Wisdom is the Power to…

…put our Time and our Knowledge to the Proper Use.

Time Management is one of the more important and popular leadership topics I am asked to speak about in my seminars. Knowledge, as a function of effective decision-making and communications, is integrated into nearly every workshop I facilitate. It occurs to me addressing both in the context of the quote by Thomas, J. Watson, former Chairman and CEO of IBM made sense in today’s time and knowledge strained business environment.

We’ve all heard the expression “Time is Money”. We know money is either spent or invested. When we invest money we expect a return on our investment. When we spend money, we consume what we buy as a one-time event. Time is no different in the sense that it, like money is either spent or invested. When we spend time, we never get it back as it is a one-time event. When we invest time, we have an expectation of some level of return for the time invested. The difference between spending time and investing time is the presence of goals. When time is used towards accomplishing our goals, we are making an investment in our personal and professional future. When we do not have goals, time used is spent on one-and-done events, which literally do little to advance our future.

We live in a world that is information-rich and knowledge-poor. We can get content from anywhere through the wonders of modern technology and the plethora of data sources available to us in real time. However, it takes a level of understanding and time to put the content into a context resulting in sustainable leadership decisions. It is knowledge which helps leaders know when and where to effectively leverage their leadership skills. When leaders rely only on information, as far too many do in my experience, their decisions have limited effectiveness for their organization. True knowledge-based decisions and communications provide deeper meaning and understanding for all in the organization.

The implication to today’s leader is clear. They are increasingly challenged where they invest time and deal with volumes more information to convert to knowledge than existed in the days of Thomas J. Watson. However, the need to properly invest time and knowledge has never been more important. The key element to both is having clear, written goals that align to the leader’s purpose and vision in a very specific, measurable and time-bound manner. In this way, time is invested towards goal achievement and only relevant information becomes knowledge to achieve desired results.

It is wisdom that forms the foundation of sustainable leadership. Wisdom based on the effective investment of time and the efficient use of knowledge to become life-long leaders. How are your goals taking you down the road to Wisdom?

Lead Well!

Effectively balancing the “What”…

…versus the “How” as a Leader

One of the most challenging balancing acts a leader faces is determining how much they communicate what they want the desired results and outcomes to be, balanced against how much they tell those who execute the business how to achieve the desired results and outcomes. I would imagine your first response might be something along the lines of, “Whatever it takes to achieve the goals” or possibly, “ If you want it done right, you need to tell them exactly how to do it”. However, if you view the role of leader against the long-term view of business success, the answer is not so simple.

One would think communicating what to do would be the easier of the two tasks. I maintain they are both equally challenging for completely different reasons. A leader who effectively communicates what needs to be done is not merely reciting a checklist of tasks needing to be completed. It starts with translating the Vision of the business into a meaningful and tangible language for those who execute the business goals. Because the leader cannot possibly communicate every minute detail of the strategy, they must outline enough of the “What” and “Why” for the strategy to succeed. In other words, leaders must communicate their intent to the organization and it is where one of the biggest challenges occurs.

A question every leader must clearly communicate is “What does Success look like?” When the business is successful, what are people in the business doing? What are customers of the business saying about you? What are your vendors doing to support you? The more detailed the answers, the clearer the leader’s intent. Notice there is no mention of how all this occurs, only that when success does occur, this is the picture we see.

Which brings us to the communicating how to achieve the desired results. The process begins with an accurate assessment of the Attitudes, Skills and Knowledge of the team. We know that Attitude, or the Want to succeed is 75% of the overall success equation. If those who execute the business do not believe they can carry out the strategy the leader communicates to them, it is a foregone conclusion it will fail. If they believe in the strategy, success is three quarters complete! The team must also possess the requisite Skills, or how to do the functions to succeed and the Knowledge, knowing when and where to leverage the requisite skills for overall success.

Understanding the necessary Attitudes, Skills and Knowledge in the context of the leader’s intent, presents its own challenge because leaders may have differing perspectives than those who execute the business. As Anais Nin once said, “We don’t see things as they are; we see them as we are”. One only has to look at the behavioral differences between a Baby Boomer leading a team of Generation X and/or Generation Y associates. The context of the leader’s intent may be translated differently (not necessarily correctly or incorrectly, just differently) leading to less than desired results.

It all starts with effectively communicating a strategy and strategic intent to those who execute the business. If a total stranger walks up to you and asks you to describe what your success looks like, how clear is the picture you paint for them?

Lead Well!

Being “Above Average” is to Success...

...what being “Above Ground” is to Living.

This quote is from Jay Niblick’s book “What’s your Genius” I previewed in the November 2010 issue of “What to Read”. It struck a chord with me when I first read it and as I sat down to pen this issue on achieving success, it resonated once again. I believe it speaks to success being more than just getting by, much like truly living life being judged by more than simply standing upright and breathing.

What I find interesting is how much less I hear the term “Success” now than I typically did last quarter. A quarter ago, which to many was the end of their fiscal year, I heard many variations of “We succeeded because...” or “Look what we did to succeed”. What I hear little of now are phrases like, “Here’s what we will do to succeed” or “Our success looks like...” It is as if we only feel comfortable talking about success after it happens. We seem less comfortable planning for success and overtly stating how we will achieve it. Too often we throw together a loosely defined plan and hope it works.

As we find our rhythm for 2011, here is how we can definitively achieve success both professionally and personally. It all begins with goals. Not just any goals, but ones that carry meaning in the context of what you want to achieve. Many of our readers are familiar with SMART (Specific, Measurable, Attainable, Realistically High and Time Bound) Goals. I would take it a step further and suggest they be WAY-SMART (Written, Aligned, Yours, SMART) Goals.

Having goals help you identify what you want to do and why you want to achieve them. However, you also have to be capable of achieving success. Do you possess the skills (the know how) required to be successful? Additionally, do you have the knowledge (the know when and know where) to use your skills in their proper context? We spend a good deal of time, many times the majority of our time, developing our skills and knowledge, believing they will help us achieve our goals and ultimately be successful.

But is it enough? Not really. One only has to listen to the battlefield of broken resolutions that typically show themselves this time of year. With great intentions so many set goals to improve themselves aptly equipped with the skills and knowledge to do so. Yet by late January or early February, they begin to break down. What’s missing? It is our attitude that makes the difference. It defines our want to achieve our goal and be the success we have pictured in our mind’s eye. While attitude contributes nearly 75% of our success, how much time do we spend developing our attitude? Probably significantly less than 75%! Instead, we continue to invest heavily in skills and knowledge hoping they will make up the difference. They won’t!

The right combination of Goals, Skills, Knowledge and Attitudes provide us our greatest opportunity to create a future of success. In a Victor Hugo quote forwarded to me recently, he states, “The future has many names. For the weak, it means unattainable. For the fearful, it means the unknown. For the courageous, it means opportunity.” Do you have the courage to live more than just “above ground”?

Lead Well!

Leadership Lessons…

…From Running Triathlons.

Several weeks ago I ran a Sprint Triathlon in our hometown, something I’ve done for the last four years. However, what made this year special is I ran it with my youngest son who was running the race for the first time. Since it was his first race and our plan was to run it together, our motto for the race became “Start Steady, Finish Strong”. Undoubtedly, most of you reading this have heard of the famous Ironman Triathlon in Hawaii. The Sprint Triathlon is the shortest of the four official distances but still involves the same three events – swimming, biking and running in that order. So as I reflected on the race, it occurred to me the parallels between training and running triathlons with the leadership coaching I do as part of my practice.

When I first began competing in triathlons, I viewed them as separate events in which to train. I was a competitive swimmer and runner in both high school and college so it was natural for me to train in each event as I had before. This is no different when we find ourselves approaching new professional and personal challenges by relying on the skills and knowledge we developed from our past. Even when we set goals for ourselves to improve in an individual endeavor, it is still the past that governs our execution unless we consciously make a change. And as I realized my training regimen wasn’t enough, I needed to make a change - in my attitude regarding the race itself!

I had to change my mental approach to the race to ultimately achieve my goal. I actually made two changes. First, I changed my mental approach to the race from three individual events back-to-back-to-back to one race with five aligned competitive pieces. I say five because the transitions between events are really mini-events in and by themselves as the clock continues to tick during the swim-bike and bike-run transitions. Secondly, I realized I could not do this solely based on my own experience. I reached out to accomplished tri-athletes and read blogs from others who were also trying to optimize their triathlon experience. These two changes helped me align my actions to accomplish my overall goal.

So what does this have to do with leadership? How much are we relying on the experiences of the past to deal with today’s challenges? Are we going about change alone or are we reaching out to others to help us develop new leadership attitudes? Is our business a series of disparate, misaligned goals preventing us from achieving our ultimate objective? These are questions all leaders should regularly ask themselves.

I recently read a quote from Fred Lebow, founder of the New York City Marathon, a race I’ve run twice who said, “In running, it doesn’t matter whether you come in first, in the middle of the pack or last. You can say ‘I have finished’. There is a lot of satisfaction in that”. As my son and I completed the triathlon, I had no idea where in the pack we finished but I do know we Started Steady and we definitely Finished Strong! Are your goals aligned for a strong finish?

Lead Well!

Rick Lochner

We Need 100%...

...From 100%

As a leader in corporate organizations, the military and small businesses, this was a frequent reminder to my organization we all have a role to play in our organization’s success. It also reminded them of the importance of showing up every day with everything they have to give, not just show up. Said differently, I was promoting full employee engagement by everyone in the organization. As we reviewed the four key elements of the Total Leadership Model these previous four months, it all centers on the level of engagement by employees, associates and volunteers who create the moments of truth and points of connection between the organization and those who bring you business.

Last month I referenced the results of a recent Gallup Poll survey indicating in average performing organizations, only 33% of employees are engaged in the business. This compared to world-class organizations where the exact opposite is true and 67% of the organization engaged in the business. In addition, in average performing organizations, 18% of employees were actively disengaged. This means that only a third of the organization cares about the activities contributing directly to employee retention, productivity, customer satisfaction/engagement, safety and profitability; all measurable dimensions of organizational success. Improving employee engagement has a direct effect on customer loyalty. Last month I mentioned even a 5% increase in customer loyalty can improve profits by 25% up to 85% depending on industry.

But what if you are a small or medium sized business with few employees? Does this matter? How engaged are the employees of your larger customers, especially the ones who implement your services, purchase your products and pay your invoices? If they don’t care beyond the minimum, how does that affect your business? Employee engagement impacts every business, large or small!

And it all starts with leadership. Jack Welch, former CEO of General Electric once said, “Any company trying to compete…must figure out how to engage the mind of every employee.” We define organizational culture as the shared values, beliefs and actions that develop within an organization guiding the behavior of its members. Employee attitude is where it starts for leaders because it is attitude that drives behavior and it is behavior that drives the ability to achieve the desired results of the organization. The behavior observed by your customers, suppliers and other employees forms the ongoing perception of your organization and your business. As you understand the market’s perception of your business, are you getting 100% out of 100%?

Lead Well!

Customer Satisfaction is Worthless...

…Customer Loyalty is Priceless.

This often quoted title from Jeffrey Gitomer’s book sets the stage for the fourth and final component of the Total Leadership Model. In a previous edition (11/09) of this newsletter, I introduced some general differences between satisfied customers and loyal customers. However, the real question becomes “How is Customer Loyalty a competitive advantage?”

Customers generate revenue, loyal customers generate profit. When I was leading corporate organizations, our customer and sales support teams worked closely alongside our sales teams. It was a relationship not always obvious or easy to manage, but one I always insisted on nonetheless. You see, while I was interested in the initial sale to a new client, I was even more interested in the second, third, fourth, nth sales. Why? Because I knew how important the follow-on sales were to profitability and creating emotional relationships with our customers. In industries where the core products and services are commodities, it was the power of points of connection, or “Moments of Truth” that drove ongoing loyalty within our customer base. Studies show as little as a 5% increase in customer loyalty can drive an increase in profits from 25% to over 80%. To highlight the power of moments of truth, another study showed that if an organization’s employees were 100% engaged, they would see a 70% increase in customer loyalty. Why is this significant? A recent Gallup Poll showed an average employee engagement level of 30%. Said differently, 70% of employees are disengaged creating an untenable gap in the ability to create powerful points of connection with their customer base and causing a direct drain on profits!

But who or what are we loyal to? We know when we engage in the Buying/Selling process, buyers look to buy you first before they look at your company or your products. They are looking to establish the first of the three components necessary to developing customer loyalty – trust. Whether it is you, the entrepreneur, you the corporate leader or you the member of a non-profit team, prospective customers and donors are first and foremost looking to see if they trust you! What is their first impression of you, your brand, your office or your website? What are others saying about you? These moments of truth become the catalyst to creating a consistent experience creating the second component of loyalty – a strong emotional tie with the customer. The third component of customer loyalty is the use of empathy to continuously and consistently meet or exceed an ever-increasing level of expectation in today’s business environment and strengthen the overall customer relationship.

It is the customer’s experience with you that counts. Peter Drucker once said “Quality in a Service or Product is not what you put into it. It is what the Client or Customer gets out of it.” Is what your customers are getting out of your products or services worthless or priceless?

Lead Well!

If You Can’t Describe What You Do as a Process...

…You Don’t Know What You Are Doing.

These words from W. Edwards Deming, considered the godfather of organizational process improvement, are a great way to introduce the third element of the Total Leadership Model. To put it in perspective, we previously introduced Strategy as the foundation of the model and last month discussed Leadership Development as one of the two key supporting elements of the model. This month we look at Operational Improvement, the Process side of Total Leadership, as the other supporting element crucial to being an effective leader in today’s business environment.

Everything we do in our organization be it public, private, non-profit, large or small is a process. Everything we do has inherent interdependencies with what happens before during and after each task and function we execute. And because each task and function we execute has an outcome, it becomes a point in which we can measure the desired results of that task or function. In Dr. H. James Harrington’s book, Business Process Improvement he puts it this way:

• “Measurements are key.
• If you cannot measure it, you cannot control it.
• If you cannot control it, you cannot manage it.
• If you cannot manage it, you cannot improve it.
• It is as simple as that.”

At this point, there may be those of you who may be thinking this is great, but I don’t operate in the plant or in operations where our products are made. In truth more than half of the Operational Improvement opportunities are in the traditional “front office” functions such as Sales, Marketing, Finance and Human Resources. Or there may be those entrepreneurs who run small businesses who think this is great for larger companies, but does not apply to small businesses. In fact, missing these opportunities for Operational Improvement likely has a much greater financial impact as a percentage of revenue than in the larger companies. It’s akin to thinking gravity does not apply to you because you weigh less than twenty pounds. All processes have very real financial impacts if not producing their desired results!

Today’s leaders see this as an opportunity to truly understand what they do in the context of a global business environment constantly evolving through regulatory, economic and socio-cultural changes. As a leader it’s not enough to merely invest in people in the organization if you are not also willing to ensure the processes they use are optimized for success. So, describe what you do again?

Lead Well!

To Be or Not To Be…

…Aye There’s The Point.

These famous and very recognizable words are from William Shakespeare’s Hamlet, Act III, Scene I. I chose them to introduce this month’s topic and did so in what many consider the original, or in our case, authentic form. Authenticity in a crucial element in what I call Real Leadership defined as setting goals and achieving desired results. I also like the way Bill George, former CEO at Medtronic, stated in a Fall 2006 article for U.S. News & World Report titled Truly Authentic Leadership when he stated “The only valid test of a leader is his or her ability to bring people together to achieve sustainable results over time. There is no such thing as the “One-Minute Leader” because real leadership requires years of development and hard work.”

So what makes a person an authentic leader? We all know everyone has the ability to lead and we know we all carry some value set we’ve learned from early childhood. It is the influence from both areas that create the dimensions of authentic leadership listed below:

➢ I recently had the privilege of meeting Tim Sanders, author of Love is the Killer App. During his presentation he reinforced the notion of knowing and following our Purpose with passion. Without Purpose we tend to lose our way as leaders, especially in the face of change and uncertainty. Authentic leaders lead with Purpose.

➢ Authentic leaders live their Values. Many have heard me say “What we believe-we think. What we think-we do”. When we have congruence between our Values (what we believe), our Attitudes (what we think) and our Behaviors (what we do) we lead with authenticity.

➢ One of the individual assessments used in our coaching practice helps clients understand the relationship between how they think with their head and their heart. Authentic leaders lead with both.

➢ We live in a networked world. In large organizations, the informal network may hold as much sway in the overall success of the organization as the formal organization identified on the organization chart. Individually we use technology to help us create and maintain our ever-growing social networks. Authentic leaders effectively leverage their personal power to create and maintain connected relationships.

➢ Self-awareness is an authentic leader’s greatest tool. It only stands to reason then that self-discipline is a key characteristic of an authentic leader to help them stay the course and on purpose when change and uncertainty look to derail them.

As we approach the holidays, many if not all will take the time to reflect on the past, enjoy the present and plan for the immediate future. In doing so you may ask yourself if you are living your purpose and your values to help others in your networks succeed. After all, authentic leadership of ourselves and/or others is what we should want to be or not to be – isn’t that truly the question?

Lead Well.

Rick Lochner

Does anybody really know...

-what time it is? Does anybody really care?

Many of you might recall these lyrics from the band Chicago from their hit song by the same name. As we work our way into the last few months of 2009 we and those in our organizations might be asking "Where did the time go?" or saying "2009 went by so fast!".

As leaders, time management is a crucial element of our success, especially at the rate of change in today's business environment. Many of us rely on a myriad of technology to keep us organized. Smart phones that sync to our email systems and integrate with our web or PC-based calendar systems are the norm these days. In spite of this technology as many as 75% of people do not have an effective system to manage their time. Technology, like any tool is only as effective as the people who use them. Success lies in how we think about our time as none of these tools actually manage our time. We manage our own time and it is our attitude toward time management that ultimately determines our success in doing so.

Consider, for example, a situation we all run into as leaders - meeting obligations and commitments. When we give our word to another person, we create the potential to succeed. When we keep our word to that person, we increase our own personal power as someone who is reliable and can be trusted on his or her word. This combination of potential and personal power leads to being a highly effective leader using the same 24 hours in a day that everyone else around them has available to them. Also consider what commitments and obligations your organization is making to your customers, suppliers and strategic partners. Is everyone in your organization realizing their personal power whenever they commit your organization? Does your organizational alignment promote that personal power by creating an accountable culture that respects the value of time? What are the most common excuses and how tolerant is your culture to being late for meetings or deadlines? How respectful are your sales teams for customers, suppliers and/or company time?

So what is the difference between these highly effective leaders and those who are not? Successful leaders do not manage their time for the sake of filling out their day. Successful leaders understand that time management is really goal management and they invest their time in the pursuit of achieving their goals. Without goals we end up using time, or in the more common vernacular, wasting time because the time we have has no immediate purpose. With goals we have a mechanism to prioritize our time and to ensure the right resources are doing the right tasks during a given amount of time. Time management is goal management and effective goal management gets to the heart of what makes a leader successful - setting goals and achieving desired results!

What time is it in your organization?

Lead Well

Rick Lochner

41% of small businesses are paying their employees…

…just to show up at work!

That is they are not held to any performance standard that somehow ties their paycheck to the results they are responsible for. According to a recent survey released last month by George S. May International 45% of the respondents also indicated their business is not profitable. Why do I mention this survey? Last month I introduced a survey from McKinsey & Company that suggested why larger companies with multiple layers of management might be struggling in this current economic environment. This month I continue the same idea and discussion with smaller businesses (annual revenue between $1M and $200M) as the backdrop.

More specifically, the discussion goes to the critical leadership function, for companies large and small, of successfully setting goals and achieving their desired results. Not only were 45% of the surveyed companies not profitable, the same percentage of companies did not have specific and measurable goals for their employees. This creates a leadership challenge when the correlation is clear between having specific and measurable goals for employees and the impact it has on profitability.

So why do so few businesses have specific and measurable goals for their employees? Again I offer three reasons why this may be the case based on my own experience.

Lack of Vision for the Business – Many small businesses make it up as they go by reacting to the ebb and flow of their specific industry and customer base. However, without a clear direction of where the business is going, as the Cheshire Cat in Alice in Wonderland said, “…any road will take you there”. The view of what the business is doing is typically through the rear view mirror.

Ill-defined Strategy – Strategy reflects the competitive direction of a business. How does the business compete in its industry? An ill-defined strategy creates a scenario where there is little to anchor organizational or individual goals to. The uncertainty of what is happening in the industry and with the competition makes it very difficult to establish SMART (Specific, Measurable, Attainable, Reasonably High and Time-Bound) Goals for employees and align them to the business strategy.

Measuring Activities versus Results – Even if a business has established goals tied to an overall strategy, if they can’t measure progress the negative outcome is the same. It is important to ensure the business is tracking and measuring results and not activities and doing so in a manner that yields new knowledge as opposed to restating or repackaging existing information.

How do your goals reflect your business strategy?

Lead Well.

Rick Lochner

Are we there yet?

How many times have we heard that refrain from our children (or maybe from our significant other!?!) when their impatience got the best of them? Or maybe we’ve said it ourselves in different situations for the same reason. In most cases, it is because they don’t have a sense of time or speed relative to setting correct expectations of arrival.

In the business sense, whether for-profit or non-profit, we find ourselves either half way through our operational year or possibly just beginning a new one. We are likely compiling data telling us how well our business has performed over the last 6 months because of that natural halfway or transition point. Or are we? This issue focuses on the all-important role of measurements as a crucial element of effective business alignment. We are talking about not only what we measure on a regular basis, but also how we measure what we do in order to make informed business decisions.

The first place to start is to be clear on what we are capturing and the usefulness of what we capture. There are essentially 4 levels of “stuff” we measure, Data, Information, Knowledge and Wisdom or sometimes referred to as the DIKW Hierarchy. Like many topics in and around leadership, much has been written about these 4 elements so I am going to focus on the salient points of each.

• Data is what we measure directly. It is raw in nature and is the least useful element to making the level of business decisions we need to run our business.
• Information is organized Data. In a practical sense this means we import all the available data into a spreadsheet or database and sort or index the data to make it more useful to making a meaningful business decision.
• Knowledge is Information in context. While Information is useful for many business related decisions, its usefulness is limited without the context around the Information gathered. Knowledge allows us to make informed strategic decisions.
• Wisdom is Knowledge over time. When we apply Knowledge over time we create an environment in which the learning of the organization is exponential due to the richness and usefulness of each decision leading to even more useful outcomes.

So it stands to reason that addressing the Scientific Methodologies in the Business Alignment Model creates an overt means to know if we are capturing the right elements to validate organizational progress. More succinctly, it helps an organization determine if it’s making strategic decisions based on information or knowledge.

As an example, Organization A captured data from expense reduction efforts and compiled the data in a spreadsheet to see if it reduced their expenses to meet a specific target. Organization B also captured data from expense reduction efforts and compiled the data in a spreadsheet in similar fashion. However, organization B will also ensure there were minimal reductions in area critical to its long term Vision and Strategy with the balance coming from less critical parts of the business. Organization A made strategic decisions based on information, potentially crippling their future with across-board-reductions. Organization B made knowledge based strategic decisions and did not lose sight of the contextual impact of their decision. Which organization do you work for?

Lead Well.

Rick Lochner