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!

We Can Learn a Lot about Total Leadership…

…From the Super Bowl Champion Green Bay Packers.

As is tradition, the February issue of this newsletter highlights the reigning Super Bowl champions. Hopefully, the mere title of this newsletter does not cause most of my hometown Chicago readers to automatically delete this file before reading at least a few sentences! While the intensity of the Packers-Bears rivalry marches on, we can glean leadership lessons from the way the Packers became only the second team seeded last in the playoffs to go on to win the Super Bowl. As I watched the playoffs unfold, the back-stories kept taking me back to the Total Leadership Model described as the alignment of organizational strategy with its people and processes to fully engage the organization with the expressed outcome to create loyal clients.

Strategically, the Packers mantra for the season was adaptability. They had the most players on injured reserve (15) of any NFC Team in the league last season. They made the playoffs seeded last, meaning they would have to play three games on the road just to get to the Super Bowl. That meant their strategy would have to take those realities into account to achieve the desired result of winning the Super Bowl. How many leaders today misjudge their competition due to changes in the competitive landscape or mentally defeat their efforts because the competitors are bigger, better funded or both? Effective strategies are built on accurate assessments of the external environment and of the strengths and weaknesses of the organization. For the Green Bay Packers, these strategies and associated philosophies generated more championships than any other team in the league including four Super Bowl titles.

In the Total Leadership Model, People Development and Process Improvement are aligned to support the organization’s strategy. For the Packers, this meant fielding skilled players (changing week-to-week due to injuries) and processes (play-calling to optimize the changing roster) to support and align with the current strategy. In any business, the people and processes may fluctuate over time. The real differentiator in success is Attitude, especially down the stretch. Much is made of home-field advantage in sports and it could be argued the Packers were not always the most talented all around team on the field in Philadelphia, Atlanta, Chicago and Dallas. In the end, it was the team that believed in themselves the most that carried the day, even when two more of their starters, and emotional leaders, were lost to injury in the first half of the championship game. Successful leaders create and execute strategies to optimize the strengths of their people in full alignment with the core processes they use in their businesses.

Total Leadership is about creating loyal clients through engaged employees. It is in this regard the Packers are unique among NFL teams. Despite playing in the smallest NFL market, they have one of the largest fan bases in the sport and have more names on their season ticket waiting list than there are actual seats in Lambeau Field where they play. Leaders may talk about client loyalty but fewer put forth the time and level of effort required to create this level of loyalty and pride in their organizations. Engaged employees are the basis for creating loyal clients, concepts that look much like the traditional training camp bike rides and Family Nights of the Green Bay Packers.

I had lunch last week with a business owner who created a very successful business after coming to the U.S. over twenty years ago. When I mentioned the topic of this month’s newsletter she told me about how, in her frequent travels, she carries a book about Vince Lombardi to read his quotes and philosophies whenever she flies. What will it take for you to generate that level of loyalty and be the champions of your business?

Lead Well.

Change Occurs...

…At The Outer Edge of Your Comfort Zone.

As we wind down 2010, many of us are reflecting on what we accomplished in 2010 and what changes we will make to continue our successes into 2011. In my own work with small and medium businesses as well as non-profit organizations, managing change is the most common topic of conversation; and why not? The uncertainty that remains in the economic and political environments have leaders in the unenviable position of making the next right strategic decision in the face of all this uncertainty.

How do leaders mitigate this uncertainty enough to make the crucial decisions before them? While there are many moving parts to a successful business strategy, two elements of leading any organization is understanding the general environment you are competing in as well as knowing how your current capabilities match up to that environment. Key to a leader’s strategic thinking process includes a recurring assessment of their general environment against six different factors: Demographic/Psychographic, Economic, Political/Legal, Socio-Cultural, Technical and Global. Regardless of whether you lead a global organization or do business directly with the government, all six factors will influence your ability to adapt and evolve your business. As I briefly outline each factor below, ask yourself how they impact your business, non-profit or corporation.

• Demographic/Psychographic – we are already seeing debates around the impact of the new census results and the changing demographics of the US population. Psychographics reflect the personalities, values, attitudes and lifestyles of the population.
• Economic – while the recession may be over, businesses generally are still taking a cautious road ahead having a direct impact on the economic recovery. As you assess your own organization’s economic health, how did your supply chain and value chain fare as well?
• Political/Legal – all eyes are on Washington DC these days to gauge the impact of Congress’ decisions and how they influence the current level of cautiousness across the business landscape. How are current federal, state and local budget gaps impacting your organization?
• Socio-Cultural –We see more and more organizations hiring temporary workers, even in management and other predominantly white-collar positions. How “Green” is your organization?
• Technical – an article in the 12/20/10 Wall Street Journal opines how Dr. Seuss would love the e-Readers because they enable children to read more effectively. While technology is changing at a rapid pace, is it effectively advancing the way you conduct your business?
• Global – you may not be a global business, but events around the globe impact your business instantaneously. Have you figured out how and why?

While understanding the general landscape provides today’s leaders with a current view of their external environment, it is only useful if put in the context of their business. The tool most often used for this aspect of the strategic thinking process is the SWOT (Strengths, Weaknesses, Opportunities and Threats) Process. This assessment of the internal environment captures the current capabilities (strengths and weaknesses) and puts them in the context of the external environment (opportunities and threats). While the SWOT is a very versatile tool used to help leaders proactively deal with changes in their business, they must keep in mind it only provides a one-shot view of a moving target and must be used routinely to be effective. Additionally, because we identify an organizational strength through the SWOT process does not mean the strength represents a competitive advantage.

We know change is inevitable, but growth in our business because of the change is not. Leaders must constantly assess which way the winds of change are blowing and adjust their strategy accordingly. I am reminded of the closing scene in The Truman Show when Jim Carrey’s Truman finally makes it to the outer edge of his known world. After a brief dialog, Truman opens the door, literally and figuratively, to a whole new world of possibilities. When you get to the outer edge of your comfort zone, are you prepared to open the door to your new possibilities?

Lead Well!

Information is Knowing a Tomato is a Fruit…

…Knowledge is Knowing not to put it in a Fruit Salad.

In a previous edition, we discussed the relationship between Information (organized data) and Knowledge (information in context). I bring it up again not to highlight the contents of a fruit salad, but to highlight a much more crucial issue for leaders – timely decision-making. In my work with leaders, we describe the first two steps in the decision-making process as 1) Identify the Issue and 2) Gather and Analyze Information. The decision-maker must properly define the scope of the problem, situation or challenge in enough detail to create tangible alternatives. They must also gather the right amount of the right information to make a knowledgeable decision. (click here to continue reading)

Information overload is not a new challenge. Lucius Annaeus Seneca was a Senator and Adviser under Nero in the early part of his reign. Seneca was a prolific letter writer whose thoughts, insights and convictions were well read throughout the literate Roman Empire. Even in his day, he noted the issue with connectedness by observing “the danger of allowing others – not just friends and colleagues, but the masses – to exert too much influence on one’s thinking”. Without mentioning these words were written around the time of Christ, you could easily assume it was written recently.

To the decision-maker, it is no longer just a task to find the relevant information to use, but to weed out and discard the unnecessary information and do it at the speed of competition. No easy task when the amount of information available to us doubles every 9 – 10 minutes (depending on which study you read). The proliferation of Twitter, blogs, Facebook and texting contributes to this informational tsunami. They also create a greater challenge analyzing the volume of information as messages become shorter and cryptic (Twitter reports over 2 billion tweets a month) at the same time ensuring they are factually correct. We now get billions of messages just to tell us someone, somewhere created a message earmarked for us to read. Last month, AT&T sent 1 billion such messages over its network up from 400 million a month 11 months ago.

As I look at the impact this phenomenon has on our decision-making process as leaders, I see less contingency planning due to the instantaneous nature of technology and less reflection on the meaning of information to create sustainable knowledge. I recently observed a customer in a local Subway sandwich shop dictating multiple orders to the person making the sandwiches. After each order he went back to his phone for the next order. I wondered to myself if that person were in a business environment and had to remember multiple facts, would that be his way of managing information?

Seneca wrote “Elite, literate Romans were discovering the great paradox of information: the more of it that is available, the harder it is to be truly knowledgeable. It was impossible to process it all in a thoughtful way.” As leaders striving to make effective knowledgeable decisions about your business, how many tomatoes are in your fruit salad?

Lead Well!

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!

Lead, Follow…

…or Get Out Of The Way.

This well-known quote from Thomas Paine serves as the basis for the second segment of the Total Leadership Process. Thomas Paine has been called the Voice of the Common Man and as such serves as a backdrop for the People aspect of Total Leadership. Last month, we established Purpose as the foundation of Total Leadership revealing itself through the organization’s Vision and Strategy. This month we invoke the People aspect of Total Leadership as we look at organizational development processes organizations use to determine who can communicate the strategic objectives, execute those strategic objectives and provide feedback on progress made on the strategic objectives. In other words, how are organizations developing leaders at all levels of the organization? (click here to continue reading)

In today’s competitive and turbulent, fast-moving economy developing the right leaders becomes an imperative for survival of the business, whether for-profit or not-for-profit. In much the same context as my comments last month where previous strategic assumptions are likely not to work in our current economy, so too are the attitudes and methods traditionally used to develop leaders called into question. We can no longer assume leadership is about possessing certain personal characteristics but rather about the ability to set goals and achieve desired results.

So what does this mean exactly? It means we have to get beyond the development process that assumes if you grow certain leadership qualities in people then somehow this will positively impact operational results. Too much time, money and energy is wasted creating a yardstick of designated leadership characteristics only to find they are yesterday’s news based on the fact changing external and internal forces for change all organizations face. It becomes a journey of hope that is no more effective in today’s market than the “Field of Dreams” (build it and they will come) business strategy.

The solution is all about defining and justifying leadership development on the tangible outcomes it is intended to produce. It drives a strategy focused on the desired results and then grows and develops the people (and processes) to realize those results. As Peter Drucker so aptly stated, “Leadership is all about the Results”.

The challenge with this solution is it assumes the People development process throughout any organization is aligned to its Purpose. This is true regardless of the size of the business or non-profit organization. Is the Leadership Development process in your organization linked tight enough to the Vision and Strategy so when the Strategy changes to adjust to the post-recession economy your organization automatically adjusts the leadership development to develop new skills to deliver new results? If not, are these leaders really leading or are they just in the way?

Lead Well!

You Cannot Control The Wind…

…But You Can Adjust The Sails.

These words to the Ricky Skaggs song Can’t Control The Wind are a great entrée into the first of four monthly segments on the Total Leadership Process. These particular words came to mind as I was reading a recent Fortune article about Larry Ellison and the BMW Oracle Racing Team returning the America’s Cup Trophy back to the United States after a fifteen-year absence. His thoughts on the victory centered on the right combination of technology, sailing skills and strategy.

Strategy is the focus of this segment as it forms the foundation of the Total Leadership Process and reflects the Purpose of the organization. In actuality, the organizational Purpose is a combination of Vision, Values, Mission and Strategy but it is the Strategy that determines how the organization will compete in its current market and industry. Understanding the importance of this definition is crucial as the competitive landscape and assumptions in every industry are changing.

What strategic assumptions worked when economic and industry growth rates were 10% - 15% before the recession will be different in the 2% - 3% growth economy of the next several years. Likewise, targeting double-digit growth rates will require different strategic assumptions than in previous years where that level of growth was not the norm. A strategy setting a path to 12% growth year-over-year sounds good at face value. However, if the industry is growing 15%, the strategy loses market share.

Like the wind challenges sailors, we may have difficulty totally understanding and reacting to the competitive landscape. Some events we can see well in advance. The recent healthcare reform legislation was announced well in advance, enabling organizations to think through various contingency plans on how to react to the final version. In effect for less than a week, several large companies already announced changes as a direct result of the new law.

Other competitive events are not well known, yet must be anticipated in order to put forth a reasonable strategy for success. Most of us cannot accurately predict the future. But the issue is not to predict the future; it is to prepare for the future. Successful leaders continuously run scenarios for their market or industry helping them adapt quickly to their changing competitive landscape.

With so many changes happening at an ever-increasing rate, do you have a means to capture what your market is telling your organization every day in a way that is meaningful to the contingency scenarios relevant to your strategy? Ask yourself how much time your organization spends managing the past versus navigating towards the future. If we drove our cars the same way how much progress would we make?

When the wind changes direction, which way will your crew be facing?

Lead Well!

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

The Art of Progress is the Preserve Order amid Change...

- and Preserve Change amid Order"

This quote by Alfred North Whitehead symbolizes the leadership challenge faced by businesses of all sizes and industries in today's competitive economic landscape. The implication in this quote is the balance required maintaining some measure of order in business organizations and plans while at the same time identify and execute change strategies in order to achieve real progress. My experience suggests many businesses are doing one aspect of this process well but struggling to do the other and/or both to full effectiveness.

So how does today's leader manage order and change simultaneously? The answer lies in the business Strategy. Simply stated, your business or organizational strategy dictates how your business or organization competes in its industry and markets. Having created strategies in businesses from large corporations to small entrepreneurial, mature and start-up, for-profit and non-profit, I find this definition of strategy to hold true universally. The strategy is a by-product of the leader(s) taking an objective and in-depth look at their external environment in order to create the Vision I spoke of last month. It also holds the results of an unbiased view of the business or organization's internal capabilities identified through a detailed SWOT (Strengths, Opportunities, Weaknesses and Threats) process or similar assessment process. What the Strategy looks like in the practical sense is a series of goal categories (also referred to as strategic objectives) determined to be critical to the business in a competitive environment.

It is not enough to just have a strategy as a stand-alone document. It must also link both the business goals and the vision of the business to be effective in the context of creating real progress. Linking the strategy to business goals is accomplished through the creation of specific goals from each of the critical goal categories identified in the strategy. This alignment typically represents managing "order amid change" in the opening quote. Just as important is the linkage of the strategy to the vision of the business. This alignment ensures the critical goal categories are relevant to the overall direction of the business and/or organization. If you cannot articulate clear alignment between current strategic objectives and the direction your business is going, the competitive markets will take the business where they want it to go. In essence, without direction (read: control), any road will look like a valid one! This represents the managing "change amid order" element of the opening quote.

Organizational movement can just happen and be confused for progress. Real progress requires a strategy that is both linked to the vision and the specific goals of the business to be effective. Last month I spoke of two types of leaders during times of challenge and change. The first are those who are busy managing order. The second types are creating real progress!

Lead Well

Rick Lochner