Playing to Win

Over time, I have noticed an interesting behavior in leaders that largely determines the culture of their organizations as well as the long-term success of that organization.  It is simply this:  Are the leaders playing to win or are they playing not to lose?

One would think that the difference between these behaviors is immediately apparent.  Unfortunately, in my experience, the difference can be subtle and easily masked.

Some things to look for to determine how you and your team are leading include:

1. In the end, does decision making reside in one or two people at the top of your company?  Even for the seemingly small decisions?  If so, it is likely that the level of risk aversion is high and that risk is being concentrated to make sure no big mistakes are made that lead to losing.
2. Are project ideas and recommendations to create new lines of business caught up in red tape, infighting, excessive business reviews to determine progress (to the level that you plant the seed, watch the sapling come out of the ground, then dig up the plant to check the roots to see how it’s doing?) and a list of “Why are you doing it this ways?” as long as your arm?  Such behavior is often used to avoid failure of the big idea by sabotaging it before the risk grows too large.  The end result is the idea dies in the swamps on the way to the battlefield and never gets the chance to grow or fail spectacularly later on.
3. Does your leadership team fall comfortably into a litany of excuses about why something cannot be done?  Do any of these phrases sound familiar?  We tried this in 1998 and it didn’t work.  Remember John, he went down this path and was fired for his trouble.  We don’t have the people, time, money, IT support, or space to do this.  We are putting the quarter at risk if we spend this money now.  We are in the middle of a recession.  (Your own phrase here _________________)
4. Does most of the leadership conversation focus on internal processes, organization chart re-arrangement, and responding to home office questions?  Or does your conversation focus on external processes that serve the customer, understanding root causes of customer satisfaction and dissatisfaction and creating experiences that capture increasing share of wallet in every transaction?
5. Does your team focus on a common enemy – a competitor – and build strategies to beat it or does your team focus on a mantra or vision that changes the world or at least the market in which you play?  The latter leads to a sustainable business.
6. Is your organization in a “prevent defense?”  Are you trying to be as conservative as possible in order to hold on to market share rather than developing and delivering exceptional products and services to your existing customers to make them raving fans?
7. Are leaders more interested in looking good or getting better?  Leaders who are playing to win focus on an honest assessment of current reality, whatever that reveals.  They then work to improve the chances that they and their organizations are prepared to lead the way in their markets.  Leaders who are concerned with looking good tend to want to save face at any cost.  This type of behavior destroys trust in an organization and leads to resentment when other team members are thrown under the bus when mistakes happen or results fall short of expectations.

How we decide to lead is up to us.  Words mean something.  Choosing the words we use and making the conscious decision to win rather than not lose makes all of the difference in the quality and power of the actions we end up taking to move our organizations forward.

God Winks

What are you excited about today?  For me, I am excited about coincidences over this past week.  What do I mean?  Last week, on a whim, my daughter’s boyfriend and I decided to run over to Taco Cabana for dinner.  I am not much of a fast food eater but have recently given myself a bit of latitude as the final days to the half marathon approach. (Rationalization is amazing!)  We placed our order and I noted the receipt number: 333.

On Saturday morning, I was completing my last long run before this weekend’s race, noticed a deer in a yard and a street address on a mailbox: 333.  In an instant, I remembered a former co-worker helping me with a benefits question who said, “Wow!  Your starting date was March 3, 2003. 333!  Weird!”

So what do all of these coincidences mean?  I have no idea.  But over the past several years since reading a book called God Winks, I have increased my awareness of these seemingly random events.  I now take time to notice them.  It is a reminder that 100% of the things I get done in my life happen in the present moment.  It helps me think about the small twists and turns that led me down various paths.  It’s exciting to think of these God winks as road signs for my journey.

The coolest thing about God winks is that they are free.  The bonus is that the meaning I give them is up to me.  And that meaning creates energy.  And that energy fuels action.  And action has the power to change the world.

As I lead this week, I am taking the power of 3 with me.  I’ll let you know how it goes.

Take some time this week to notice the God winks in your life.

Communicate

“A leader’s ability to communicate is as important as execution.”  Tony Alvarez II

I heard Mr. Alvarez speak at a CFO forum last week.  He had a great deal to say about how we should be leading in the current times but the quote above stood out from the rest.

To be clear, this is a seasoned CEO who has been involved in dozens of successful company turnarounds.  His 30-year plus career has been all about achieving results in organizations that were headed into or out of bankruptcy.  This is a bottom line, cash flow focused guy.  And his main point was that our ability to communicate is just as important as our ability to execute!

I have used this space to discuss the power of communication and my strong belief that poor communication lies at the heart of most leadership difficulties.  As I look back at the last six months of posts, the majority of them have a communication component in them.

The bottom line is this: leadership is a contact sport requiring us to take committed stands for what we believe in and helping our people understand the vision, the roadmap and the support systems that are in place to help them succeed. Doing that takes more than occasional e-mails, voicemails and memos.  It requires us to engage in meaningful dialogue that explores alternatives, invites varying points of view and takes the time to understand those points of view – all of which requires us to make it safe for our people to come forward, sit at the table and engage in the work that sits before us.

If you have not yet made the distinction that we manage things and lead people, the words above will serve as a reminder that, ultimately, everything that we achieve in life is done in partnership with others.  And partnering requires communication.  And communication is required for successful execution.  And that’s what builds great and enduring organizations.

Process Effectiveness

I recently wrote a company CEO a note about a key component of customer satisfaction – response time to a customer request.  I provided a formula that has helped me in diagnosing processes that are not providing the required results.  The formula is VT/ET where VT = Value-added Time and ET = Elapsed Time.

In a perfect world, VT/ET would equal 1.  Simply put, we would spend 1 hour in value-added activity (things the customer is willing to pay us to do) and provide the customer with the result at the end of that same hour.  Of course, in the real world, things like orders sitting in queues or in-baskets/out-baskets, questions about the order that require follow-up and mail time all conspire to increase the elapsed time between pressing the “I’ll take it” button and receiving the object of your desire in the mail.  In fact, one study indicated that the average business process performs at somewhere around 0.05.  You read that right.  This breaks down to 5% value-added time and 95% non-value added time in the process.  Not a pretty picture.

So what?  Well, as customer expectations about speed continue to be driven by instant access to novels through a Kindle reader by Amazon or Googling a fact for the day barely worth knowing with a couple of keystrokes, our definition of timely response begins to warp.  We want stuff when we want it.  Period.

So when I order shoes from the awe-inspiring Zappos at 5:00 pm in San Antonio, the shoes are in my hands by noon the next day.  Zappos moves the expectation timeline for all the others.  But why do I need the others if I have Zappos?  Exactly!

When I order an i-Pod from Apple it is in my hands in three days – from China!  Apple moves the expectation timeline for all the others.

Much has been written about process excellence being mature and that most organizations have optimized their processes to serve the customer.  Rubbish!  We haven’t even scratched the surface for what is possible.

Why not?  For the most part, we rely on tribal knowledge and individual effort to deliver our services and products.  It’s the way we have always done it.  We don’t do our work on purpose.  Instead we make it up as we go each day, sapping the time that our people could be using to spend with our customers on non-value added activity that the customer simply doesn’t care about and won’t pay us to perform.

Increasing the VT/ET ratio is a matter of asking questions about when we took a shortcut for a rush order and got it done in 1 day instead of 10.  What did we do differently?  What can we eliminate from the workflow?  What processes are simply wasting our resources and chasing our customers off?  What is making it hard to do business with us?

Putting ourselves in the customer’s shoes and simply asking whether our response time is good enough is a great place to start.  I saw a television ad for some gadget recently that asked the customer to allow 1 to 10 weeks for shipping.  Wow! and Yikes!  Customers don’t feel averages – they feel variation.  If your favorite pizza delivery place advertises 30-minute delivery and yours arrives in one hour are you satisfied that, on average, that day’s deliveries to all customers took 30 minutes?  Of course not.  The customer starts her clock when the order is placed, the e-mail is sent, the phone is hung up or the check is placed in the mail.  What we do once we receive the order can make the difference between a customer fleeing or becoming a raving fan.  Setting expectations is key.  If a customer understands our service or product, they unconsciously start a clock ticking that asks the following question: “How long can that possibly take?”  They then apply a factor that doubles that time and decide for themselves what reasonable looks like.  When our delivery or response time dwarfs that estimate by days or weeks, the customer quickly travels down the road of dissatisfaction to our competitor.

So what do we do?  We challenge ourselves to tighten up our processes by asking some of the questions above.  We actually speak to our customers to understand their expectations.  We read 100% of the customer comments and determine common themes as quickly as possible.  We allow decisions to be made affecting the customer as low in the organization and as close to the customer as possible.  We make the minimum number of rules, regulations and policies possible and allow our values and trusted team members to make the call.

A few examples are in order:  I went out to a nice restaurant in San Antonio last week.  It was a 6:00 reservation on a weeknight and a colleague and I had the pick of the restaurant.  The hostess explained that it was happy hour and, if we sat in a section around the bar, drinks and appetizers would be less expensive.  The booth we sat in looked a great deal like the booths on the other side of the restaurant and probably not as comfortable on a 70-degree night as the alfresco dining.  Why the ridiculous segregation of customers?  I have some theories but, whatever the real reason, two diners were scratching their heads over this strange ritual.  It impacted our experience because diners don’t want to bother with choosing tables and running coupon codes in their heads.  They want quality food, great service and pleasant ambience that allows for conversation.  This restaurant missed the mark by creating a process that takes away from the customer experience.

Years ago, the Ritz-Carlton hotel chain received its first Malcolm Baldrige National Quality Award.  One of the cultural artifacts at Ritz is that its CEO put in place an approach that allowed all of its employees – front desk, managers, bellman, housekeepers and line cooks to spend up to $2,000 to solve a customer’s problem.  Katie bar the door I hear you yell!  The inmates are running the asylum!  The result was significantly increased employee loyalty – because they were trusted, very few employees spent anywhere near the $2,000 because they took that trust in them seriously and found other creative ways to solve customer problems.  As a result, customer satisfaction and loyalty soared as help was always, literally, a few steps away in the form of empowered employees who knew it was everyone’s job to take care of that customer.

Process is a means rather than an end.  Simple is better than complex.  Taking the time to think about how work gets done and using VT/ET as an initial screen can provide enormous value to you and your organization.

A Values Proposition

From the book “How: Why How We Do Anything Means Everything…in Business (And in Life)” by Dov Seidman: According to a recent LRN study, an overwhelming majority of employees – 94 percent – say it is critical that the company they work for have a strong commitment to values.  In fact, 82 percent said they would prefer to be paid less and work for that values-driven company than receive higher pay at a company with questionable commitment.  Business in general has become far more precise and concrete about issues – like conduct, character, and reputation – that it formerly considered “soft.”

This passage has resonated with me since I read it last week.

During my career, I have been accused of trusting too much.  “David, you trust your people too much.”  “David, you can’t tell your team about that!”  “David, that’s soft stuff.  What we’re looking for is results.”  “David, we don’t have time to spend on values.  That’s just a bunch of happy talk.”

Some leadership styles are prone to task before people.  Others to people before task.  Some strike a balance between the two.  This happens to be my style.  I decided early in my career that the impact of a decision on the people would always weigh heavily on my decision-making.  With experience, I added the skill of asking questions about unintended consequences and a consistency with stated business values to the mix.  True, it was the soft stuff.  I also believed it was and is the only right way to do business yesterday, today, and always.  The soft stuff is truly the hard stuff.

My tendency is to trust people first until given a reason not to do so.  That has hurt me exactly one time in a 24-year career.  And it wasn’t a deep wound.  The other thousands of times I have trusted, I have been rewarded with better decision-making, improved discretionary effort, increased collaboration, rising morale and better results.  As humans, we have a natural tendency to gather evidence that supports our beliefs. It’s not hard for me to reinforce my belief in trusting others based upon my experiences.

We all have values we live by, whether explicitly stated or not.  The important thing in a business setting is spending enough time to validate how you, and your team, will lead.  Some companies devise complex rules that must then be administered, edited, changed, updated, and enforced.  Other companies point to a handful of values and simply ask whether the behavior is consistent with those values.  The latter approach seems more efficient to me as well as more effective.  It treats your people as adults.  It demonstrates trust.  It creates a safe environment for adult conversations. It supports innovative behavior.

Sure, there are team members that will violate the values.  Deal with them when they do.  Resist the reactionary temptation of so many leaders to create a policy for the 100% because of the behavior of the 1%.  Don’t question the trustworthiness of everyone because one veered off the path.  It simply costs too much.

What does that mean?  Simply this:  Control is neither perfect nor free.  Absolute control in an organization, apart from being an illusion, would be prohibitively expensive to try to achieve.  And the expense is not limited to dollars.  It saps the spirit of your company turning it into a more cynical, less energetic, more inwardly focused (sorry customers), and soul-deadening version of its former self.

Your organization values matter.  Especially the ones that you use rather than laminate.  It is a critical part of making and leaving the place and people more rather than less.

Small Things Redux

There is a story about the end of the Cold War that involves Ronald Reagan and Mikhail Gorbachev.  During the final months leading up to the fall of the Berlin Wall, the rhetoric reached new highs and the USSR was labeled the “Evil Empire” among other terms.  During a meeting between the two heads of state, the rhetoric continued until, suddenly, Ronald Reagan stood up, turned around and walked out of the room in a stunning display of seeming rudeness.  Just as suddenly, he turned around with a broad smile on his face and said, “Let’s start over.  My name is Ron, can I call you Mikhail?”  The Berlin Wall fell weeks later.  Small things.

How is it that something with the enormity and passion of the Cold War ends largely on a decision to change an approach and establish rapport?  It is remarkable isn’t it?

Many of us walk through life waiting for the big thing to happen that changes everything.  And the big thing rarely comes.  What happens is a series of small actions taken minute by minute or day by day carry an enormous power to add to the snowball.  Eventually, all of the snowflakes turn into the snowman.  Many small things, taken in succession, add inexorably to the progression toward an end result which is the big thing.

Running is my preferred form of exercise, so running stories interest me.  A former colleague of mine walked out his door six years ago, having not exercised for many years.  He jogged to the end of the block and walked home.  The next day he went two blocks.  And so on.  Two weeks ago, he finished the Ironman World Championships in Hawaii in under ten hours, the second time he had competed in the race.  Walking to the end of the block six years ago.  A 2.4-mile ocean swim, 112-mile bike ride and 26.2 mile marathon in Hawaiian heat, humidity and wind.  Small steps, big results.  One workout at a time.

My niece lived with us for a few years.  One evening the phone rang and a young man asked to speak with her.  We chatted for a few minutes and I was struck by his attitude.  I wrote my niece a message on a Post It note.  It said simply, Mike called, his phone number and the words:  Please marry him.  Five years later she did and they are having their first baby girl in February.  She still has the Post It note.  Do I believe they are married because of the note?  No.  And yes.  I believe that intention combined with a cause set in motion has enormous power in it.

I use this story to remind me of the power of a kind word, an extra moment taken to jot down a note, and the power in being present in the moment.  We simply don’t know what the small things will end up becoming.

As you go forth to lead today, don’t feel overwhelmed by trying to get the big thing done.  Do what you can and move toward your goal a step at a time.  No one can ask more of you than that.  And in that single step, enormous and unseen power is released to provide you with the resources you will need to reach your big goal.

Encouraged – Questions

In my last post, I suggested a few questions we can ask ourselves to help us become more resourceful.  Because this space is about asking a higher quality question, here are a few more that may be helpful:

1. What are you grateful for in your life right now?

2. If the answer is “Nothing” – What could you be grateful for in your life right now?

3. What are you giving right now to others?

4. How could you enjoy what you are doing even more?

5. What else could this mean?

6. What’s great about this?

7. What could be great about this if you thought about it a bit more?

8. What decision could you make right now to move you closer to your goals?

9. What do you need to focus on right now?

Good things happen when we ask a better question.  To be an extraordinary leader means we start with ourselves first.

Encouraged

I know people who are working but discouraged right now.  The months of watching co-workers leave while they stay behind and do more of the work that does not leave is beginning to weigh on their minds.  Tempers are beginning to make more frequent appearances as stress levels increase.  People are too tired to look at and follow the company values consistently.  Leaders who were fair communicators before are becoming poor communicators now.  People who used to reach out to others for help are keeping to themselves.  People are tired.

What can we do to thrive in these times?  A few thoughts:

1. Change your physiology.  It is physically impossible to be emotionally down when your head is up, your shoulders are back, a smile is on your face and you are breathing deeply.  I’d look like an idiot, you say.  Do it anyway.  It will help you tap into the resources you need to be more productive and happy.  On a longer-term basis, get up and take a walk, jog, ride a bike, swim or run.  The exercise releases endorphins that simply make us feel better and offset the stress-related cortisol that floods our bodies when we are under pressure.
2. Change your focus.  We become what we consistently think about.  We get what we consistently focus on.  If we focus on the piles of work, the deadlines, a brain-dead boss or co-worker, we attract more of that negativity to us.  On the flip side, if we decide in the morning how we will define success today and focus on the most important thing on our list, we walk away from that day with more energy.  We may be tired at the end of the day, but it is a different kind of tired.
3. Change your words.  The words we use have power in them.  Words mean something.  Negative words bring us, and those around us, down.  That negativity feeds on itself.  Anyone who has ever been at a company cafeteria and sat with multiple people has experienced the spiral of emotions when one person decides to share their bad day with the rest of the diners.  I am not suggesting you spout happy talk.  I am suggesting that you consciously become aware of the words you use everyday and try to replace the less resourceful, negative words with more empowering ones.  Replacing the word “can’t” with “can” or asking “Why not?” instead of “Why?” (usually with a little whine in it) begins to open your mind to possibility instead of overwhelm.
4. Don’t watch television news for one week.  Instead, go to bed 30 minutes or one hour earlier.  If you are a 6:30 am early bird at work, try a week at 7:30 instead.  The extra sleep will make all of the difference in the world in your outlook.  During that week, ask yourself what you miss about not knowing all of the bad news happening in your city.  My guess is you will feel better not watching on a regular basis.  I know I do.
5. Take 15 minutes a day to meditate or visualize how you want your life to be.  It must be quiet.  You must be comfortable.  No kids, spouses, significant others, television or radio.  Just 15 minutes to quiet your mind.  It is a great and powerful gift to yourself.

The world is unlikely to become less stressful, busy, or slower in the future.  How you choose to define what success is for you is the key to being happier.  Understanding what enough is for you will help.  Saying “no” to more obligations and pressure will also help you take control and reduce the feeling of overwhelm you are carrying around with you.

The power to choose how we feel about something, what we focus on, how we breathe and carry our bodies and the words we use to interact with others are all up to us.  And that is freedom.

Choices IV

“A leader’s job is to get the right people on the bus and the wrong people off the bus.”  Jim Collins

This quote has resonated with me since I read it several years ago in Collins’ outstanding book, Good to Great.  If you don’t own it, buy it.  If you do, re-read it.  With that said, the question I am asking myself today is how we are going about the process of getting the wrong people off the bus.  What are the unintended consequences of all of the actions being taken to sustain the bottom line in our companies?  Are we asking the right people to leave?  How do we know?

As I have coached and spoken to people during the past year, I have made some new distinctions.

1. Economists used to speak about a 5% level of structural unemployment.  This number was essentially a floor for defining full employment.  With a workforce of 140 million in the US, that equates to about 7 million people.  At nearly 10% currently, that number is around 14 million of our neighbors out of work.  During this downturn, productivity has continued to increase, technology has continued to improve and many, if not most, companies have found ways to get the work done with fewer people.  Is it possible that 10% is a new baseline for unemployment and the jobs that were lost will not come back during a recovery?

2. People that are focused on money rather than adding value, do not end up being successful – financial or otherwise.  Look around you. The people that come to work everyday to create value rather than simply extract value in the form of a paycheck are the successful ones.  Unfortunately, these same people may not be successful in their current organization but, instead, vote with their feet in search of greater meaning and a corresponding ability to create great value and contribution wherever they go.  Successful people love what they do.  And in that passion is enormous energy, meaning and ultimately, success.

3. When we decide to terminate an employee, for whatever reason, some of us begin to build a series of events around that targeted employee wherein the employee suddenly starts making more mistakes.  Suddenly they are not as capable.  Suddenly they are not as productive.  Suddenly they turn into idiots.  What changed?  Simply this: The leader feels guilty and spends time trying to build a case in their own head about why it’s okay to let someone go to reduce their guilt.  I have heard this quote, or some variation, dozens of times in my career – “He was never that good anyway.”  B.S.!   As leaders, we need to have the intellectual honesty to realize we failed. We failed that employee.  We failed his team.  We failed our organization.  We failed ourselves.  Only then do we begin to have the right conversation that challenges our decisions that impact people’s lives before we rush to make the restructuring entry in this month’s financials.  I am not saying layoffs shouldn’t be done.  I am simply suggesting that we be honest with ourselves and the impacted employees when we do it.  It’s part of making our organizations more rather than less.

4. As the downturn has dragged on, many companies have made tough choices to let people go.  As the third, fourth and fifth round of layoffs occur, the quality of the people that we are losing is beginning to change our cultures.  How so?  The people that are leaving now have, in many instances, been the standard-bearers of our culture.  As they leave, they take a great deal of organizational memory or tribal knowledge with them.  In some cases, this may be a good thing.  In most cases, it is the beginning of a fundamental change in the organizational DNA that we didn’t take time to design.  The long-term implications may be profound.  But with average CEO tenures in the 3-year range, who cares?  Good question.

5. While some things are changing around us in this new economic world, one thing is not.  Respect for each other never goes out of style. When we disrespect our peers, bosses, team members, customers, we lose.  We lose a part of ourselves.  We lose our ability to influence.  We lose our ability to lead.

The world is not going to get less stressful.  Business decisions are not going to become less complex.  Economic pressures are not becoming less prevalent.  What we have left is our ability to make a choice in how we treat one another in every interaction.  It is now, as it has always been, a matter of choice.  God grant us the grace to choose wisely.

Enough

A poem by Kurt Vonnegut as related by John Bogle:
True story, Word of Honor:
Joseph Heller, an important and funny writer
now dead,
and I were at a party given by a billionaire
on Shelter Island.
I said, “Joe, how does it make you feel
to know that our host only yesterday
may have made more money
than your novel ‘Catch-22’
has earned in its entire history?”
And Joe said, “I’ve got something he can never have.”
And I said, “What on earth could that be, Joe?”
And Joe said, “The knowledge that I’ve got enough.”
Not bad! Rest in Peace!

About a year ago, Vanguard Group founder John Bogle published a book titled Enough. The poem above inspired the book and got me thinking about that simple word in my own life.

Like many people, much of my life has been spent accumulating stuff.  What I finally realized is that the marginal utility of the next thing was not worth the price paid in money, time, or stress.  Stuff has energy and takes energy.  Stuff collects dust.  Stuff must be moved, stored, re-arranged.  All too often we buy the stuff on credit, sometimes paying for it long after we have, unbelievably, put the stuff into a storage unit where we will seldom see it again.  By the way, the self-storage industry generates $18.5 billion in revenues annually worldwide.  So it seems that we have taken the buying, holding and storing of stuff to a global art form.

So the question becomes, are we happier because of our stuff?  Does the next thing hold any value for us?  Does it hold enough value for what we are trading to get it?

I read a study some years ago that indicated employees are not significantly more happy with salary increases after they reach $50,000 in income.  Interesting.

As I look around at my own stuff, the choices I made to right-size my environment, the decision to have a largely empty attic and garage, the recognition that I still have too much stuff to dust is readily apparent.  But so is the relief I feel in knowing how much stuff I have gotten rid of in the past several years.  It is a relief to have less of it.  It feels good to know that I have enough. And that knowledge carries a great deal of freedom with it.

I have no idea what enough is for you, but asking yourself the question may be the second greatest gift you give yourself this week. Answering the question will be the first.