The Business Sensei

Outrunning the Ballmer

There’s an old story about two people walking through the woods. One of them, Pete Ahtear, is a track star. The other, that famous dessert maker Eaton Flanagan, may be an expert in the kitchen, but is not otherwise known for his speedy movement. As the two men are walking, they hear behind them the unmistakable sounds of a very hungry bear.

“That doesn’t sound good,” says Flanagan.

“That sounds like a hungry bear!” replies Ahtear. “Don’t you have a pot of honey or something you could toss at it to distract it?”

“Sorry, fresh out of honey.”

At that point, Pete Ahtear sits down, pulls his track shoes out of his backpack, and quickly puts them on.

“Even you can’t outrun a bear!” exclaims Flanagan.

“I don’t need to outrun the bear,” replies Ahtear with, it must be admitted, a somewhat smug tone to his voice. “I only need to outrun you.”

Indeed, were we to look at these two men, the truth of Ahtear’s statement could hardly be more obvious: one, a slender athlete in prime physical condition; the other, well, let us just say that Eaton Flanagan is a man whose skill at making desserts is exceeded only by his enjoyment of eating those desserts. Losing weight, given the time available, is not an option. Although quite possibly as large as that pursuing bear, regrettably Flanagan is sadly lacking in the sharp teeth and long claws department. On the scale of bears, Flanagan may be more closely likened to “Teddy” than “Grizzly.”

Speaking of bears, it’s getting closer.

Thinking quickly, Flanagan knocks Pete Ahtear to the ground, kicks him, and then uses the window of opportunity thereby created to tie Pete’s shoelaces together. Flanagan then lumbers off. He may not be able to outrun a bear, but he can now outrun Pete Ahtear. What follows is best left to the imagination.

As a further exercise of the imagination, consider how this philosophy might play out in a large corporation. What would outrunning the bear look like? What would such a competitive atmosphere do to employee cooperation and collaboration? How about problem solving and innovation?

Unfortunately, according to a number of articles about Microsoft, we don’t need to use our imaginations. Microsoft is one of a number of businesses that practice the fine art of “employee stacking.” In other words, employees are rated on a performance scale. The top performers are highly rewarded, while the bottom performers are… not. Sounds good, right? After all, won’t this push people to constantly push themselves to excel, and won’t it weed out the weakest performers?

Sadly, that’s not what’s happening at Microsoft. Excelling and taking on a risky project or trying something new are often mutually exclusive. Furthermore, what constitutes “excelling” can vary with comparison to others. In fact, as more than one Microsoft employee observed, they quickly learned to look like they were cooperating with their teammates, while actually withholding critical information or otherwise sabotaging their progress. In other words, when the performance review bear is approaching, all I really need to do is outrun you. That can happen in a great many ways: as Eaton Flanagan so ably demonstrated, not all of them involve actually being a better runner.

The side-effects of the Microsoft Way are far-reaching and not always immediately obvious. It goes well beyond employees sabotaging one another in order to make themselves look good. Hiring is effected: will you really hire someone more skilled than you are if that might push you down the rankings? Or will you prefer to hire people less skilled so that someone else will take the fall? What will that do to the overall level of employee skill? What about problem solving? When the goal is to make sure someone else trips and falls, are we going to fix the problem or merely fix blame? How about team work? Are you really going to ask to be on a team with other high performers?  It’s much safer to be surrounded by bear food than it is to work with someone who might be able to run faster than you. How badly will that reduce collaboration, creativity, innovation, and product quality?

Now, one might make the argument that Microsoft’s approach can’t be that bad. After all, they became the world’s largest software company and still dominate the PC market. Indeed, outgoing CEO Steve Ballmer was quoted in one article swearing by employee stacking. He thinks it’s wonderful.

It is possible that during the 1980s and 1990s, when Microsoft was surfing the great PC technology wave, that Microsoft’s review process really did produce high performance. Possible, but unlikely. Far more likely is that having a hot product in a rapidly growing market protects you from a lot of errors. When Microsoft’s stock was doubling practically every year, it was easy for them to constantly hire the best people. Most of those people were motivated to achieve not primarily because of the employee stacking system but because they were excited by their work, the company’s vision, and, yes, the stock options. So what if some of them become bear food? There are always more where they came from! Even if your teams are performing at only a fraction of what they are capable of, being in the right place with the right product can be enough for a long time.

Microsoft today is in an interesting position. As I’ve written about in several articles and books, they lost their way in 2000. While some people have argued that employee stacking is the reason for Microsoft’s malaise, it’s really only one factor. Granted, it is a very serious factor: at a time when Microsoft most needs to regain the innovative vision and energy of its early days, that pursuing bear means that few people indeed are going to be taking any chances.

But wait! Shouldn’t the creative vision come from the top? If that were to happen, wouldn’t that solve the problem? While vision may come from the top, leaders are more creative when they are surrounded by creative people. People staring at the ground, looking for an opportunity to trip up their colleagues, are not looking ahead and imagining the future. That’s an awful lot of psychological inertia for a leader to overcome.

In the end, when employees are forced to compete with one another, your productivity gains are brief and inevitably cost you far more than they are worth. It’s always easier to outrun your buddy than the bear, particularly when tripping your buddy is all it really takes.

At least the bear eats well.

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 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.

Recruiting With Confidence

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

Near the end of the award winning movie, Lord of the Rings: The Return of the King, Aragon leads his pitifully small army to the Black Gate of Mordor, realm of Sauron the Dark Lord. Sauron’s forces outnumber Aragorn’s by easily a hundred to one. On the surface, there appears to be little chance of success. Indeed, during the planning of the assault, Gimli utters the famous line: “Certainty of death, small chance of success… What are we waiting for?”

As those familiar with the story know, the attack is diversion. Its goal is to draw the attention of Sauron so that Frodo can destroy the Ring of Power. Aragorn, however, cannot let on that the attack is anything but an all-out assault on Sauron’s fortress. To fool Sauron, indeed, even to convince his soldiers to follow him, he must act and speak as though he has complete confidence that his badly outnumbered army can win. Aragon must not just be confident, he must be so confident that people will be inspired to follow him to almost certain death. That act of confidence is what makes it possible for Frodo to succeed and for Sauron to be defeated.

Small chance of success indeed, but a small chance is better than no chance at all. No chance at all is exactly what they had if they did nothing. It took immense confidence to seize that opportunity, but it worked in the end.

Okay, The Return of the King is fiction. What about reality? Whether in sports or business, confidence is key. Confident teams are more likely to win. Confident entrepreneurs are much more likely to get funding. Confident salesmen are more likely to sell. Confident engineers successfully solve more difficult problems than their less confident brethren. Confident CEOs are much more likely to build a successful business. To hire effectively requires confidence.

Why do people lack confidence in the system?

I heard a hiring manager comment that she would “Prefer not to hire anyone at all.”

Her company is growing, they are actively looking for people. At the same time, this manager who has been tasked with building up her team is openly telling candidates that if she has her way, not one of them will be hired. Indeed, given the choice, it’s hard to imagine candidates accepting an offer if they did get one, compared, say, to an offer from an enthusiastic and confident employer.
While making the observation that this woman lacked confidence might be something of an understatement, it is only a start. Confidence begets confidence, just as lack of confidence begets lack of confidence. This manager was demonstrating a lack of confidence in herself, her company, their hiring process, and in the candidates. That, in turn, makes it extremely difficult to attract top people: if the hiring manager doesn’t seem confident, what does that tell the candidate about the company? Those who can get other offers will go elsewhere, leaving this manager to choose less qualified people, further confirming her lack of confidence! Therefore, it is important, and far more useful, to understand why she lacked confidence. Only then is it possible to do something to increase her confidence and make it possible for her to hire effectively.

Indeed, this manager cited one major reason for her unwillingness to hire. No surprise, it was the economy. Despite what she’d been told to do by her boss, she fundamentally did not want to hire anyone because she was terrified that the economic recovery would fail and the company would go under. Listening to the news of that day, it’s easy to understand why she felt that way: The fact is, it is hard to listen to the news without feeling discouraged. It’s even worse in a world where the news is always on, as close as our computer or cell phone. When we hear the same five dire forecasts over and over, it reinforces the message of doom and gloom, even when it’s the same news story being repeated five times! Being tough and bucking up only works for so long. Eventually, even the toughest will get tired: a steady diet of discouraging words can undermine anyone’s confidence in a variety of subtle or not-so-subtle ways.

In the end, though, while this woman’s lack of confidence may have been made obvious by the economy of the time, further investigation revealed the economy wasn’t the actual cause. The actual cause was both more immediate and less obvious: she fundamentally didn’t trust the hiring process her company used. If you don’t trust the process, it’s hard to have confidence in it, and the more vulnerable you are to surrounding influences such as the news. In a strong economy, her lack of trust could easily go unnoticed simply because the positive news flow would allay her fears; without the positive backdrop, however, her fear and her lack of confidence in the system were fully exposed. Sadly, this lack of confidence appears to be the case in a great many different companies.

Now, lest I give the wrong impression here, this lack of confidence is not necessarily unjustified. In fact, when people don’t have confidence in the system, there is often a reason. Let’s take a look now at those reasons and what can be done to build confidence so that you can find the best people and convince them to come work at your company. Believing that they’ll come to you because they’re desperate is not a good strategy! In the best case, you get a lot of desperate people who will likely have second thoughts as soon as they don’t feel quite so desperate any more. If you don’t mind being a way-station for those seeking better jobs, that’s fine. But if you’d like to be a destination for the best, that requires having confidence your system.

Balzac combines stories of jujitsu, wheat, gorillas, and the Lord of the Rings with very practical advice and hands-on exercises aimed at anyone who cares about management, leadership, and culture.

Todd Raphael
Editor-in-Chief
ERE Media

http://www.ere.net

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.

If You Want Competence, Ignite Passion

I recently read Lou Adler’s interesting article on why not to hire competent people.

He has some good points, but he also misses a few key points as well.

He talks about finding out if the candidate has been excited in the past by work similar to what you’re hiring them for. While that’s one thing to look at, it’s really fairly limited. Gauging similarities between jobs is actually surprisingly difficult: apparent similarity, like beauty, is often skin deep, while apparently different jobs often turn out to be surprisingly similar.

It’s a far better approach to identify someone’s passions. What gets them excited? Don’t stop there, however! Now you need to find out why that gets them excited. Does your job offer similar opportunities?

For example, someone passionate about chess might be passionate because they love logical thought, challenge, strategic thinking, and the opportunity to outwit an opponent. Does your company provide some or all of those opportunities? If so, you’re already on the right track to engaging their passions.

Another way to gauge someone’s excitement is through your own excitement: are you excited by the work your company is doing and are you willing to show that excitement? How do they respond? Is there a spark?

If you are doing your best imitation of the PC from those old Mac vs. PC commercials, don’t be too terribly surprised if the person across the table from you responds accordingly. Far too often, we ignore highly competent people who are great potential hires because we are doing the equivalent of calling sushi “cold, dead fish” and then wondering why they aren’t excited.

Leaving motivation aside for a moment, how are we even judging competence? How do you know that works? Have you really identified what skills are needed on the job? Technical skills are all well and good, but if you don’t focus on the much larger constellation of “soft” skills, you’re going to have problems: is this person skilled at communicating? How about team work? Are you asking them to describe how they’ve helped their teams work together in the past?

We like to focus on technical skills because we think they’re easier to assess than the softer skills. Unfortunately, even that depends on how you go about doing the assessment. Most assessments seem to be as much about making the interviewer feel good as actually measuring competence or end up defining competence much too narrowly.

A real challenge here is that most interviewers are convinced that they can tell a great deal about a candidate from a very short interview. Why is this a challenge? Because most interviewers are wrong. That’s not what they’ve trained to do; indeed, the candidate probably has far more experience being interviewed than the average interviewer has in conducting the interview.

Perhaps the real answer here is to focus on getting reasonably competent people in the door and building an environment that makes them more competent and ignites their passions, instead of believing we can predict it all at the start.

Organizational Psychology for Managers is phenomenal. Just as his talks at conferences are captivating to his audience, Steve’s book will captivate his readers. In my opinion, this book should be required reading in MBA programs, military leadership courses, and needs to be on the bookshelf of every Fortune 1000 VP of Human Resources. Steve Balzac is the 21st century’s Tom Peters.

CMG Director of Publications

The Paradox of Perfection

This article was originally published in American Business Magazine.

“I’ve missed more than 9,000 shots in my career; I’ve lost almost 300 games; 26 times I’ve been trusted to take the game-winning shot— and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”– Michael Jordan

Ask practically any hiring manager if they’d hire someone who never considers alternatives, who refuses to take decisive action, who has never challenged themselves, and the answer will be, “No.”

The odd thing is, however, that those same managers are hiring exactly those people they said they’d never hire. Of course, they say they’re hiring people with strong track records, who don’t have a history of failure, who have never been responsible for something going wrong; the people, in short, with the perfect job histories.

But what they don’t do is take the time to understand just why that person looks so perfect. After all, isn’t it always better to hire someone who has never failed than to hire someone whose background includes unsuccessful projects?

Imagine if Michael Jordan’s coach had said, back when he first missed a game winning shot, “Hey Mikey, you missed that shot! You’re done.”

Far too often, the people who look so perfect are only perfect because they’ve never allowed themselves to attempt anything that would damage their image of perfection. They carefully choose their projects to make sure they’ll be successful, and they never challenge themselves or expose themselves to risk. Unfortunately, when something does go wrong, they also have no ability to cope.

Twelve years ago, I worked with someone who was telling me how he failed his black belt test in the martial art he studied. “It was the first test I’d ever failed,” he told me. “It was devastating.”

“How long ago did that happen?” I asked him.

“Two years.”

“So I assume you passed the second time.”

“What second time?” he asked.

After two years, his failure was still so overwhelming that he hadn’t gotten back on that metaphorical horse. As an engineer, he was not easy to work with because he had to be right all the time.

I was once called in to work with a manager who had a stellar track record, until something went wrong. He couldn’t cope. He kept telling me, “I’m not the sort of manager who allows something like that to happen.”

The resulting disconnect between his (mis)perception of himself and reality was overwhelming. The fellow was so stressed out that he couldn’t sleep, couldn’t eat and couldn’t think straight. The fact that he had never failed meant that he had no resilience. The mere possibility of failure was enough to send him into panic and make the odds of failure more likely. Yes, we did turn things around, and he’s a much more capable manager now than he ever was before.

When you want someone to embark on a risky project or take bold, decisive action, don’t look to the person with the perfect record who has never failed. If they haven’t taken risks or been bold before, why would they change just for you? Clearly what they’ve been doing worked for them—it got them praise, promotions and financial rewards.

Paradoxically, perhaps that person with the checkered past is exactly who you’re looking for. The person who misses that game-winning shot one day, improves their skills, and nails it the next time is the real winner. Success is about trying over and over and accepting the bobbles along the way. Unfortunately, the tendency on the part of many people is to view a mistake as total failure. This deprives them, and their managers, of the chance to improve and seek greater challenges.

Who would you rather trust when the stakes are high? The person with the perfect record, or the one who is the equivalent of Michael Jordan?

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

Common Hiring Mistakes

When I spoke at ERE Expo, Todd Raphael, editor of the Journal of Corporate Recruiting Leadership, interviewed me on why companies make hiring mistakes. The interview is now up on YouTube: http://www.youtube.com/watch?v=GUFbWww7Pic.

The Hydrangea Conundrum

As published in The CEO Refresher.

Storming the Black Gate

Near the end of the award winning movie, Lord of the Rings: The Return of the King, Aragon leads his pitifully small army to the Black Gate of Mordor, realm of Sauron the Dark Lord. Sauron’s forces outnumber Aragorn’s by easily a hundred to one. On the surface, there appears to be little chance of success. Indeed, during the planning of the assault, Gimli utters the famous line: “Certainty of death, small chance of success… What are we waiting for?”

As those familiar with the story know, the attack is diversion. Its goal is to draw the attention of Sauron so that Frodo can destroy the Ring of Power. Aragorn, however, cannot let on that the attack is anything but an all-out assault on Sauron’s fortress. To fool Sauron, indeed, even to convince his soldiers to follow him, he must act and speak as though he has complete confidence that his badly outnumbered army can win. Aragon must not just be confident, he must be so confident that people will be inspired to follow him to almost certain death. That act of confidence is what makes it possible for Frodo to succeed and for Sauron to be defeated.

Read the rest in the Journal of Corporate Recruiting Leadership

Recruit Confidently

As published in ERE.Net

Recently, I heard a hiring manager comment that she would “Prefer not to hire anyone at all.”

Her company is growing. They are actively looking for people. At the same time, this manager who has been tasked with building up her team is openly telling candidates that if she has her way, not one of them will be hired. Indeed, given the choice, it’s hard to imagine candidates accepting an offer if they did get one, compared, say, to an offer from an enthusiastic and confident employer.

While making the observation that this woman lacked confidence might be something of an understatement, it is only a start.

Confidence begets confidence, just as lack of confidence begets lack of confidence. This manager was demonstrating a lack of confidence in herself, her company, its hiring process, and in the candidates. That, in turn, makes it extremely difficult to attract top people: if the hiring manager doesn’t seem confident, what does that tell the candidate about the company?

While most businesses viewed the Great Depression as a time to hunker down, cut everyone possible from the payroll, and hide under the bed until things got better, one CEO took a different perspective. He saw the Depression as an opportunity to find the best people, build their loyalty and commitment, and stockpile equipment and material against the day the economy turned. Tom Watson’s confidence that things would get better propelled IBM into becoming the global powerhouse it remains to this day.

In another example, a recent news report featured an economist claiming that hyper-inflation and total social collapse is just around the corner. Is that likely? I’m no economist, but I have to wonder how many people today remember Dow 36,000? James Glassman’s book was published at the height of the Internet boom: in October 1999, just a few short months before the market crashed in March 2000. The predictions of a rosy future stretching into forever were loudest, and most believable, at the top; what does that say about the news today?

In the end, though, while this woman’s lack of confidence may have been made obvious by the economy, and helping her reframe the news was an important step, further investigation revealed the economy wasn’t the actual cause. The actual cause was both more immediate and less obvious: she fundamentally didn’t trust the hiring process her company used. If you don’t trust the process, it’s hard to have confidence in it, and the more vulnerable you are to surrounding influences such as the news. In a strong economy, her lack of trust could easily go unnoticed simply because the positive news flow would allay her fears; without the positive backdrop, however, her fear and her lack of confidence in the system were fully exposed. Sadly, this lack of confidence appears to be the case in a great many different companies.

It’s a topic I write about in the next Journal of Corporate Recruiting Leadership. In that article, I specifically get into some ways to address the problem. While it’s certainly true that we don’t control the economy, we can control how we react to it. We control as well how well our recruiting systems are designed and how well trained we are in using different parts of it. Understanding what we control and how to exercise that control well is the key to true confidence.

Hire Slow And Fire… Slower?

How often have you heard someone from a company say, “We hire slow and fire fast?”

I’ve heard this line so often that it sounds sort of a like a mantra or one of those wise sayings that are taken for granted but are generally wrong: “I invest for the long term,” or “There is no room for emotions in the work place,” or “The Red Sox will never win.”

This is not to say that it’s always wrong to “hire slow.” However, it’s important to understand the different ways that a company can hire slow. Some of them make more sense than others. What, fundamentally, does it mean to hire slow? For that matter, what does it mean to “fire fast?”

Read the rest at the Journal of Corporate Recruiting Leadership