The Business Sensei

Twinkie, twinkie, little star…

The news that Hostess Brands (aka Interstate Bakeries), maker of the legendary Twinkie, is closing its doors after 80 some years is all the rage these days.

Along with that news is the argument about why they are closing their doors. There are so many claims and counter-claims running around that it’s starting to sound like the beginning of a bad detective movie. Hostess is dead! Whodunit?

Some people are claiming that union demands killed Hostess, others that tripling the CEO’s pay did the job. More than likely, what really did the job was the death of a thousand knives: a series of cascading errors that put them in the position where their demise was inevitable; it was just a question of what specific event finished them off.

Of course, to really understand what happened, we then have to ask the question, “How did the cascade get started? What happened, or didn’t happen, what changed or didn’t change, to make the vulnerable in the first place?”

Here we can see the power of organizational culture at work. Specifically, we can see what happens when two cultures that were tightly aligned drift apart from one other.

When Hostess was founded in 1930, it was a product of the culture of the time: created by people living and working in that time period. The foods it sold were the foods of the day, the things people wanted. Over the years, Hostess became very successful selling twinkies, Wonder Bread, and the like. They weren’t just the best thing since sliced bread, they were the sliced bread!

Culture, of course, is the residue of success: the accumulated lessons an organization learns over time about how to successfully navigate the world. Those lessons can be hard to unlearn. Sometimes bankruptcy will do it, but not always. In the case of Hostess, they went bankrupt in 2004 and spent the next five years in Chapter 11 bankruptcy protection. When they emerged from Chapter 11 in 2009, however, they had apparently failed to learn some lessons, specifically:

1. Sliced bread was no longer quite the rage it had been in 1930.Indeed, today artisan breads, local breads, and the like are extremely popular. Wonder bread is no longer the first choice of many parents.

2. The dessert market changed. Twinkies are not so cool or fun anymore. They are the object of jokes and experiments to see how long before the go bad, or how much oil can one absorb, and so forth. They are not a school lunch staple as they were even 30 or 40 years ago. Same for Hostess cupcakes, ding-dongs, and the rest.

Are there additional factors? Sure. Supposedly Hostess never really modernized its distribution system and it’s not at all clear how much their internal management ever adopted modern goal-setting and motivational techniques. Fundamentally, though, what killed Hostess is the same thing that almost killed IBM in 1992: their market changed; their culture did not. Unlike IBM, Hostess didn’t have the same willingness to confront unpleasant realities and make necessary changes soon enough.

The rest is merely detail.

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?

Flawed Execution — Don’t Lose Your Head Over It

I’m pleased to announce that my next book, “Organizational Psychology for Managers,” will be published by Springer in 2013.

This article was originally published in Corp! Magazine.

There’s an old joke about a lawyer, a priest, and an engineer being sent to the guillotine during the French Revolution.

The lawyer goes first. He kneels, and the blade comes swishing down. Suddenly, it stops just before it hits his neck. The crowd gasps. After a hurried discussion, the executioner announces that since the lawyer survived, it wouldn’t be legal to try again. He’s released.

The priest goes next. Once again, the blade stops just before it severs his head. The executioner declares that clearly it was the divine hand of providence at work, and so the priest is released.

Now it’s the engineer’s turn. Just as he’s about to kneel down, he looked up at the blade and says, “Hey, I see the problem.”

Leaving the engineer aside for the moment, what we have here is a classic case of flawed execution. It’s a fairly common, though less dramatic, event in many businesses. Unlike this particular example of flawed execution, however, when it happens in a business heads often end up rolling.

This, of course, is exactly the problem.

Now, it may seem like flawed execution is a bad thing. In fact, though, what is more important than the execution itself is how the company responds to its success or failure. This is particularly true in organizations that claim to promote innovation or organizational learning.

When a leader takes the view that mistakes mean that heads will role, that sends a very clear message to the rest of the organization: mistakes are something terrible. They are to be avoided at all costs. In other words, always play it safe because if you make a mistake, you’re in trouble. It also means never experiment because your experiment might not work out. In fact, most experiments don’t work; we conduct them to find out what will work.

To put this in perspective, at one software company the engineers on one project had to make some decisions about how users would interact with the program. They had several possible designs, but could not choose between them. Eventually, they made the logical decision to pick one and conduct some user tests. The first few rounds of tests did not go well, but eventually they hit on a design that the users liked. The response from the department head was, “That’s great, but why didn’t you get it right the first time? Your errors cost us a lot of time and money.”

On the next product cycle, the engineers simply picked one alternative and when it didn’t work blamed marketing for not providing them sufficient information. Naturally, marketing responded by blaming engineering, and so it went. Once heads start to roll, the most important thing is to make sure that someone else’s head is the one that goes. This rapidly undermines trust and teamwork.

Conversely, in highly innovative organizations, mistakes are accepted as a necessary part of the game. Indeed, these organizations try to avoid simply jumping to an answer. They recognize, as the engineer in our little joke did not, that jumping to a solution can have fatal consequences. Palm Computing, for example, conducted numerous user tests before releasing the first Palm Pilot. Many of those tests simply involved people walking around with pieces of wood in order to find the right form factor for the Palm devices.

The trick with both innovation and organizational learning is recognizing that you often don’t exactly know what you’re going to build or learn. Learning in particular is a product of making mistakes; when you don’t allow mistakes, you also don’t allow learning. As for innovation, well, it’s very hard to pick the right answer when you’re exploring unknown territory. Rather, getting to a right answer is a process of exploration and experimentation. That process of collaborating with your team, sharing successes and failures along the way, is what truly builds a strong and resilient team, as well as high quality products and services.

In the end, it’s the flawed execution that really gets you what you want, while jumping to the apparently correct answer too quickly can be fatal. No joke.

Stephen Balzac is an expert on leadership and organizational development. He is president of 7 Steps Ahead, an organizational development firm focused on helping businesses get unstuck, and the author of “The 36-Hour Course in Organizational Development.” Contact him at steve@7stepsahead.com.

Following Prince Charming

“Don’t worry, I’ve got a solution to that.”

I was sitting across a table from Joe. We had just finished dinner and he was trying to convince me to join his new company. I had some doubts about the feasibility of what he was proposing.

“I really know this area,” he continued. “And I’ve already worked out several possible solutions. It won’t bottleneck the project.”

You couldn’t fault his confidence. He was calm, focused, and intent. He spoke with a definite air of authority. He knew how to start companies and he knew he knew it. A lack of self-esteem was not one of his problems.

Over the next two years, some odd events took place.

Although we had regular code reviews, somehow Joe’s code was never looked at. It’s not that he refused or said, “I’m the CEO, no one looks at my code.” Rather, he confidently reminded us of his expertise, and was always very willing to help others, or at least have the code review time be focused on more junior engineers.

Joe finally decided that writing code was taking away from his ability to do other CEO-like things. When we eventually got a look at his code, it was rather like a software house of horrors. He did things to software that should never be done. We now knew why we were seeing those weird bugs and mysterious problems.

As we came closer and closer to our ship date, we realized that one of the earliest problems had never been solved. Joe was working on that. He was always so calm, so confident, he projected such authority, that we never doubted that he’d deliver.

He didn’t.

Why hadn’t we pushed sooner for a solution? In hindsight, it seems like the obvious thing to have done. Yet, it never happened. Joe didn’t share information, especially information that he thought was valuable to him. He simply didn’t share so smoothly and with such charm that no one ever noticed.

The company folded. Joe, however, did extremely well for himself.

Joe looked like a leader. He acted the way leaders are supposed to act: calm, confident, authoritative. He was not, however, a particularly good leader. But he was very good at keeping anyone from realizing that until it was much too late.

Lest you think that this is a phenomenon reserved to small tech startups, let us consider a certain giant pharmaceutical company. In 2001, Pfizer’s board appointed Hank McKinnell CEO. McKinnell was widely perceived to be strong, confident, and charming, if sometimes abrasive. Rather than the last being seen as a negative, it was seen as strength: He was someone who could get things done. McKinnell had no lack of self-esteem. Karen Katen, the other candidate for CEO, was seen as quiet, but effective. However, she lacked, at least in the board’s estimation, the necessary authority and toughness to get things done.

Five years later, McKinnell’s confident, strong, charming, occasionally abrasive, style of leadership led Pfizer into serious financial trouble. The board forced McKinnell into retirement. However, don’t be too quick to offer Hank a hanky. He did quite well for himself. He did so well for himself, in fact, that Pfizer was hit with several shareholder lawsuits over the size of McKinnell’s compensation package.

A New Jersey woman once learned that her next door neighbor had been arrested as a spy. She famously commented that, “She couldn’t be a spy. Just look what she did with the hydrangeas.”

The pretty colors of the hydrangeas are a superb way of distracting people if you’re a spy. The moral equivalent of those colors can be a great distraction when you’re not exactly the best leader around. If you can look enough like a leader, you can often win the rewards that go with leadership and dodge the consequences of failure. Sometimes, you can dodge the consequences all the way to the top. The company, however, doesn’t get to dodge the consequences of that poor leadership: just ask Pfizer. Following Prince Charming can be extremely expensive for the organization.

So how do you tell the difference between a real leader and Prince Charming? It’s not enough to just look at results. Joe and Hank had a history of results. It’s just that when it really counted, their companies suffered while they profited. So, you really have to ask yourself some important questions:

Are Prince Charming’s methods sustainable? What is the burnout or turnover rate in his team, division, or department? The higher they are, the more likely you’re dealing with Charming.

What happens to his team, department, or division after he’s promoted or moves somewhere else? Does productivity increase? If it does, you should be asking why it wasn’t higher when Charming was in charge.

How does information move through Charming’s department? Is there a great deal of open discussion, a sharing of information, perspectives, and knowledge? Does the leader seek out input and invite people to challenge his ideas? If so, you have a real leader. If not, Prince Charming is in charge and odds are he’s so full of himself that he’s not going to listen to anything he doesn’t want to hear. Quite simply, a good leader facilitates discussion by asking questions and periodically summarizing the discussion. Prince Charming is too full of himself to do that. He’s only interested in what he has to say.

When you follow a real leader, the entire company benefits. When you follow Prince Charming only one person lives happily ever after. What steps do you have in place to make sure you have the real leaders in your company?

Spotting the Gordian Knot

Fans of cycling’s Tour de France might recognize the name of Johann Bruyneel, the coach who helped Lance Armstrong  become the first man to win the Tour seven times in a row. Lance Armstrong is undoubtedly one of the best cyclists alive today. What can a coach offer him?

Simple. Lance can’t see the back of his own head. Johann can.

In other words, Johann provides external feedback. He is the person who can step back and see the big picture and provide Lance Armstrong with knowledgeable, expert feedback. That feedback, in turn, enables Lance to improve his cycling skills and consider strategies that he might never have imagined on his own. Johann’s not magic of course; as the 2010 Tour demonstrated, even Lance can be defeated by age and bad luck.

Nonetheless, the advantage of having that person showing you the back of your own head is invaluable. As part of a management training exercise, I provided participants with a variety of items and each person had to obtain various different items to accomplish their goals. As expected, the participants immediately started trading with one another.

Where events became interesting, though, was when they started to notice that no one had certain items, or at least would not admit to having them. The people who needed the “missing” items became convinced that other people were holding out on them. They then responded by actually holding out on other people, until eventually no one would trade with anyone else. Before long, the group became paralyzed; they were unable to accomplish the relatively simple task they had been given.

What made this scenario particularly intriguing, though, was that the group was so focused on its initial assumption about how to solve the problem that they were apparently incapable of considering alternatives. For example, the person who needed an apple could have obtained one from the cafeteria. The person who needed leaves from a tree could have walked outside and picked some off one of the many trees visible through the windows, and so on.

Stories of Alexander the Great tell of his being confronted with the Gordian knot, a knot so complex that it could not be untied. Alexander solved the problem by slicing it in two with his sword. When I pointed out to the participants in my exercise some of the alternative paths to solving their problems, their reaction was comparable to what I imagine was the reaction of those who saw Alexander slice the knot: stunned silence, followed by head slapping and cries of “Why didn’t I think of that?!”

To be fair, the inhabitants of ancient Telmissus probably didn’t do Homer Simpson dope slaps, but I suspect they had a very recognizable equivalent!

The key point, though, is that the people actually involved in the exercise were no more able to see the alternate solutions than Alexander’s contemporaries were capable of thinking of cutting through the knot. Confronted with a knotty problem, as it were, they locked into one approach to solving that problem. It took an outsider to consider something different.

In sports, locking into a strategy can be devastating. One top US saber fencer gained quite a reputation when he launched a series of attacks, and promptly got hit. So he did it again, and got hit. He lost the match because he couldn’t see the back of his own head: he couldn’t break out the mindset that the particular strategy he was using simply wasn’t working against that particular opponent. He was so sure that it would eventually start working that he refused to consider anything else.

In a business environment, this sort of blindness can be even more expensive. At one company, a belief about how client training should be conducted was costing the company business. They were losing engagements left and right. Their attempts to reverse the losses were focused on sales campaigns and aggressive marketing. Even though the company was filled with experts in the business, no one could see the real problem; instead, they were locked into an ineffective delivery strategy. It wasn’t until an outsider looked at what they were doing and informed them that the fundamental problem was that the training was ineffective that things changed. Quite simply, how they taught wasn’t working: clients felt that they were wasting their time and money and not learning anything. Once they understood what was actually going on, they were able to cut their particular Gordian knot and business picked up rapidly thereafter.

So how do you see the back of your own head? One way is to find someone who isn’t steeped in the assumptions of the organization, someone who will ask the “stupid” questions because they don’t know what to take for granted. Another method is to spend some time looking at what you are doing and brainstorm alternate methods of accomplishing each task. You do this whether or not the task is already completed or on going. The key is to view how you’re doing things as merely one suggested method instead of as holy writ. Best of all, of course, is to use both methods.

Once you have the perspective of the back of your own head, it’s amazing how easy it is to spot, and cut, that Gordian knot!

The Team Driver Paradox

Originally published in Corp! Magazine.

Imagine for a moment that you’re taking a ride on the subway, or, as we say here in Boston, the “T.” Somewhere up in that front car is a driver. That person sits in a little chamber and drives the train along the tracks. Someone not familiar with the T might assume that the driver isn’t doing much at all: after all, the trains are traveling through tunnels most of the time and along tracks all of the time. Yet, when an accident occurs due to a driver texting, it becomes painfully clear that the driver is doing a great deal. It just may not be obvious.

Driving a car is oddly similar to the train: When my children were very young, they didn’t understand just how much I was doing as the driver. They couldn’t understand why I couldn’t pick up a dropped toy or why I was tired after a long drive. Adults who don’t drive have more of an appreciation of the concentration involved than do children, but still tend to grossly under- or overestimate it. Indeed, if you were driving along a large, empty Midwestern highway, someone unfamiliar with driving might well assume that you were doing nothing at all, just sitting there as the car effortlessly zoomed down that long, straight road. The actions and almost constant adjustments you make are so small, so apparently insignificant, as to easily escape notice, unless, of course, you didn’t do them. Then everyone would notice!

In a very odd way, a successful team is much like that car, and the leader of the team much like the driver. In the best performing teams, it often appears that the leader isn’t doing much of anything. In fact, it often seems that the leader could be removed and the team would go on without a problem. That’s true, in the same way that the car would continue down the highway if you removed the driver and simply put a brick on the accelerator. If you decide to try that, please let me know so that I can be somewhere far away!

I have had CEOs, vice presidents, directors, and other executives and senior managers tell me that their company has leaderless teams. They even insist that their teams are performing at a very high level. Despite that, earnings are not where they could be, products are shipping late, and there is a very high degree of failure work. The teams, when looked at more closely by an outsider, turn out to be more along the lines of disorganized hordes. There is little sense of team spirit or community, rather each person is out for him or herself. Goals are vague, often to the point of uselessness. That’s OK, though, because everyone is operating on the basis that “there’s never time to do it right, but always time to do it over.” In one particularly egregious example, the following conversation occurred at product review meeting I attended:

Manager: “Is the feature complete?”

Engineer: “Yes.”

Manager: “Does it work?”

Engineer: “There are some bugs.”

Manager: “What’s wrong with it?”

Engineer: “The code’s not written.”

Luckily, I had already swallowed my coffee!

The most amazing part of the whole meeting is that no one seemed to find this particularly odd. It was simply seen as a normal part of how business was conducted. If that guy got fired, oh well, someone else would take his place. Without someone to lead, the team really never figured out which way to go and no one really cared.

That said, there are certainly times when it appears that a team is functioning just fine without a leader. You may even have been lucky enough to have seen such a team in action. Like the driver of the car, there’s a leader there. He or she just may not be obvious, until you take them away. That team and that leader did not start out working at that level. Rather, like any new driver, there were undoubtedly some bumps and wrong turns along the way. Even for experienced drivers, it can take a while to get used to a new car, to learn all of its idiosyncrasies and quirks. The apparently leaderless team is the product of a lot of hard work. It’s also not really leadless; it just appears that way.

Like the driver of the car, the apparently insignificant, or even invisible, adjustments made by that leader are working to keep the team from going too fast and burning out, from going off the road, or even from smashing into an unexpected obstacle. The results are only obvious when the leader is removed. By then, of course, it’s often too late.

If you truly think you have a leaderless team, look again. The leader may not be obvious, but he or she is there. And if you want to have a leaderless team, be patient. You can’t start that way and you won’t get there without some bumps along the road!

Help Star Performers Ramp up the Whole Team

Originally published in Corp! Magazine.

Do basketball players have hot hands? A hot hand in basketball is when a player is shooting better than normal. A star player with a hot hand is, therefore, going to be shooting incredibly well. Many players claim that it happens, and many statisticians point out that it doesn’t. The argument against basically says that when you look at the frequency that a missed shot follows a successful shot, you find that the whole “hot hand” thing is just an illusion. It may feel like something is happening, but the results don’t match.

The statisticians, however, are missing a key point: a basketball player is not on the court by himself. In other words, he’s not playing in isolation. When a player is shooting extremely well, the other team is going to put more effort into guarding him. Of course, if that’s correct, the extra effort expended guarding that star player should leave less available to guard other players on the team. In other words, the increased performance of a star should have the effect of increasing the performance of the entire team.

Once someone actually thought to ask that question and look at star performance in that context, the answer turned out to be that hot hands exist and that true star performers don’t just perform well on their own –they increase the performance of everyone on the team.

Star performers in a business setting are the same, or at least they can be. The trick is to set up your team so that star performers increase everyone’s productivity rather than just their own.

To begin with, what are your incentives? If you’re only rewarding team members for their individual performance, you’ve got a problem. You’ve told your star performer to make herself look as good as possible, even at the cost of other team members: Imagine a basketball team where each player was only concerned about his own personal record and not about whether the team won or lost. The fact is, such a team wouldn’t be all that successful. I’ve seen any number of software development teams, for example, structured in just that way, with exactly the expected results.

Part of what enables a star to be a star is the strength of the team. While it can be comforting to argue that focusing on individual incentives will weed out the weaker performers and leave you with the star players, that’s a bit like arguing that your basketball team only needs Michael Jordan. He’s a fantastic player, but even he can’t be everywhere on the court. Jordan is so good in part because he has a strong team supporting him. Conversely, the team is so good in part because of Jordan.

This brings us to the next point: how do people communicate on the team? This can be tricky: everyone sends emails around, but that doesn’t mean they are communicating. It’s important to look at the patterns of conversation and communication in the group: quite often, one person is the center of the wheel; even when a team member is ostensibly addressing the group, he’s really talking to that one person, and no one responds until that one person weighs in.

Related to communication is the question of how well your teams argue and makes decisions. A team which never argues is also incapable of making good decisions. Sure, they may get lucky once in a while: a blind basketball player might also sink the occasional basket. Effective decision making requires being able to debate issues, ask pointed questions, disagree strongly, and eventually come to a consensus that everyone can work with. Teams that can’t do that tend to not benefit from star power.

What is the boss’s attitude toward giving and receiving help? At one company, the manager who took over a particularly high performing team had the attitude that, “you do your job, and let the other guys take care of themselves.” Although the star performers continued to do relatively better than everyone else, overall productivity dropped off rapidly after that manager took over the team. People stopped helping each other. Conversely, in a different department, the manager who came in with the “we’re all in this together” attitude saw his team performance skyrocket. Although the best performers on his team were not as individually strong as the best performers on the first team, on the second team the stars really brought everyone else up, and everyone else really supported the stars. In basketball, five people working together will beat five people working apart.

Hot hands exist, in basketball and in virtually all other areas of team performance. It’s only a question of whether or not your team is set up to take advantage of them when they occur.

That’s An Amazing Serve!

One of those little tricks known to certain expert tennis players is saying to an opponent, “That’s an amazing serve! However do you do it?”

They’ll typically do this as they switch sides of the net, and suddenly the opponent’s amazing serve fizzles. By making the other player think about what he’s doing and focus on his body, instead of on the ball, that one question can completely change the course of a game.

Many practitioners of jujitsu and aikido learn the unbendable arm: they are told to extend their arm and imagine water jetting out at high pressure. Their arm becomes incredibly hard to bend. If they try to focus on the muscles, the arm is relatively easy to bend.

A similar trick is used by proponents of medical magnets and various other magic therapies: they’ll ask you hold your thumb and forefinger together on your right hand, and really focus on keeping those fingers together. They’ll then grab your fingers and pull them apart. Next, they have you hold the magnet or the magic herb packet in your other hand, and imagine the strength it’s giving you. Suddenly, your fingers can’t be pulled apart.

It’s a cool trick. I do it regularly by claiming my MIT class ring is magnetic and having the other person hold it in their off hand. Even though people know there’s obviously a trick, it works virtually every time.

So what’s going on? It turns out that when you focus someone on the mechanics of how their body moves, it scrambles their ability to do it. On the other hand, when you focus someone on a particular effect, be that a good serve, an unbendable arm, or keeping your fingers together, the body figures out the best way to achieve the desired result.

To put this another way, we become less capable when we attempt to micromanage ourselves. We become more capable when we learn to trust ourselves to exercise our skills in the ways that make the most sense for us. We do best when we have the freedom to focus on what we want to accomplish and discover the best way of accomplishing it, instead of being locked into one way of doing it.

What is even more interesting is that the behavior of teams mimics the behavior of individuals. The more a manager attempts to control the details of how the team is doing its job, the less capable the team becomes. The expert leader knows how to trust his team and gets out of their way.

The beginning jujitsu player attempts to make every piece of the move perfect: they try to turn their arm at just the right angle, step to just the right spot, and so forth. They are stiff and awkward. The master knows the result she wants and produces it, confident that her body will do the right thing. What is the difference between the novice and the master? Correct practice. Obvious though this point may be, if you practice the wrong things, you’ll do the wrong things.

The team is no different:  a leader learns to trust his team and the members learn to trust the team and the leader through constant practice. Like jujitsu, however, it must be correct practice. The novice who practices incorrectly improves slowly, if at all. He may do more advanced techniques, but he does them with the same awkwardness and wasted energy of a beginner. The team which focuses on the wrong skills may be given more difficult projects, but it does them with the same lack of coordination and poor use of resources as it did when it first got together.

When teams come together and attempt to leap straight into project definition and problem solving, they are focusing on the wrong skills. They haven’t yet learned how to be a team. Before they can define the project or solve problems they have to learn how to make decisions that they can all support. That doesn’t mean they all have to agree with the decision, but every team member must be able to enthusiastically implement whatever the team decides. That won’t happen if the team doesn’t know how to settle disputes and achieve consensus without splitting itself into factions.

Unfortunately, when teams focus on the wrong skills, leaders are unable to trust those teams to make good decisions. The leader, therefore, takes it upon herself to make all the decisions. While this may be a great way to get started, it starts to break down as the problems become more complex. This causes the leader to attempt ever tighter control of the team, with increasingly poor results.

At one major manufacturing firm I worked with, a certain engineering director was the go-to guy. He could solve every problem, and the team knew it. The director often complained that if he was stuck in a meeting, work came to a screeching halt, assuming it ever got moving fast enough to screech as it halted! The idea of taking a vacation wasn’t even in the cards.

The solution was to help him back off and let go of his control. Instead of solving their problems, he started walking the team through his problem solving process. Instead of answering questions, he showed them how he found the answers to those questions. Instead of making the decisions, he helped them develop effective decision making skills. It was pretty uncomfortable at first: the team got it wrong a lot, and he kept imagining what his boss was going to say to him if things didn’t work out. After a while, though, the team started to get the idea. Their problem-solving and decision making skills improved.

One of the very difficult transitions for jujitsu practitioners is discovering that doing very little yields the biggest response. Focusing on what should happen to their partner allows the technique to become effortless. This director had the equivalent experience:  although he felt like he was doing less and less, his team was accomplishing more and more. The less he focused them on the details of getting things done, the more they were able to do. Eventually, he was able to focus his time and energy on long-term strategic thinking, instead of day-to-day minutia.

Trusting yourself, or your team, to do the right thing isn’t magic. It’s the result of hard work and correct practice. The more you control the details, the harder the task becomes. The more you enable your team to deal with the details, the easier it is for everyone, and the higher the quality of the results.

Sometimes less really is more.

For Want of a Rubber Band

The other day, my DVD player stopped working. Naturally, this happened the night I was sitting down to watch a movie I’d been looking forward to. Quite simply, the tray wouldn’t open (presumably, it wouldn’t close either, but there was no way to test that). As we all know, a feature of modern electronics is that there are “No user serviceable parts inside.”

Nonetheless, I decided to open it up anyway. If nothing else, I figured I could at least recover the trapped DVD one of my kids had left in the machine.

Opening it up was an interesting experience. Inside was mostly empty space with a tray and a circuit board. Apparently the major difference between a portable player and a non-portable one is the amount of wasted space.

There was also one user serviceable part: the rubber band.

Yes, in the midst of the electronics there was a broken rubber band. That rubber band acted as the “drive train” to open and close the DVD tray. Just think about that: all this high tech electronics rendered completely useless by the failure of a sixty cent rubber band. How much is that rubber band really worth? Sometimes the value is not the cost of the item but what it makes possible. Sometimes the critical problem that is blocking us from moving forward turns out to be something small and simple, but only if we know where to look and what to look for. While I could have replaced the DVD player, that would have been a much more expensive solution than replacing the rubber band. Knowing the real problem enabled me to pick the best possible solution.

I was asked recently about my opinion on attendance point systems.

“Why?” I replied.

The person explained her company was having problems with absenteeism and people changing shifts without notifying anyone in authority. Based on this, she wanted my opinion of attendance point systems, presumably on the logic that implementing one would solve her problem. Unfortunately, without knowing exactly why people are not showing up for work on time and without knowing why they’re constantly switching shifts, implementing an attendance point system is as likely as not a solution in search of a problem. Sure it might work; on the other hand, it might not work. It’s basically a roll of the dice.

So why jump to that solution? Simple. It’s easy. Faced with a problem without an obvious solution, the natural response is to impose a solution that fits the symptoms. Symptoms, unfortunately, are not the problem; they’re just the symptoms. Like taking an antibiotic for the flu, it doesn’t help and may make you feel worse.

Instead, we need to work backward from the symptoms to understand the underlying problem. With my DVD player, the symptom was that the tray wouldn’t slide out. Had I assumed the problem was that the electronics were fried, I would have tossed it and bought a new one. By investigating the problem, I had a working DVD player in less than fifteen minutes.

Investigating the problem, however, requires a certain amount of effort and frequently appears overwhelming and expensive. The lure of an obvious, easy, and, above all, cheap solution is very strong. The fact is, there are a lot of obvious, inexpensive solutions to many problems. In a business, it’s particularly easy to find an easy solution particularly if you don’t care if it actually works. If you want a working solution, though, the choices become somewhat more limited.

Investigating a problem is rarely as overwhelming as it first appears. With the DVD player, it was easy to open it up and see what was going on inside. With human systems, on the other hand, taking them apart in that way can be a bit problematic. Putting them back together again is even more tricky. The real key is to see how often the symptoms appear and under what conditions. What other symptoms are there? What do people say when you ask them about their experiences and their observations? As you put together a picture of the symptoms and when they appear, you can start brainstorming about possible causes. Does your organization have a cold? The flu? Is it suffering from growing pains?

At one company, everything was going great until they went public, had a huge influx of cash, and began a rapid expansion. Suddenly, all sorts of symptoms appeared: increased conflict, passive-aggressive behavior, confusion, inability to follow through on decisions, and so forth. Fixing the problem required first identifying what was really going on, and then crafting a solution appropriate to that organization. None of the problems were that big, but, like that rubber band, they were in critical places.

In a sense, it’s not how big the problem is that matters most. What matters most is what that problem is preventing you from doing.

How much was that rubber band worth again?

Becoming a Loyalty Magnet

Originally published in American Business Magazine.

“I’m looking forward to seeing the results of our work when I return from my two week vacation in Hawaii.”

The coughing and sputtering sounds that broke the silence came from one of the vice presidents who had just choked on his coffee. He had apparently not been briefed on the content of the talk that Fred, the CEO, was giving.

The team was pushing hard to hit an aggressive product launch deadline. The CEO decided they needed a shot of inspiration, a few words of encouragement. He called a meeting in which he exhorted the team to work long hours, work weekends and give up time with their families in order to hit the deadline. Had it not been for his rather dramatic final sentence, his little speech would have been utterly unmemorable. As it was, however, it became the stuff of legend. By the time he returned from Hawaii, two people had quit. Within six months, half the company was gone. After a year, only the CEO’s footsteps echoed hollowly in the empty corridors and offices of what had once been a thriving company.

This, it may be argued, was not the way to build loyalty.

To be fair, it was not this isolated incident that led to the exodus. The Hawaiian vacation was merely the final straw, which, under other circumstances, might have been taken as a joke. While it’s certainly possible, albeit difficult, to lose employee loyalty in a heartbeat, building employee loyalty is a process. Depending on how well you’ve managed that process, your Hawaiian vacation might be the source of some good-natured grumbling or it might be the death knell for your company. Context is everything. As for your customers, well, if you haven’t managed to gain employee loyalty, you can forget about customer loyalty.

So what is this process? In today’s environment of tight budgets and limited raises, what can be done to keep your employees coming back? It’s not as hard as you may think.

To begin with, though, let’s debunk that popular myth that employees had better be loyal because there’s nowhere else for them to go in this economy. If your business is in a profitable niche, then you can bet that other businesses will join you there. Nothing attracts competition like the scent of money. During the last recession, I had a senior manager boast to me that he’d just scoffed at an employee who asked for a raise. “I laughed at him and told him he should be grateful that he has a job!”

A short time later, that employee had a new job with a significantly higher rate of pay. If he’d received a raise, he wouldn’t even have been looking. That manager’s department, meanwhile, was set back six months by the loss of that employee.

Sure, it’s a lousy economy, and sure, it’s hard to find a job. However, those companies that are hiring like nothing better than to lure employees away from their competitors. Indeed, foolish though it may be (see the article, Who Betrays One Master ), a great many companies will only hire those who are already employed somewhere else. Never assume that your employees have nowhere to go.

The first step to building employee loyalty is to give them something to be loyal to. If that’s their paycheck, then all you’ve done is hire a bunch of mercenaries. That’s fine, until someone offers them more money. If you don’t want mercenaries, though, start by getting people excited. What is your company doing? Why does anyone care? Why should they care? Why should your customers care? It doesn’t matter whether you’re a high-tech startup, an accounting firm or a landscaper. If you can’t clearly and succinctly state the value that you are bringing and get people excited about providing that value, you’re in trouble. Recognize that your message doesn’t have to appeal to everyone. Rather, it only needs to appeal to the people you want to hire and, eventually, to those whom you’d like to turn into your clients.

Crafting an exciting message isn’t always easy, but the benefits are worth it. Most of us want to take pride in our work. The more vividly we can see ourselves providing value, the more motivated and loyal we are. Similarly, when clients receive value from a company that isn’t afraid to stand up and say, “This is who we are!” they also become more loyal. People like to support causes they believe in, so make sure your company is the company people want to spend money to support. This is something our friend Fred did well. His product was one his employees were initially extremely excited by and his customers couldn’t wait to get their hands on it. Unfortunately, that’s as far as Fred went.

Now that you’ve established the frame, if you will, the next step is to start filling in the details. Having an exciting message is only the beginning. You have to help your employees see how they fit into your corporate story. Remember, when it comes to stories, no one wants to be the bit part. Maybe everyone doesn’t want to be the hero, but virtually everyone does want to feel competent, important, valuable and useful. Exactly how you make this happen will vary somewhat from person to person, but here are some elements to focus on.

How many hats do employees wear? Some people thrive when given the opportunity to wear multiple hats on the job. Other people like to wear just one hat, but they wear it very, very well. Whether you need employees to do a variety of different things or one thing well, recognize that those alternatives often appeal to different people. When you get a match, you also get increased loyalty. When you give people the opportunity to experiment and potentially expand what they’re doing, you get even more loyalty— provided they don’t think they’ll be fired for failing. But not all experiments are successful. The best way to get employees to do more is to let them develop an area of strength and then try new things. If they succeed, great! If not, they can retreat to their area of strength and try again. Over time, you’ll end up with steadily more competent employees.

The more competent your employees feel, the more loyal they will be. By extension, the more competent and loyal your employees, the more satisfied, and hence more loyal, your customers. Fred got this one wrong on two counts: First, he rarely let anyone experiment to see if they could expand their duties. When he did, he focused on weakness instead of strength and had no tolerance for failure. The net result was that everyone swiftly became afraid to try anything new or volunteer to help out beyond the limits of their job lest it not go well.

Employees also want to feel as though they matter to the company. Can your employees see how their work contributes to the company? When I worked for IBM in the 1980s, I was a very small cog in a very large machine. Even my most successful project was a rounding error on Big Blue’s balance sheet. Fred’s company was considerably smaller and each person could see how their work fit in and mattered. Fred’s biggest mistake was that he didn’t take the time to recognize the work his employees were doing and remind them how much it mattered. Even so, the employees quit in inverse order to the importance of their contribution. Make sure everyone can see their contribution to the company and periodically thank them for it. The more visible and important their work, the more loyal your employees will be.

Part of feeling competent and important is being able to make your own decisions. While any given employee may only be able to make decisions in limited areas, nonetheless, it’s important to provide employees with the opportunity to make as many decisions as possible. Fred needed to be part of every decision, even the most trivial. Not only did this slow down progress, it also left the experts in the company mightily offended. If you’re going to go to the trouble and expense of hiring highly skilled people, make sure you let them make decisions on the best ways to exercise those skills. Create a framework, provide guidelines and structure, but give them some freedom. For example, you might give your customer support people the authority to provide refunds to any customer up to $100 (or $1,000 or $10,000 depending on the nature of your company and product/service). They’ll feel good because they’re getting to exercise their own judgment and help the customers. Then, the customers will be happy because their problem was resolved quickly. Once again, you’ve increased loyalty.

Finally, how will your employees know they’re doing the right thing? Let’s face it, no one wants to have to ask how well they’re doing and you really don’t want people bugging you all the time. That means they need to be able to see the fruits of their labors as part of the job. Developing feedback systems that keep you mostly out of the way is not an easy task, but it is a very worthwhile one. The easier it is for employees to get feedback on their progress, the more they’ll enjoy their work and the greater their loyalty. In addition, taking the time to talk to your employees one-on-one and let them know you see their efforts and appreciate them is very powerful. Back when IBM was a tiny, struggling company, a big part of Tom Watson’s secret to building loyalty was taking the time to meet everyone. Tom Watson, Jr., presiding over a significantly larger IBM, maintained the tradition.

If you take the time to get to know your employees, you also reap an additional benefit: When you know your employees as individuals, you can reward them as individuals. Rewarding someone at random because “I’ve seen your work and I just wanted to say thank you,” is a great way of increasing loyalty. Making that reward something the individual employee really values is even better. Fred could never bring himself to reward people. Instead, he always complained that their work wasn’t good enough and would find excuses not to give rewards he’d promised.

Loyalty is not something that just happens. It’s something that you build over time and put in the bank for the times when you need it. If it’s not there, a single wrong word can cost you your employees or your largest customer. If it’s there, well, you can accomplish almost anything. The choice is yours.