I was interviewed recently on the 3 things a business can do to grow in a down economy.
-Steve
“What is leadership?” is a question that’s been asked over and over.
This morning, I was interviewed on this question on Leadership Radio. The blog post by radio host Tom Cox is available here:
http://blog.thomasbcox.com/2009/04/defining-leadership-interview-with.html
And you can stream or download the show from here:
http://www.blogtalkradio.com/Tom-on-Leadership/2009/04/10/Defining-Leadership
If you’re a fan of the Daily Show, you probably saw Jon Stewart eviscerate Rick Santelli. This was extremely funny, and triggered quite the entertaining backlash from former hedge fund manager Jim Cramer. In one of the clips that Jon Stewart subsequently played, Cramer is shown talking about how his instincts for the market are telling him that Bear Stearns is doing fine. Of course, we all know what happened to Bear Stearns.
Now, my point here is not to bash Jim Cramer. The fact is, anyone who makes market predictions the way he does is going to be wrong a lot. That’s the nature of the game. Rather, my point is that trusting one’s gut is not always the best approach.
Gut instinct is not a magic power. The “gut instinct” for an untrained person being thrown in jujitsu is to reach out to protect themselves; that’s a great way to get hurt. Instinct, or gut feel, or whatever you want to call it, is something that is built up through practice and experience. Sandy Pentland, in his book Honest Signals, has a couple interesting suggestions for how gut feel might work. The short form, though, is that gut feel comes from rapidly and often unconsciously, recognizing that the current situation is similar to other situations you’ve experienced, and, through this pattern matching process, devleoping an appropriate response.
Sounds good, right?
To a point, it is. Any athlete will tell you that you have to train until your responses become instinctive. In fencing, for example, you don’t have time to think, you have to trust your intuition. That’s great, except when intuition leads you down the wrong path.
In sports, that’s relatively easy to fix. You go back to the drills and exercises you originally used, you go back to training with your coach, and you practice the correct response to the scenario. The tough part is when the trained response conflicts with the gut response. It’s difficult to accept when our intuition is wrong and work to change it.
Furthermore, the more complex the situation and the more hidden variables there are, the harder it is to pattern match correctly. Surface similarities will often fool our intuition into thinking it’s one situation when, in fact, it is another. Legendary stock trader Jesse Livermore once wrote that though he listened to his gut, he followed his rules. Why? Because when he just listened to his gut he lost money in a big way.
When you just rely on your gut, you have nothing to fall back on when things don’t work. Is this a temporary aberration or are you fundamentally wrong? If your gut told you to buy Bear Stearns at 50, well, your gut might be feeling a little bit unhappy right now.
Bruce Lee is famous for saying, “Learn the drill, master the drill, forget the drill.”
If you started with the drill, you have something to fall back on when instinct or intuition isn’t giving you the right answers. If you’re just relying on your gut and it stops working, what else do you do?
There is nothing quite like that warm feeling you get at the end of the day when you look back and wonder where the time went. There is nothing quite like realizing that an entire day has gone by and nothing got done. Unfortunately, this happens far too often, especially when the day holds meetings.
Meetings have a bad reputation for consuming a great deal of time while producing little of substance. That reputation is well deserved. Despite this, meetings remain extremely popular in many companies. Unfortunately, in addition to potentially wasting a great deal of time, meetings often tend to leave people drained and unable to focus. As a result, they use up even more time getting back on track after the meeting.
Read the rest at FreudTv.com
Once upon a time, the late and unlamented Soviet Union decided to grow wheat in Siberia. Their logic was simple: by growing wheat in the inhospitable conditions of Siberia, the wheat would become stronger. The wheat, however, was indifferent to Soviet philosophy. Despite speeches, threats, and promises from the government, the wheat stubbornly refused to grow.
A belief about how the world should work was trumped by the way the world does work.
To bring this a little closer to home, I worked with one high technology company that decided to create a set of coding standards for its software development team. While not an unusual occurrence in software companies, in this case, the manager in charge wrote up a fifty (that’s right, 50) page standards document. Naturally, everyone was overjoyed and memorized everything; at least, that’s what the manager thought. In fact, no one read more than a page or two and most of the engineers ignored even that.
Another company was trying to manage information: design decisions, notes from discussions, and so forth. They had the very good idea that they could manage all their accumulated wisdom as a Wiki. Unfortunately, the Wiki swiftly ballooned into an unmanageable morass of data in which no one could actually find anything useful. The problem wasn’t so much getting people to remember to update the Wiki; it was organizing the information in a manner useful to everyone who needed to use it, and in convincing people to take the time to keep it organized.
In both of these cases, beliefs about how people should do their work were trumped by the way people actually do work. Like Soviet wheat, it can be remarkably difficult to motivate or threaten people into doing something that they really do not want to do. Unlike wheat, people can be forced. It’s merely a question of how much time and energy you want to spend: pushing people takes a great deal of effort and tends to result in significant amounts of anger and frustration for all parties involved. Not, in other words, a conducive atmosphere for creating a strong, collaborative team.
Of course, sometimes it is necessary to have people do things they don’t want to do. Code does need to be commented, information needs to be documented, and so forth. Fortunately, unlike wheat, people can be convinced. Instead of pushing them, the key is to get them to pull. How do you do that? Here are some tips:
This may seem like a lot of steps, and there certainly is effort involved. The Soviet Union decided it was easier to yell at the wheat. Given the amount of wheat they imported, it’s clear which method is cheaper in the long run.
Good luck!
Published at FreudTV.com
It’s the end of the world! There’s clearly no chance that the US will escape from the current economic downturn. Doom is at hand.
More and more people are telling me that they no longer listen to the news. They are finding the steady drumbeat of negativity too depressing. Their response is to shut out the noise.
Now, there’s something to be said for that approach. After all, if you don’t listen, you don’t have to pay attention to how bad things are. On the flip side, you might also miss something useful. Back in 1910 or so, legendary stock trader Jesse Livermore always read the newspapers, no matter how bad things were. When the economy finally turned, he was ready. Inside a year, he went from a million dollars in debt to a million dollars in the black. During the Great Depression, IBM’s Tom Watson always stayed current on the news: when conditions changed, his swift actions made IBM a huge success.
Perhaps ignoring what’s going on is not the best course of action, especially for CEOs and other business leaders.
The fact is, though, 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. 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. So if the answer is not playing ostrich, and it’s not toughing it out, what does work?
The most important thing is to reframe excessively negative news into something more neutral or even positive. This is actually less difficult than it sounds, mainly because the news frequently appears worse than it actually is. In Edwin Lefevre’s classic, “Reminiscences of a Stock Operator,” he observes that the news media is always most excited and positive at the top of the economic cycle, and most dire and pessimistic at the bottom. Lefevre’s book was written in 1923, and his observation remains true today. Just because it’s easier to get the news doesn’t mean that the psychology has changed.
In a recent news report, one economist was 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. Today, we’re hearing the equivalent of Dow 3600. 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?
What then is the best way to listen to the news and keep your outlook positive? There are several strategies used by master stock traders and other business leaders:
· Be contrarian: it’s always most euphoric at the top and grimmest at the bottom.
· Look for the hidden opportunities. When it looks like we’re doomed, that’s when things are turning.
· Don’t listen to every news broadcast or read every paper or website. Hearing the same stories over and over reinforces the feeling that you’re getting new information. In fact, you’re getting the same information, and it’s all usually from the same original source. Hearing something through multiple channels “tricks” us into giving it too much credence.
· For some reason, negative news frequently sounds logical and good news foolish. Stop and take a larger perspective. Don’t let your point of view become narrow.
· Each day, set aside some time to get away from the computer. Shut off the TV, put down the newspaper. Do something fun. Give yourself perspective.
· Don’t be afraid to act. It’s easy to get stuck looking for the perfect move. Sometimes, the important thing is just to move. Once you’re moving, it’s amazing how much more positive the news becomes.
While it’s certainly true that we can’t control the economy, we can control how we react to it. You can be sucked into the doom and gloom, or reframe and seize the opportunities that are out there. Tom Watson chose the latter. What’s your choice?
“What was the primary means of motivation in those days?”
“Fear.”
— Carl Reiner and Mel Brooks, The Two Thousand Year Old Man
For the 2000 year old man, fear may have been a very effective motivator: when he saw a lion, he was motivated to run the other way. That, in a nutshell, is the problem with fear. Fear doesn’t make someone move toward safety; it makes them move away from danger. Same thing? Not really. In jujitsu, pain can be used to invoke a fear of injury. Someone experiencing that pain, and that fear, will move away from it, even if moving away means running full tilt into the nearest tree.
In business, the same phenomenon occurs. Faced with an unexpected problem or setback, the most common response is to highlight the threat to the organization and all the terrible things that will happen if the threat is not immediately countered. This practice of attempting to motivate people to work harder through fear – fear of competition, loss of market share, job loss, company going out of business, and so forth – may encourage harder work, but not necessarily more effective work. In the business environment, there are a lot of trees.
While fear gets the adrenaline flowing, it also narrows focus, reduces creativity, and makes it harder for people to recognize and change a losing strategy. This would be fine, except that what is actually needed in most situations is a creative solution, the ability to accurately assess whether or not a strategy is working, and the ability to quickly discard failing strategies. Avoiding premature decision making, no easy task at the best of times, only becomes more difficult. As we all learned in grade school, in the event of a fire, don’t rush for the door: proceed slowly and avoid panic. The same is true in business: rushing to a decision is almost guaranteed to lead to a bad decision.
So given that the business needs to get employees focused and energized to meet a potential challenge, how should it go about doing that?
The key is to recognize that the glass in not half empty. It’s half full. That makes a difference: instead of focusing on what you lack, focus on what you have going for you. Instead of fear, instill an atmosphere of optimism. There are several steps to accomplishing this:
Half empty or half full. A fearful team or an enthusiastic, creative team. It’s your choice.
Published at FreudTV.com
Scott Adams, of Dilbert fame, routinely features tales of bumbling managers. The popularity of Dilbert, and the degree to which it resonates with people, are a testament to his accuracy; indeed, Dilbert’s pointy-haired boss has become an iconic figure. Dilbert aside, however, I have observed that very few leaders are intentionally like the pointy-haired boss depicted in the comic strip. Rather, they engage in pointy-haired behaviors without realizing the effect they are having on the organization as whole. Let’s explore some examples of such behaviors and their unintended consequences.
1. Pointy-haired bosses break their own rules and figure either no one will notice or no one will mind because they are in charge. In one company, the CEO called everyone together to talk about the importance of really working hard and putting personal needs to one side in order to ship a product. At the end of the talk, he announced he was leaving for a two week vacation in Hawaii and wished everyone good luck. This did not go over well. One vice-president, who had apparently not been warned, almost choked on his coffee. When the CEO came back, two people had quit and the rest were up in arms.
2. The pointy-haired boss believes that he is separate from the group he leads. In fact, leaders are also group members, with a very important and well-defined role. Through their actions, leaders set the norms for their group. For example, the manager of a team at a large software company imposed a $.25 penalty for being late to meetings. When he was subsequently late himself, the team gleefully demanded he pay up. After a brief stunned moment, he tossed a quarter into the pot. No one complained about the fine after that. What the leader does is directly mirrored in the organization. When leaders find that employees are not living up to the standards of the organization, they often need to look in a mirror and see what example they are setting.
3. Pointy-haired bosses fail to recognize the culture they are creating. To be fair, it’s hard to see your own culture from the inside, and despite what many managers and CEOs believe, culture is formed not from what you say but from what you do. As MIT’s Ed Schein observes, “Culture is the residue of success: success in dealing with external challenges and success in internal advancement.” What behaviors are successful in the organization? What behaviors are rewarded? The very behaviors that people tell me they want to change are frequently the ones they are encouraging.”
4. Pointy-haired bosses lack an understanding of group/team dynamics. They like to say that their organization is “different,” and the research on group dynamics doesn’t apply. That’s like the people in early 2000 who said about the stock market that “This time, it’s different.” If you’re dealing with people, patterns repeat. It pays to recognize the patterns and understand how they are manifesting in your specific situation.
5. Pointy-haired bosses are often unable or unwilling to create a clear, compelling vision for their organization that gets everyone involved and excited. The best way to attract and retain top talent is to make people care about what the company is doing. That’s best done through painting a vivid picture of the outcome and creating clear goals.
6. Pointy-haired bosses motivate through short-term rewards and/or intimidation. They assume they know what their employees want, rather than taking the time to ask or to observe how people are responding. Short-term rewards and intimidation generate short-term spikes in performance, but build neither loyalty nor the desire to go the extra mile. Unfortunately, far too many people are willing to sacrifice the longer-term performance of their team for a short-term gain . In one company, the head of engineering “motivated” employees by inviting them to join him for happy hour in a bar on Friday nights. Had he asked, he would have realized that what the team wanted on Friday nights was to go home and have dinner with their families. Instead of motivating the team, he made them feel imposed upon.
Finally,
7. Pointy-haired bosses do not believe in asking for or accepting help. It’s not about asking for help, it’s about investing time and money to enable the company to accomplish its goals. The boss’s time is a resource; skilled leaders invest their time and the time and money of their business where that will produce the best return. Sometimes the best return is obtained by investing in an employee, sometimes by investing in a contractor.
Very few leaders deliberately engage in these Pointy-haired boss behaviors. Rather, their behaviors are the result of their own corporate success story. Therefore, for all that even one or two Pointy-haired boss behaviors can derail an organization, behaviors acknowledged to be counter-productive are very difficult to eradicate. Nevertheless, the ability of a manager or CEO to recognize these failings and invest in changing themselves is the true test of “great” leadership.
Published at FreudTV.
There is an old and hoary claim that if you put a frog in boiling water, it will immediately jump out, but if you put it in cold water and slowly increase the temperature, the frog will sit there until it cooks. In fact, this happens only if the frog is equipped with little frog cement galoshes rendering it unable to jump: frogs are too smart to be boiled alive. They leave long before the water gets hot enough to cook them. Why, then, does this story have such longevity?
A great many organizations are depending more and more on volunteers to help fill the gap created by the economic downturn. Now, one might ask, “So what? That’s nothing new.”
There’s some truth to that: churchs, synagogues, trade groups, sports clubs, and so forth have always relied on volunteer labor. That hasn’t changed. However, some attitudes have.
Many organizations provide some sort of perks or guarantees to volunteers: this might mean dinner with a guest of honor, reduced rates for events, reimbursement for expenses on behalf of the organization, a chance to win a free vacation, and so forth. Many organizations are being forced to cut back on such things. There is a right way and a wrong way to handle such cutbacks.
The wrong way is best exemplified by a comment I heard recently: “What’s wrong with you people? Don’t you know we’re a volunteer run organization?”
The comment was in response to someone asking why the organization in question was not covering certain volunteer expenses to the level it had in the past, especially after the organization had stated that it would cover them.
Volunteer organizations are being hit, just like everyone else. Fair enough. But acting like the volunteer had no right to ask the question is highly unprofessional, quite possibly unethical. If you’ve agreed to pay a contractor to work on your house, would you turn around and refuse to pay if the work were done according to specs? How about your doctor? I doubt very much that anyone would appreciate having their employer tell them that they were expected to continue working, but that the company had decided to stop paying their salary.
Now, the argument is often made that there’s a big difference between a volunteer and a paid employee. While there are certainly superficial differences, at root, there’s also a great deal of similarity. In fact, one can argue that virtually everyone is a volunteer: it’s just a question of whether they’re paid in cash, benefits/perks, recognition, or some combination and how much.
Fundamentally, the organization is making a deal: in exchange for a certain level of value provided to the organization by the volunteer, the organization will provide some form of recompense or recognition for that effort that demonstrates that the volunteer is contributing to the success of the organization. In fact, that recognition is doubly important: the organization is showing that it appreciates the volunteer’s efforts, and the volunteer is receiving solid evidence that the work they are doing matters to the organization. Let’s face it, no one likes to spend their time doing something that doesn’t matter to anyone.
When the organization reneges on its end of the deal, it risks leaving the volunteer feeling taken. Worse, it’s telling the volunteer that it doesn’t actually care about their contribution: that it’s clearly not all that valuable to the organization or the organization wouldn’t be so cavalier about it.
All in all, not a great way to maintain motivated volunteers during tough times.
So what should the organization do? Optimally, it should honor its commitments. However, if there are real economic reasons why they can’t (an unfortunately likely occurance today), then the organization should be not just open, but preemptively open.
In other words, as soon as the organization knows that it can’t meet its obligations, it should notify everyone affected by that. Lay out the situation; not “due to the bad economy,” but “due to an unexpected drop in enrollment costing the organization $xx, and unexpected expenses in the areas of xxx” and so forth. The more specific and open the organization is, the more forgiving people will be. In fact, they are likely to work even harder on behalf of the organization: after all, if they’re volunteering it’s probably because they care.
When things are bad, the instinct is to circle the wagons and not communicate. That’s the wrong response. All it does is alienate those who would help. Instead, demonstrate trust by bringing people in and being open with them. Not only will it keep the volunteers motivated, you might just get some unexpected, novel ideas that will benefit the organization.
