Celebrate your mistakes!

How do you teach your work force that mistakes are OK as long as they learn and don’t repeat them?  By being a visible example.  A friend and fellow CEO states that he publishes each of his mistakes in his company internal blog along with the lesson he learned.  “If the CEO can do this, he gives permission for anyone to confess as well,” he states.

You may not know it but the National Transportation Safety Board has for years offered a reporting program for pilots, air controllers and others involved in aviation safety.  Anyone Einstein_Never_made_mistake_quote-231x300reporting an accidental safety error (such as flying into restricted airspace) within ten days is granted immunity from FAA prosecution, as long as the mistake was not an intentional breaking of the law.  Even NTSB understands that mistakes are learning experiences as it insulates accidental infractions from prosecution in order to learn and solve problems communally.

What is your culture?  Do you respond to an employee mistake with a warning or even punishment?  If so, it is a sure thing that fear will cause your employees to hide them, cover them up with quick fixes if possible and worry over the consequence of creativity efforts or of pushing the envelope a bit.

Doesn’t the whole enterprise fail a bit each time a learning opportunity is lost or someone hides actions from management?  And what does it say about your corporate culture and your individual management style?  Even if you condone the overreaction of others in management, aren’t you then guilty of reinforcing such a culture of punishment over learning?

Celebrate your mistakes.  Others will follow.  All will learn to share for the sake of safety, growth and open culture.

Posted in Depending upon others, Protecting the business, Surrounding yourself with talent, The fight for quality | 4 Comments

Why bother to sit in with customer service?

Over fifty years ago, I was CEO of a record manufacturing company in Hollywood.  We were the only such facility on the West coast to provide and control the entire process from studio, through finished vinyl record pressings in the same building, therefore able to promise quality control others could only dream about.

As founder and CEO of the then public company, I was expert in several of the “clean” processes such as studio recording, record mastering, cover design and photo–Lead-and-learnlithography.  But if I knew then what I know now, I would have spent time working with my employees in each of the subsequent and more mechanical processes such as printing press management, record press management and shipping control in order to better learn my own business and hear first–hand suggestions from the line.

I lost an invaluable opportunity to learn from the front line.

[Email readers, continue here…]  Later, as CEO of a fast growing computer software company with over thirty employees in customer service alone, I did learn the lesson, as I sat in on customer service calls on occasion to get a more complete understanding of the process, pressures and opportunities for improvement.  Then, when my manager of customer service sent a request up the line asking for funds for equipment or expanded staffing, I would understand the need, sometimes offering suggestions for improvement to try before making the investment.

It had taken years to learn that empathy comes from experience, not just perceived understanding.  And that there is such a thing as a business leader showing empathy while making good strategic decisions.  I learned that employees appreciate knowing that their executives have experienced and can understand their world.  I learned that tough decisions, such as denial of a request, are better received when all affected know that there was a deeper understanding of the issue and reasons for the response.

All because I learned to sit in and understand the position, the workflow, and the challenges at each stage in the process of customer service.

Are you too busy to learn each step along the corporate process enough to understand issues and challenges?  Start by sitting in with customer service.  The benefits are immense.

Posted in Finding your ideal niche, The fight for quality | 3 Comments

Careful with terminations. Don’t disparage.

It happens all the time when you’re a CEO.  Somebody important leaves or is let go, and you worry over the impact upon remaining employees and customers.  You worry that the person leaving will begin to unload all the pent–up garbage from the past, perhaps damaging the company and causing customer defections and even employee unrest.

Your worry is real.

It is human nature for those remaining to blame the departed employee for any sort of sins Employee-terminationfrom the past, real or imagined.  And it is human nature for the person now free of the company to attempt to explain why the departure – in the most flattering personal terms possible.

But in my experience, many of these ungracious outbursts lead to anger, threats and reprisals – all unhealthy for both the individual and the company.

[Email readers, continue here…]  I was able to mute these on both sides in my past life with two simple efforts of outreach.  I’d call in the departing employee, even those with the worst violations “for cause,” and offer an unemotional exit interview asking for their thoughts about their experience – no holds barred. Then, I’d remind each that it is more than just possible that someday we’d meet again, perhaps as supplier–customer, customer–supplier, industry resource or friendly competitor.  Therefore, we should make a genuine pact:  neither of us should give in to temptations to disparage the other no matter what the personal psychic gain.  Shaking hands after such a promise sealed the deal, even with those you’d rather never see again.  And it worked with great effect.  Even today, many years later, former employees who departed during my tenure, find me at trade shows and other industry events, telling me that their experience with us was the best they’d ever had with any employer.

The second thing was just as important.  With the person leaving (for whatever reason) in tow, I’d show up in that person’s department, call a quick meeting, and make the same statement about non–disparagement to those present, addressing their natural inclination to later blame as part of the short talk.  When warranted, a quick celebration including the department employees sealed the deal.

Then there is the formality of codifying this.  Every termination should be accompanied by a termination agreement or release before final payment. It should contain terms of separation, reminder of confidentiality, and a non–disparagement clause.  It’s a contractual reminder that can be used if needed.  Using the techniques above, I don’t recall ever having to do so.  May you be as lucky in your efforts.


Posted in Protecting the business, Surrounding yourself with talent | 3 Comments

Is ‘servant leadership’ too soft for today’s workforce?

It’s a term rooted in ancient philosophy.  Robert Greenleaf may have been the first to resurrect the concept in his book published in 1970.  Not quite as bold as inverting the management triangle, the concept of servant leadership requires that a business manager focus upon his or her people’s highest priority needs first.

The question begged by the headline above is whether this form of leadership is perceived as soft, indecisive, and inappropriate for the fast–moving world of today’s business.

A servant leader uses a participative style of management, as opposed to one that is Servant_leadership1autocratic or (at the opposite end of the spectrum) laissez–faire.  More important, a servant leader involves employees in the process of decision–making, focusing upon the performance and satisfaction of employees.

Doesn’t sound tough or forceful enough for you?  You are not alone.  It is a very thin line between abdication of responsibility and participative leadership.  The world loves bold leadership.  Steve Jobs, who was known to be in charge of each detail in design.  Elon Musk, who obsesses with metrics and constantly asks for employees to feed him their concerns but makes bold moves on his own.

[Email readers, continue here…]  In technology–based enterprises, the question of leadership vision becomes mixed with leadership style.  Can a visionary leader abdicate the execution of that vision by subordinating to those who carry out the execution of that vision?  Or must he or she be more like Jobs or Musk and stand in the center of the storm, constantly testing the execution efforts of those around?

There is a place for a leader as servant.  But the perception of that leader being soft and lacking in strong leadership traits is the sure result of using this method as the leading style for a CEO.   It is fine as a secondary style used in tactical decision–making, when strategic issues are not the focus, and where threats to corporate health or resources are not evident.

But those leaders who will be remembered as having changed the world, even if the world is defined as within the walls of one enterprise, are those who were clear in their ability to communicate urgency, quality and focus upon the customer – not necessarily those who delegated the best or allowed decisions to flow from management concurrence.

Posted in Depending upon others, General, Surrounding yourself with talent | 5 Comments

Is management by walking around an outmoded fad?

One of the CEOs I coach starts his day by walking the floor of his extended facility and checking in with managers and employees of the various departments, especially the call center.  He tries to feel the pulse of the company by the intensity of motion, the metrics of backlog, and the stated problems brought to him as he asks.

Is he a relic of bygone times, when employees worked in a single facility, managed directly Management-by-wandering-aroundby people who could see and speak to them in person?   In this age of remote work forces, self–managed contractors and employees, outsourced call centers and development, is this a dying art?

And does the presence of a caring CEO taking the time to check in personally change anything after the waves of his or her presence pass in the calm of departure?

Well, yes.

[Email readers, continue here…] Everyone knows when the CEO or senior manager stays in their personal office, especially when closing the door, that “something must be wrong” or “the person doesn’t care enough” or “what does he or she do all day?”

It is more than showing the flag when a manager or CEO spends time focusing upon the immediate issues of subordinates and offers resources to solve problems without the need for formal meetings.  It is a mark of corporate culture when everyone knows that those above are serving them in very visible ways by taking the time to hear and react.

But there is something more. A good manager can feel the mood and the level of business activity, but not easily from behind a desk or on the other end of a phone call.

It is one of the reasons that senior managers who travel to the workplace from afar and show their presence only several days each week are not as effective as companies grow and span of control increases.

Does management by walking around still work?  Is it as valuable as it once was before our communications systems became so complex and well defined?

Yes.  Yes. And yes.

Posted in Depending upon others, Surrounding yourself with talent | 4 Comments

Stop managers from gaming the system

Business unit managers are under lots of pressure to perform, and occasionally are tempted to step over the line finding ways to look better than reality reflects.  Of course, this has never happened to you, and you have never done this in your past.  So we are speaking of a theoretical manager here.  Of course.

Here’s a way to prevent such behavior and create a tool for organization – and transparency at the same time.  Create a “balanced scorecard” or single place to review a Gaming_systemmanager’s performance and / or that of the department.  Use the four most important measures of success as the basis.

Financial perspective:  financial statement showing key indicators such as revenue, expense, net income or other measures important to success.

Customer perspective: Ratings of customer satisfaction, statistics of customer retention, market share and even brand strength.

Internal process perspective: Measures of cycle time, response time, waste, purchasing effectiveness, and improvements and innovations.

Learning / growth perspective:  Measures of employee satisfaction, employee turnover, employee education and skill advancement.

[Email readers, continue here…]  Having this information and sharing it with the manager(s) empowers everyone to come up with solutions to problems, emphasizes common focus upon strengths and weaknesses, and eliminates surprises when formally reviewing performance.

You’d probably be doing many of these processes anyway, just not aimed at assembly into a single file or report for review by all.  And this might be the prod you need to increase the quality and perhaps the quantity of customer and employee surveys.  A real win for all.

Posted in Depending upon others, Protecting the business | Leave a comment

Hire for talent. Rent for experience.

Want the best way to create your core competency quickly and inexpensively?   Think like a startup, with little resources, a limited window of time, and few dollars to spend on expensive experts.

This insight comes from a fellow CEO who explains that he leverages his financial resources for growth by dividing his hiring decision into these two boxes.  He interviews hire-for-talentfor adaptability, creativity, intelligence, drive, and a cultural fit.  He believes that he or his managers can teach processes, taking advantage of the new hire’s fresh look and open mind.  He believes that the core of his company is the creative process, and therefore that must be his focus.

Then he turns to contracted outsourcing for his routine processes, those that require no creativity and are repetitive in nature.

[Email readers, continue here…] He cites the example of computer programmers.  He hires for creative ability, people who can be the architects as opposed to the simple coders of routines.  If properly supervised and quality controlled, he finds that it is easier and cheaper to parcel out projects to programmers or programming groups to perform the actual coding of projects pre–defined by his insiders.  He divides the tasks so that no subcontractor has all of the core knowledge in house as a protection against theft of intellectual property.

And he concentrates on the management of creativity, the core of his business.

There are obvious advantages to this.  Costs are variable and can be curtailed easily in tough times.  Management time is focused upon the creative aspects of the business.  On the other hand, depending upon the length of a project, an inside employee may be cheaper in the long run, and quality control easier to manage.

Business management is a series of trade–offs. Here is one to consider carefully as you leverage resources including cash to grow the business.

Posted in Depending upon others, Surrounding yourself with talent | Leave a comment

A riddle: Why explain why?

In my early journalism classes, I was taught the five “W’s” of good news stories, and that most should be in the first paragraph at that.  Who, what, when, where and why are the five, with sometimes a “how” thrown in for those followers of the macabre.

But of the five, “why” is by far the most important for business leaders to consider and whycommunicate.  Employees, contractors, even investors want to know why they are asked to make use of their valuable resource to support your effort.

Failure to explain why will scare away potential investors – other than closest friends and family.  The same failure will disenfranchise your workforce to a degree that most will give less effort to a project, and certainly with less enthusiasm.

[Email readers, continue here…]  Especially if a company is in trouble, perhaps with an urgent need to make a deadline, or facing a cash crisis caused by something your employees can help control, explaining the importance of the action required empowers all to work smarter and harder to achieve the stated goal.

I’ve recently experienced an example of this. One of my companies where I have an investment and am on the advisory board was in the midst of a sprint to close its acquisition by a larger company before the cash ran out and enterprise value plummeted.  Do you tell the employees about the pending acquisition early in order to focus them on increased performance to increase cash flow, or just keep the secret and hope that all would turn out OK and the acquisition proceed to an orderly closing on time?

We chose to tell the employees, with the obvious risk that some would be scared into looking for another job right in the middle of the acquisition process.  The effort worked, and all did come together to make it happen. No–one jumped, and the buyer closed the deal without a question.

When in doubt, don’t be shy.  Tell them why.  Your people will rise to the occasion.

Posted in Depending upon others, Surrounding yourself with talent | 3 Comments

Are you the leader if no one follows?

Here is a variation of the “tree falls in the forest” question.  In past insights, we’ve looked at leadership skills, ways to enhance effectiveness, and how to develop creative ideas that motivate and propel your organization to greatness.  Here is the ultimate question for a leader…

You’ve heard the old saying that you can lead by fear or lead because people want to follow.  And you can lead by example as well.  Which works best in the long run?

outlierinnovatorsI know from observational and personal experience that in normal situations, a leader is a consensus–builder, sure that everyone understands the mission and goal, and knows which duties each must assume to make it happen.  There are times when this obviously isn’t appropriate, such as in an emergency, financial or physical.  Then your associates will expect strong, firm leadership as reassurance.

[Email readers, continue here…] Even in the military, the best leaders, no matter what the rank, lead by consensus and by example – except perhaps in battle. Those in any enterprise who lead by fear find that they may be effective in the short run and completely the opposite over time.  Yes, there have been military dictators rising on occasion who did lead by fear.  Most all lost their positions, their following, and some even their lives.

The object is to have people follow, willingly.  Sometimes we call this “servant leadership,” the skill of subordinating yourself to the greater good, serving those who serve your customers or constituents.

Here’s a simple test.  Do your people come up to you as you walk among them, or lower their heads, turn away, or find a way to look extra busy?  Even if you think otherwise, if your constituents do any of these things other than look up or approach, you should identify this as an indication that you are a leader using fear.

It is never too late to change, even if it will take many interactions for your people to believe the impossible may have happened.  And if you are the charismatic leader that people follow willingly, keep on doing what you are doing.

Posted in Depending upon others, Surrounding yourself with talent | Leave a comment

What can you buy for an extra $1 million?

Dave’s note:  Here comes my favorite “tell-it-like-it-is” CEO, Kim Shepherd, with another of her “crazy” (meaning excellent) ideas to pry innovative ideas from associates.  Does the headline grab your attention?  Read on…

By Kim Shepherd

What can your department or company buy if it had an extra million dollars? The quick answer is: a whole slew of great ideas. And, surprisingly, those ideas might not cost much at all – in real dollars. Here’s how I came to this insight.

100000 dollar billAs you now have read, our company is a 100% virtual firm, so our annual all–staff meeting is hugely important. At a recent one we organized into tiger teams, small cross–functional groups of people who brainstorm intensively around a specific topic. Each group had the same topic: if you had $1 million to spend on improving the company, how would you spend it?

We certainly don’t have a million bucks lying around, but the tiger teams went into high gear and filled a dozen flip–chart pages with some great ideas. Once the leadership team consolidated all those ideas, we realized that 80% of them could be implemented without spending a penny. The ideas included process changes, time management tips, performance motivators, and more. And no team spent the entire $1 million.

[Email readers, continue here…]  Removing the limitations and confinements of the brainstorm opened the idea floodgates. Raising moneyThink about it: imagine you went into a tiger team meeting and said, “We have $3000 to invest in improving the company. How should we spend it?” Before the creative juices even start flowing, you’ve put a box around everyone’s mind. They’re focusing on cost rather than ideas. Even if you encourage them to think outside the box, you’ve already got a box.

Granted, with $1 million, you still have a box. But for most of us, a million–dollar box is so big that just about anything is possible. If you are an $80 billion global corporation, you might need to use $1 billion for this exercise, and lucky you. One way or the other, the goal is to eliminate any boundaries or restrictions.

A couple of extra value–adds: this approach makes the exercise fun, as no idea is too crazy – and we heard some crazy ones. In addition, brainstorming is a team–builder. Not only do people feed off of one another’s energy and become more and more engaged, but they also gain a glimpse of each other’s thinking and values.

So you could say that spending $1 million could be free. The ideas you get, however, might be priceless.

Posted in Growth!, Surrounding yourself with talent | 2 Comments