Tag Archive for: Sidebar: Charles H. Green

If a tree falls in the forest and no one hears it, did it really fall? Have you stopped beating your wife? What if you gave a party and no one came?

These are three conundrums of different types, but they all have one thing in common—they play on the ambiguities of language. They sound simple, but contain multiple references that cause us to do a double-take.

To that list, add “What if you lead, and nobody follows?”

Noonday Ventures writes about Dirty Word #6—Followership:

OK, do a quick scan of your bookshelf, podcasts, and mental catalog of leadership talks. How many have you heard on the art of following well?

After looking through literally hundreds of those artifacts collected over twenty years, I found exactly…. ONE!
(Incidentally, it was a very useful talk given by a leader at a high-growth church known for its strong leadership.)

Why is that? Why is it that when someone quotes the tired saying, “Lead, follow, or get out of the way,” we really see only one good option – to lead! I’d guess there are a lot of reasons, but our world certainly glorifies heroic leaders whose brilliance single-handedly tilts the earth to the benefit of their grateful followers.

He could have cited this chestnut: “Unless you’re the lead dog, the view never changes.” There are leaders, and there are followers; which will you be— a leader, or a butt-watcher? That seems to be the question, as it is usually posed.

But can this be right? Is our mania for leadership just a social phenomenon of glorifying winners and denigrating losers? Or is there some linguistic and conceptual confusion going on here?

In fact, ambiguity abounds:

• One HR friend tells me, “the leadership area is vague; they can’t figure out if it’s a verb or a noun.”

• David Maister says, “I think more rubbish has been written about ‘leadership’ than almost any other business topic. A lot of it is patently false, and even more of it is dangerous.” (But what does David really think?).

• James G. March (Stanford Professor, gurus’ guru, “the Miles Davis of organization theory”) says “I doubt that ‘leadership’ is a useful concept for serious scholarship. The idea of leadership is imposed on our interpretation of history by our human myths, or by the way we think that history is supposed to be described. The fact that we talk about leaders and attribute importance to them is neither surprising nor informative.” [HBR Oct 2006, HBR Interview]

Take that, sled-dog metaphor-slinging consultants!

What we have here is a failure to communicate.

The word “lead” is confusing because it used to refer one thing—but the thing it referred to is changing. Hence the ambiguity.

It used to refer to those at the “top” of vertical, command-and-control, fixed-boundary silos called “companies.” “Companies” used to be the atomic unit of business; they contained fixed groupings of people called “organizations.”

Today—not so much.

Today, the atomic unit of business is the individual, not the company. “Organizations” are fluid, crossing corporate boundaries.

“Companies” still exist, of course, but a more useful idea might be “business”—and businesses are ever-changing, morphing blobs of projects and teams that get together to accomplish projects—then move on.

The primary dimension of interaction is becoming horizontal, not vertical. “Leader” becomes a confusing word because of the past vertical associations.

So what’s a “leader”? It’s a role. A role played at a particular point in time by a particular person with appropriate-for-the-moment behaviors and attitudes. And it all changes.

What about “everyone needs to be a leader”? It’s true. Confusing—because of the linguistic heritage—but true. We all need to be able to influence others, and to be influenced by others. That’s how horizontal relationships work.

But we sure could use a new word for all this.

How about “trust”?
 

Sounds ridiculous, right? Except in Sales.

David Hoffmeister, director of DePaul’s Sales Leadership Program, quoted in Management Issues blog
 has this to say about a recent study they conducted:

Most of the firms in the survey use the traditional base salary plus commission formula for compensation, but Hoffmeister argued that profound changes in the attitudes of today’s savvier customers mean that they should consider alternative ways of rewarding sales staff.

"Customers are unhappy with sales people who are motivated by commissions to sell to them rather than serve them," he explained.

"Firms need to think about reshaping their compensation practices so that sales people are rewarded for partnering with customers rather than for sales volume alone."

Right on.

I recently heard of a major US company altering the incentive structure for major account managers.  Historically, the AM role was client-service-oriented.  Now they’ll be evaluated on sales volume.

Hmmm…let’s envision the results.

Anyone guess, more customer dissatisfaction?

How do companies make such seemingly (to me) wrong decisions?

For three reasons, I think.

1. Some really believe that since their product is the best, the customer is best-served by buying from them. Thus, customer satisfaction is a direct function of share of customer wallet. The potential for circular thinking is apparent.
2. More typically, the company is revenue-driven, and believes that revenue-based incentives—typically financial incentives—are a no-brainer. They are oblivious to the consequences Hoffman points out. Paying someone for selling you doesn’t make the customer feel cared about.
3. More deeply, there are a set of au courant beliefs—metrics, line-of-sight thinking, accountability— that link everything to short-term customer profitability. This flies in the face of the simple idea that the greatest short-term profitability comes from long-term customer focus—and precisely not from focusing on tweaking short-term metrics.

Some companies say, “We’re very customer-centric. Incenting our key customer relationship people on sales aligns their interests with the company’s, and they know that the company’s goals are to be customer-focused. It’s all a virtuous circle, and we’re aligning the compensation system to fit with it.”

In my experience, if you hear this, check your wallet.  They’re telling you that they’re paying the salespeople more money if they behave unselfishly.

That’s like paying a boy scout to escort the little old lady across the street.

Offering bribes to obey the ten commandments.

Paying people to go to church.

It’s telling them to be unselfish by appealing to their selfish interests.

Does it work? Sure—it works to create faux unselfishness, fake sincerity, conditional customer service. That’s the trouble with external rewards; they poison intrinsic motivation.

But don’t listen to me. Check out Jeffrey Gitomer, one of the more in-your-face personal sales cold-call sales gurus (who nonetheless gets the trust thing, by the way):

According to Gitomer—and he ought to know—the concept of the money-driven short-term shake-hands-count-your-fingers hustler salesman is not genetically encoded in the salesperson. It’s a direct consequence of the way executive management has treated sales over the years.

They got what they asked for: people who would hustle to move product. The majority of salespeople have never felt comfortable with that self-view, in my experience, and have suffered from not being able to articulate their way out of it.

Hoffmeister is right. Customers have nothing against alignment of rewards—they’d just like to see the alignment based on value to client, not on money extracted from client.

What’s amazing to me is that selling organizations, for the most part, have yet to figure out that this level of customer satisfaction is also in their best interest. 

Gitomer lays the blame at the feet of top management. But there’s plenty to go around.

Lets take on a sacred cow. Or at least a venerated goat.

Let’s talk about employee retention.

Employee retention is one of those unexamined “obvious” goods. Here’s an excerpt from a typical article, this one from HR.com’s Trendwatcher newsletter, Issue 353, March 23, 2007.

Retention Before the Fact

By Carol Morrison

“Retention is always important because of the investment you make in people,” observes Gerald Shields, CIO of American Family Life Assurance Co.….experts agree that the costs of losing valued employees can be considerable. That is why some experts encourage companies to begin efforts to retain employees before their employment officially begins.

…the average cost to replace a worker in private industry is $13,996…Other sources have replacement costs ranging from nearly 29% of an employee’s annual wages to several times his/her yearly salary. 83% of HR professionals at U.S. companies express concern about both retention and recruitment

…taking care during the recruitment process can save organizations the far greater costs associated with replacing employees who leave and the resulting losses in productivity and morale of remaining workers.

Sounds reasonable until you look under the hood.

What’s happening with employee retention (I’ll deal with customer retention another time) is what happened with loyalty. A good concept has been doubly perverted, by:

• a. Justifying the concept solely in terms of profit to the company, and
• b. Mistaking the indicators for the originally intended object.

It starts with, “Retention is important because of the investment you make.”

Not because it’s good for the people themselves? For the customers? For the society at large?

Nope. Because of the level of company investment.

Not long ago, employee retention was positively correlated with a lot of good things—customer retention, for one thing. Knowledge and familiarity, better judgment, good relationships, motivation. And, yes, lower recruitment costs.

High retention rates meant you were growing and keeping things interesting for employees—an indicator of organizational health. The assumption was what’s good for the organization is what’s good for the employees—and, very much, it was. A virtuous circle.

Fast forward. Good employment advice now is keep your resume updated, keep looking around. Companies outsource and combine. Careers develop across companies. Keep your eyes and options open. Be flexible.

Don’t bemoan the loss of “loyalty” between company and employee—that’s so 20th century. Loyalty still has meaning—but it’s loyalty to teammates, friends, co-professionals, clients and customers, not so much to the one signing your paycheck. This is not bad: it simply means the corporate entity as a permanent source of identity and cohesion is kaput.

But we’re stuck with the ideological residue of still thinking that company and employees both benefit by high retention.

In today’s world, “retention” often looks like “restraint.” Keeping people in cages is the most effective form of retention, but it’s not politically correct.

Instead, we have golden handcuffs. Vesting. Club memberships. Equity. Non-compete agreements. Whispers of disloyalty about those who leave. Signing up search firms to get on their non-raid list.

Is this consistent with “we care about our people?” Not any more. Yet many firms claim to pursue both.

But you can’t have it both ways, not anymore. When careers are developed across companies, then bolting the door is—very simply—not in the interests of your employees. Their interest is to develop. That may or may not happen by staying put.

Great firms don’t mistake restraint for retention. Their people stay because they are free to leave—and choose not to. And those who do choose to leave are celebrated as alumni, not shunned as disloyal.

Paradoxically, the firms who actually do care about their employees—up to and including celebrating them finding a better job outside—will continue to have the highest employee retention rate. By serving employees—not restraining them. By treating them as ends, not as means.

Leo Bottary, author of blog Client Service Insights, has a great interview with Jonathan Tisch, the current generation CEO and Chairman of Loews Hotels. 

CSI: How do you build a team and create a culture that cares about great service as much as you do?

JT: At Loews we have a people skills training program called Living Loews. It’s vital that leaders get their teams to focus their attention on their guests. Once all your employees have a customer-centric mindset, all the other pieces of the business will fall into place. We find our employees enjoy their jobs more when they understand that their role is to help and please others.

CSI: If there’s one takeaway you’d like people to grasp after reading your book, what would it be? Is there an over-arching aha?

JT: Absolutely. Too often we think of business as the sale. But no customer wants to be sold to. They want great experiences. The more we think of giving our customers experiences that feel special, the more customer loyalty and profits will follow.

Tisch gets it. I can’t speak to how well his tens of thousands of employees have yet gotten it, but with that message coming from the top, the odds are good.

It’s not easy to achieve escape velocity from the gravitational pull of self-serving corporate beliefs.  We live in a business culture that celebrates short-term metrics and behaviors all centered around improving financial performance—of the corporation.  The purpose of business, we have been taught, is to create profits and beat other businesses.  Never mind whether you agree about the goal—it’s becoming so 20th century. 

Not too many leaders have the discipline and the savvy to remember that a heavy hand on client service and a light hand on company profitability has a paradoxical result—heavy profitability for both company and customer.

The world simply works better when companies, and people, focus on serving their clients and customers, rather than focusing on competing with each other, or on seeing their clients as sources of profitability for their own ends.

No one wants to be treated as means to another’s ends.  Yet that is the dogma most of us have been taught, where “loyalty” means spiff programs, and “customer-centricity” is code for “profit-for-us.”

If you do well by your customer, your customer will do well by you.

What a concept.

Here’s to Tisch.

The Gallup people have done some interesting research on the idea of employee engagement. In fact, I think they initiated the idea in 1999.

They have defined three groupings of employees—those who are engaged, those who are not-engaged, and those who are actively disengaged—and analyzed correlated statistics.

Their research and that of others has shown correlation with intrinsic motivation, and with profitable performance.

A good example is their article Feeling Good Matters in the Workplace, from 2006.

It’s the kind of research that I sometimes find eye-glazing at first blush. But it has some interesting data.

For one thing, the biggest single factor affecting engagement appears to the degree to which the direct supervisor focuses on their strengths or positive characteristics. In other words, appreciation expressed by one’s boss.

That provides an interesting corollary with John Gottman’s work on marriage, which also suggests, if I recall, that the ratio of positive to negative comments to each other is correlated with the success of a relationship.

Gee.  Maybe it is kind of common sense.  But uncommon enough that it still caught my eye.

The other strong correlation in the Gallup article is that between happiness and happiness derived from work. 45% of engaged workers say they get “a great deal” of their overall happiness from work, vs. only 19% and 8% of the other two categories.  Though in a way that’s surprising—if less than half the happy people get most of their happiness from work, then work must not be very happiness-inducing.

Some would say, again, duh. But I found it interesting.

Gallup is careful not to attribute causality. In these matters, it’s easy to fall victim to confusing cause and effect, when causality is inherently unprovable, and often messy.

So, let’s review. Happy people are engaged people.  Or engaged people are happy people.  I suspect it’s hardly one-way causal, but more of a virtuous circle; happy people attract more happiness, disengaged people suck the air out of the room and alienate others, etc.

What I find really interesting is that this sounds very commonsensical.  Yet, it contradicts some received wisdom in business.  Particularly the idea that people are primarily motivated by rewards.

The matching up of extrinsic rewards is virtually an article of faith among compensation consultants, sales organizations, change management theorists, and anyone doing anything with the word “implementation” in it. “You get what you measure,” they say.

No you don’t.

You get what you value people for. You get what you praise in them. You get out of people what you see in them intrinsically—not what you extract from them in work effort for incentive comp.

Want great organizations?  Get happy people. Want happy people? Don’t “align their rewards with their goals and behaviors”—talk to them, challenge them, praise them. Above all, value them.  And not as human capital—as human.