the occasional mistake, and create almost unlimited upside. At the same time, he also found that he could now focus much more on the strategic direction of his company instead of spending all his time putting out fires.

Best of all, as Arthur spread these changes throughout his company, he found that work didn’t come to a halt whenever he wasn’t available. Productivity increased because employees no longer needed to look busy in order to appear to have a purpose; instead, they could actually engage in purposeful activity. Sure, there were still moments of frustration, but on the whole, employees were happier and more motivated than he had ever seen them. Motion does not equal progress, Arthur realized. Progress equals progress.

In the end, the ability to give people the freedom to work as they would like to work comes from building the structure to enable them to know what to do. Without structure, there may a lot of motion, but very little progress. What will you do to change that?

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.” 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.

Who Betrays One Master

A nervous looking man in a suit slips furtively through the streets of an unnamed city. He comes to an office building and, checking to make sure that he isn’t being watched, slips inside. There, another man greets him.

“Do you have the plans?” the second man asks.

“Do you have the money?” replies the first.

Perhaps they haggle for a moment, but then the second man hands over the money and the first man hands over an envelope. The second man glances into the envelope.

“I see you kept your word.”

“You earned it,” replies the first man as he turns to leave.

“No,” says the second, as he pulls a gun and shoots the first man, “I bought it.”

“I betrayed my company for you! I proved my loyalty.” gasps the first man, as he falls to the floor.

The second man looks down at the body on the floor and says, “The man who betrays one master will assuredly betray another.”

If this scene sounds familiar, it probably is. Some variation of it appears in hundreds of movies, from James Bond to WWII action films to fantasy adventure. The trope is a simple one: a man betrays his country, company, organization, or teacher. The person to whom he sells out reaps the rewards, but never believes the traitor’s protestations of loyalty to his new masters. Eventually, it ends badly for the traitor.

Now, if this scenario were only a work of fiction, there would be little more to say. Unfortunately, the fictional part is the end: in real life the disloyal person is rewarded and given every opportunity to betray his new masters.

Read the rest in the Journal of Corporate Recruiting Leadership

Goof Gas Change

As published in The Business Enterprise

“We’re going to make this company great!”

As the villainous Boris Badenov spreads his goof gas, America’s most brilliant scientists are transformed into idiots. Even the smartest investigators are not immune. In desperation, the country turns to the one person, well, animal, who can save them: Bullwinkle J. Moose. Bullwinkle, it turns out, is immune to goof gas because he is, quite simply, simple. Bullwinkle cannot be affected by Boris’s goof gun because Bullwinkle has no intelligence to start with.

Moving from the world of cartoon satire to reality, we come to sunny California, and Clovis, the CEO of Clovis Systems. One fine day, Clovis announced a major restructuring.

“We are good,” he said, “but as a company, we need to be great.”

His particular choice of words was inspired by the title of the book that had inspired him to action: Jim Collin’s “Good to Great.”

The only problem with “Good to Great” is that you have to recognize the implicit assumption: that you’re starting from “good.” If you’re starting from “pathetic,” well, it doesn’t work quite so well. In fact, Clovis Systems was immune to “Good to Great,” for reasons eerily similar to why Bullwinkle Moose is immune to goof gas.

To make matters worse, Clovis’s approach to the whole concept of moving to greatness was lacking. “Great” is an impressive sounding word, but what does it mean? The answer depends on the person and the organization. By never defining what he meant, by never painting a picture of what “great” would mean, Clovis doomed his efforts from the start. But even if he had conveyed a clear destination, that wouldn’t have been enough.

Clovis made his announcement and then he didn’t follow through. If you want people to change, you need to do more than just tell them about the change.

To begin with, Clovis needed to help his employees recognize that some major changes were even necessary. From their perspective, things were pretty good. Having Clovis announce a major restructuring out of the blue looked to them like goof gas. All Clovis managed to do with his announcement was generate confusion, and confused people don’t move forward: they dig in their heels and try to stop moving until they can figure out what is going on. Therefore, Clovis should have started by talking with his employees about the disadvantages of the status quo. What were they unhappy about? What would they like to see done better? What was getting in the way of their doing their jobs?

Only by getting his employees thinking about what was wrong would they become open to the idea of change.

Once people start to think about change as desirable, the next step is to get them to think about it as possible and is something that they are capable of bringing about.

Trying to persuade them rarely works. The more you push, the more they resist. Instead, it’s time for a new set of questions. What would help you make the change? How have you made successful changes in the past? What resources do you have to help you make the change? What resources do you need? What strengths do you have that will make this work? What strengths does the company have?

Notice that every one of these questions focuses on the positive: on why the change is possible. If you focus on the negative, then all you’ll get is a litany of objections. While it’s important to identify and overcome obstacles, first you need to convince people that they are capable of overcoming those obstacles! Focus on success, not on failure.

Once Clovis had his team thinking of change as desirable and as something they could do, then it’s time to get concrete. If you wait too long, you’ll lose momentum, so it’s important to take advantage of the enthusiasm while it lasts. How will we make these changes? What do we need to do? How will we get started? How will we know we’ve started? How will we know we’re making progress?

Sometimes, if it’s hard to figure out how to start, it can help to forget about the how and focus purely on what you want to have happen. Get people talking and brainstorming and see how many different ideas you can generate. Do it right, and you’ll be amazed how many different approaches you’ll have.

Periodically, pause and summarize the progress you’re making. Echo it back to your employees. Let them see the small successes from the start. Each success builds momentum and keeps people believing that they can succeed. Recognize that people will make mistakes and that’s not a problem. Make it easy to recover and move on; you want employees to admit mistakes and correct them, not hide them out of fear of punishment.

Finally, keep everyone in the company moving forward together. When people move as a group, they support and encourage each other. When you leave people behind, the others stop to help their friends, or they insist on going back to get them. Either way, you lose forward momentum. If you already have strong teams, take advantage of their strength. If you don’t have strong teams, think of this as an opportunity to build team work. In either case, provide coaches, opportunities to practice the changes, room for experimentation, and vivid images of what the results will look like. Done right, not only will the mediocre teams become strong, but the strong teams will become excellent.

Clovis claimed he was serious about making his company great. However, he never did the work or committed the resources to make the change happen. In the end, he was breathing goof gas.

The Corporate Culture Conundrum

I get asked a lot about corporate culture. In this case, I ended up responding to a very detailed query at such length that I decided to include it here since I doubt the person interviewing me will be able to use all of what I wrote (I’m also posting this after the article comes out, so I don’t upstage anyone).

Let’s start by defining culture. At root, culture is nothing more than the residue of perceived success. In other words, it is the accumulated knowledge of how to be successful at a particular company and how the company is successful in the marketplace.

Why success and not failure? Simple. We tend to repeat the behaviors that appear to bring us success, and discontinue those that do not. Moreover, cultures based on failure simply do not survive. At some point, there have to be successes in order for the culture to remain viable.

I focus on perceived success because what really matters is not whether a behavior is really successful so much as our belief that it is successful. For example, in the 1990s, Nokia firmly believed that its success was due to its innovative management style. The reality was that they had a hot product, cell phones, in an exploding market. When the market saturated, their revenues dropped off along with every other cell phone provider in 2000. Today, Nokia is increasingly irrelevant. If everyone at the company had come to work wearing Groucho Glasses every day, their product would still have sold and they might very well have ascribed their success to their innovative dress code. The results would have been pretty much the same, although people might have been inspired to tell better jokes.

Because culture contains within it the memory of success, it is very hard to change. No one likes to change what’s working! What’s worse is that a behavior rarely succeeds all the time: when something doesn’t work, we ascribe the failure to “not trying hard enough” and resolve to do better. The resulting semi-randomness to the success produces a response similar to playing a slot machine: random success is highly addicting.

This phenomenon becomes particularly important when we realize that the business environment changes more rapidly than the culture. A once successful behavior gradually stops working. However, because it fades out slowly, intermittent successes along the way serve to make the behavior stronger and stronger even as its usefulness is decreasing. When it comes to not changing a behavior, it takes only the occasional success to make up for an awful lot of getting kicked upside the head.

This also means that there are two key aspects to culture: what we do and why we do it. Most organizations focus purely on the “what” and ignore the “why.” Even when an organization attempts to change culture, they almost always focus on what they are doing. Unfortunately, when you only change the what, you are changing the superficial. The underlying why will rapidly pull the new behavior back into alignment with the original behavior; although cosmetic changes may persist, the new “what” will be fundamentally identical to the old.

The “whys” of culture also interlock: there is rarely one reason for a particular behavior. As a result, attempting to change one “why” can also be quite difficult because a) it’s hard to identify it precisely, and b) the rest of the interlocking structure of beliefs pulls it back. It is quite possible for a CEO or senior management team to simply chop off a piece of a corporate culture, but it can be quite unpredictable what else they’ll lose: for example, when IBM dropped its traditional full-employment policy, they also lost a great deal of employee loyalty and their historic “IBM takes care of me and my family, I take care of IBM” employee mindset.

With that said, let me jump over to your questions:

1. How do you know when there's something wrong with your corporate culture (what are 2-3 signs), or how do you know if things need improving just a bit?

Something is “wrong” with a corporate culture when the culture can no longer obtain resources, that is to say clients and revenue, from its environment. The early symptoms can manifest in several ways before the revenue drop really hits. The most common is a persistent feeling of being stuck: more and more effort is expended for less and less success. Previously successful revenue generating behaviors are losing their effectiveness, but doing so in fits and starts.

Another common symptom is increasing defensiveness on the part of management: executives don’t want to hear why something isn’t working, and attempts to address problems are met with denial. At exactly the point where the executive team should be bringing in outside help, they become increasingly unwilling to do so. An outsider is far too likely to grind the sacred cows into hamburger. IBM’s decision to bring in Lou Gerstner in 1992 is an example of a company overcoming that fear of outsiders and actually addressing their problems.

A third symptom of culture problems is a persistent inability to make and keep decisions. When teams within the company, or the company as whole, continually revisits discussions and can’t seem to follow-through on goals, that’s a major warning sign that you need to take action.

2. Where do generational differences among staff and colleagues come into play?

Let’s start with the elephant in the living room: the Gen Y myth. This whole concept that Gen Y’ers are somehow less dedicated, less motivated, or less <insert here> than Gen X or Boomers is, quite simply, a myth. Indeed, the whole idea that the younger generation is less respectful, dedicated, hard-working, and so forth, than their elders is itself a cultural belief that goes back at least to Socrates.

What is different, however, is that Gen Y’s do not share the cultural belief that you graduate from college, work at one job for 40 years, and retire to enjoy your “golden years.” While this was, or at least appeared to be, a valid cultural belief at one time, it is no longer valid in the current environment and shows no signs of regaining validity. However, for those who grew up with it, it is very difficult to put it aside.

Within an organization, what matters first is not the generational differences but the degree of immersion in the culture of the organization. Younger employees are less deeply immersed in the culture; they’ve had less time to absorb it and to assume its values. Thus, they are more likely to propose ideas and approaches that older employees view as violating cultural values and hence are more likely to reject. Note, by the way, that I’m referring less to chronological age than to amount of time with the company. Since the older employees typically have more authority, younger employees are more likely to be frustrated. How they cope with that will, however, be strongly influenced by their generational cultural values: a Boomer or X’er might decide that if they stick around and pay their dues, they’ll get a voice in due time; a Gen Y’er is probably more likely to go somewhere else. One solution is not inherently better than another.

3. How do you cultivate a creative and collaborative team (what 2-3 three things can really build that team culture)?

Culture is whatever is seen as successful. If you want people to collaborate, reward collaboration. Sounds simple, but it just doesn’t happen. Companies focus on individual performance and individual reward. As a result, they get a bunch of individuals often competing for a limited pie. While it is important to acknowledge and reward individual contributions, that cannot be all that you reward and it should never be set up in a way that creates competition between team members.

4. It's all about innovation, how best to encourage creative brainstorming for service/product innovation (what works and what doesn't and why)?

There are four culture traps to avoid and four cultural beliefs to build. The four traps are:

Perfection — We must make the perfect mousetrap… which works until someone comes along with a cat.

Protection — We must not hurt our existing products. Pity our competitors don’t feel that way…

Identity — We’re an X not a Y. IBM was a serious business company in the 1980s. They didn’t “do games.” Now they’re heavily involved in serious gaming.

Creeping Box — We’re so far outside the box no one can catch us. Just ask Yahoo… Once you move outside the box, the box grows and suddenly you’re just one of the pack.

The cultural values to foster

Continuous education — Keep people learning. Don’t limit people to taking classes in their areas of expertise; rather encourage employees to study whatever interests them. Innovation comes from putting together apparently disparate pieces of information.

Making mistakes — How do you respond to mistakes? Innovation is a messy business. If mistakes are punished, no one will risk making them and innovation will falter. Thomas Edison famously said that he’d learned a thousand ways to not make a light bulb. Easy to say, hard to live.

Strategic breaks — Allow the breakthrough to happen. The “eureka” moment doesn’t happen when we’re exhausted from banging our head against the wall. It comes when we take a break and do something different. Learn how to take breaks strategically.

Patience — Don’t wait for a crisis to force your hand. Necessity may be the mother of invention, but waiting for the last minute to start innovating is the number one cause of premature death amongst new ideas.

5. How do intangibles like volunteerism, office greening, impact corporate culture?

Intangibles matter to the extent that they reflect the corporation’s values, beliefs, and aspirations. Volunteerism can be very important in a company that views itself as a good citizen of the community. However, to be effective, intangibles have to be worth the time and energy expended on them. If employees who volunteer their time end up being paid less or promoted less frequently than those who don’t volunteer their time, volunteerism will fade out. The behavior that is rewarded will become part of the culture, and the culture will attract those who believe in the values manifested through the behavior.

6. What are other intangibles that are important but corporations may not be keen about their importance?

How meetings are conducted, whether employees are permitted to work from home, how much freedom and autonomy versus direction employees are given, how mistakes are handled, how disagreements are managed, how permissible it is to question authority, are just a few of the intangibles that shape cultures.

7. How important is culture today and why?

Organizational culture is probably the most important most powerful force in any corporation. Because culture is the lessons of the past, it provides the template for how to behave in the future. Once a corporation loses sight of its culture, it’s only a matter of time before it slams into a brick wall.

8. Is your sense that most firms are focused on their culture, why or why not?

While many firms focus on their culture, they focus on the wrong aspects of it. Most companies focus purely on the “what,” those superficial artifacts that are easy to see but which have the least significance. It’s hard to focus on the “why.” Indeed, really delving into the “why” of your culture is rather like performing open heart surgery on yourself. In other words, you need the assistance of a trained outsider who is not immersed in your culture to see the elements you take for granted.

9. Any interesting, stats, surveys or other data about corporate culture?

Let me point you my book, “The 36-Hour Course in Organizational Development.” Chapter one is about culture and the entire book discusses how organizational development shapes and is shaped by culture.

10. If a company can make only one change in it's culture, how to determine what should be that priority?

The biggest priority is changing the belief that you can change only one thing… Seriously, culture change is not a precise, surgical operation. Sure, if you’re only after changing the “what,” you can pick one thing, but for anything non-trivial you have to go after the “why.” That requires taking the time to really understand what values and assumptions that are taken for granted are no longer valid, and then building up a new set of values and assumptions. Most culture change fails because it tries to focus too narrowly on one thing. Corporations go through a lot of pain and spend a lot of money only to experience a fleeting success before the culture reverts back to the way it was: when you seek to change only one thing, everything connected to that one thing acts to pull it back to its original form.

A Tale of Two Light Bulbs

As published in the CEO Refresher

Using the Force: What Every Exec Can Learn from Darth Vader

As published in the Worcester Business Journal

My 6-year-old son is seriously into Star Wars. As we were watching the movies recently, he turned to me and asked, “Why is Darth Vader such a mean leader?”

Coming from a kid who thinks the Sith are kind of cool, the question took me by surprise. On the other hand, it’s rather heartening to see that even a small child can recognize bad management. Of course, the real question is not what makes Darth Vader such a bad leader. After all, when you’re the Dark Lord of the Sith, you don’t really need a reason. More aptly, the question is: What does it take to be a good leader?

No Intimidation

First, we have to dispense with the primary weapon of the Sith: fear. Darth Vader rules through terror, but the fact is, you don’t need to have the power to choke people to death using the Force to create a climate of fear. Fear is very effective at getting people to move away from something. In the practice of Jujitsu, fear of injury is often quite sufficient to convince an attacker to dive headfirst into the ground or into the nearest wall. Some mistakes are a natural part of doing business. When people are shamed for making mistakes or threatened with loss of their jobs if they don’t measure up, they become less creative, less dedicated and errors are not corrected.

Team Spirit

To be a positive leader, the first step you need to take is to focus on affiliation. You might also think of it as team spirit. When people come together to form a team, the first thing they do is look for common ground. To really create affiliation, the leader needs to actively get to know his team members and encourage them to get to know one another.

Independence

Next is building autonomy. Perhaps counter-intuitively, autonomy is the result of having structure. Structure lets each team member know what the others are doing well enough to trust them when they aren’t visible. That trust is what permits autonomy.

Lack of structure is chaos. Too much structure is stifling. For example, when an employee comes up with a good idea and your response is to ignore them, that is too little structure. When you say, “Good idea! Here’s how we can make it better!” that’s too much structure. Appropriate structure is to say, “Great idea! How did you come up with it?”

Great Expectations

Competence is not just hiring competent people. It’s creating an atmosphere of competence. Nothing succeeds like the expectation of success.

Managers can motivate employees in one of two ways: you can focus on failures, and make dire predictions about what will happen if employees screw up; or you can focus on success, and remind the employee of the things they did well.

The keys to great leadership are: get away from fear, build affiliation, create structure to enable autonomy, and craft an atmosphere of competence.

The hard part is finding the right balance for your team and your company. Start slowly and let yourself accelerate as you learn to use these techniques effectively. You’ll soon be amazed at how fast you’re going.

Cut Big Problems Into Solvable Pieces and Get Moving

As published in Corp! Magazine

If a tree falls in the driveway and no one is awake to hear it, does it make a sound?