Marshall Goldsmith Blog

I’ve had questions from leaders who find themselves in a company that was formed through several mergers. While they hear talk about “synergy” and “cross-organizational teamwork,” they don’t always see this in practice.

The number one reason for mergers is synergy - which will, hopefully, lead to more profitability. If there is no “1+1=3″ effect in joining with another organization, why bother to do it?

In spite of seemingly great synergy, many mergers fail. The main cause of failure is not bad strategic fit.  It is the lack of integration of people and culture. The question is critical - not only to the success of companies formed through mergers - but to almost all huge, global corporations.

Here are a few basic suggestions for managers that may help building synergistic partnerships across your organization:

1. Review the larger company goals, then focus on how your unit’s objectives relate to overall corporate success.

2. Identify other parts of the business that may be impacted by the work of your group and let them participate in the development of your goals and plans.

3. Have each person in your group identify cross-organizational colleagues with the potential for synergies and partnerships.

4. Develop a disciplined procedure through which each person regularly reaches out to their cross-organizational partners and asks “How can we better help each other?”

5. Establish monthly team meetings for sharing what has been learned and ensuring accountability.

6. Rather than defending your viewpoints, or protecting your organization try to methodically balance your views with those of your colleagues to build a sense of shared commitment to larger objectives.

7. Establish a regular best practices forum (this can be done online) in which participants from all areas of the organization discuss what is working. (GE has done a fantastic job of making this happen.)

8. Be willing to transfer some of your best talent to other parts of the business. This will both facilitate cross-organizational synergy and help develop potential corporate-wide leadership. (Admittedly, this one is much easier in theory than in practice!)

9. Finally, go first. If we wait for the other people across the organization to reach out to us - and they wait for us to reach out to them - both parties will only succeed in waiting, not in building partnerships.

Life is good.
Marshall

https://MarshallGoldsmithLibrary.com
http://www.MarshallGoldsmithFeedForward.com

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Peter Drucker has written extensively about the impact of the knowledge worker in modern organizations. Knowledge workers can be defined as people who know more about what they are doing than their managers do. Many knowledge workers have years of education and experience in training for their positions, yet have almost no training in how to effectively influence decision makers. As Peter has noted, ‘The greatest wisdom not applied to action and behavior is meaningless data.’

The ten guidelines listed below are intended to help you do a better job of influencing decision makers. In some cases, these decision makers may be immediate or upper managers –in other cases they may be peers or cross-organizational colleagues. I hope that you find these suggestions to be useful in helping you convert your good ideas into meaningful action!

1. When presenting ideas to decision makers, realize that it is your responsibility to sell –not their responsibility to buy.

In many ways, influencing ultimate decision makers is similar to selling products or services to external customers. They don’t have to buy … you have to sell! Any good salesperson takes responsibility for achieving results. No one is impressed with salespeople who blame their customers for not buying their products.

While the importance of taking responsibility may seem obvious in external sales, an amazing number of people in large corporations spend countless hours in ‘blaming’ management for not buying their ideas. Chris Argyris has pointed out how ‘upward feedback’ often turns into ‘upward buck-passing’. We can become ‘disempowered’ when we focus on what others have done to make things wrong and not what we can do to make things right.

If more time were spent on developing our ability to present ideas, and less time were spent on blaming others for not buying our ideas, a lot more might get accomplished.

A key part of the sales process is education. To again quote Drucker, ‘The person of knowledge has always been expected to take responsibility for being understood. It is barbarian arrogance to assume that the layman can or should make the effort to understand the specialist.’ The effective upward influencer needs to be a good teacher. Good teachers realize the communicating knowledge is often a greater challenge than possessing knowledge.

2. Focus on contribution to the larger good - not just the achievement of your objectives.

An effective salesperson would never say to a customer, ‘You need to buy this product, because if you don’t, I won’t achieve my objectives!’
Effective salespeople relate to the needs of the buyers, not to their own needs. In the same way effective influencers relate to the larger needs of the organization, not just to the needs of their unit or team.

When influencing decision makers, focus on the impact of your suggestion on the overall corporation. In most cases the needs of the unit and the needs of the corporation are directly connected. In some cases they are not. Don’t assume that executives can automatically ‘make the connection’ between the benefit to your unit and the benefit to the larger corporation.

3. Strive to win the ‘big battles’ - don’t waste your energy and ‘psychological capital’ on trivial points.

Executive’s time is very limited. Do a thorough analysis of ideas before ‘challenging the system’. Don’t waste time on issues that will only have a negligible impact on results. Focus on issues that will make a real difference. Be willing to ‘lose’ on small points.

Be especially sensitive to the need to win trivial non-business arguments on things like restaurants, sports teams or cars. People become more annoyed with us for having to be ‘right’ on trivia than our need to be right on important business points. You are paid to do what makes a difference and to win on important issues. You are not paid to win arguments on the relative quality of athletic teams.

4. Present a realistic ‘cost-benefit’ analysis of your ideas –don’t just sell benefits.

Every organization has limited resources, time and energy. The acceptance of your idea may well mean the rejection of another idea that someone else believes is wonderful. Be prepared to have a realistic discussion of the costs of your idea. Acknowledge the fact that something else may have to be sacrificed in order to have your idea implemented.

By getting ready for a realistic discussion of costs, you can ‘prepare for objections’ to your idea before they occur. You can acknowledge the sacrifice that someone else may have to make and point out how the benefits of your plan may outweigh the costs.

5. ‘Challenge up’ on issues involving ethics or integrity –never remain silent on ethics violations.

Enron, WorldCom, and other organizations have dramatically pointed out how ethics violations can destroy even the most valuable companies. The best of corporations can be severely damaged by only one violation of corporate integrity. Hopefully, you will never asked to do anything by the management of your corporation that represents a violation of corporate ethics. If you are, refuse to do it and immediately let upper management know of your concerns. This action needs to be taken for the ultimate benefit of your company, your customers, your co-worker and yourself.

When challenging up try not to assume that management has intentionally requested you to do something wrong. In some cases, inappropriate requests may be made because of misunderstandings or poor communication. Try to present your case in a manner that is intended to be helpful, not judgmental.

6. Realize that your upper managers are just as ‘human’ as you are –don’t say, ‘I am amazed that someone at this level…’

It is realistic to expect upper managers to be competent; it is unrealistic to expect them to be anything other than normal humans. Is there anything in the history of the human species that indicates when people achieve high levels of status, power and money they become completely ‘wise’ and ‘logical’? How many times have we thought, ‘I would assume someone at this level…’ followed by ’should know what is happening’, ’should be more logical’, ‘wouldn’t make that kind of mistake’, or ‘would never engage in such inappropriate behavior’.

Even the best of leaders are human. We all make mistakes. When your managers make mistakes, focus more on helping them than judging them.

7. Treat upper managers with the same courtesy that you would treat partners or customers - don’t be disrespectful.

While it is important to avoid ‘kissing up’ to upper management, it is just as important to avoid the opposite reaction. A surprising number of middle managers spend hours ‘trashing’ the company and its executives or making destructive comments about other co-workers. The item, ‘avoids destructive comments about the company or co-workers’ regularly scores in the ‘bottom ten’ on co-workers satisfaction with peers.

Before speaking it is generally good to ask four questions:
- Will this comment help our company?
- Will this comment help our customers?
- Will this comment help the person that I am talking to?
- Will this comment help the person that I am talking about?

If the answers are no, no, no and no –don’t say it! There is a big difference between total honesty and dysfunctional disclosure. As we discussed earlier, it is always important to ‘challenge up’ on integrity issues. It is inappropriate to stab decision makers in the back.

8. Support the final decision of the organization –don’t say, ‘They made me tell you’ to direct reports.

Assuming that the final decision of the organization is not immoral, illegal or unethical –go out and try to make it work! Managers who consistently say, ‘they told me to tell you’ to co-workers are seen as ‘messengers’ not leaders. Even worse, don’t say, ‘those fools told me to tell you’. By demonstrated our lack of commitment to the final decision we may sabotage the chances for effective execution.

A simple guideline for communicating difficult decisions is to ask, ‘How would I want someone to communicate to their people if they were passing down my final decision and they disagreed with me?’ Treat your manager in the same way that you would want to be treated if the roles were reversed.

9. Make a positive difference –don’t just try to ‘win’ or ‘be right’.

We can easily become more focused on what others are doing wrong, than how we can make things better. An important guideline in influencing up is to always remember your goal –make a positive difference for the organizations.

Corporations are different than academic institutions. In an academic institution the goal may be just sharing diverse ideas, without a need to impact the bottom line. Hours of acrimonious debate can be perfectly acceptable. In a corporation, sharing ideas without having an impact is worse than useless. It is a waste of the stockholders money and a distraction from serving customers.

When I was interviewed in the Harvard Business Review, I was asked, ‘What is the most common ‘area for improvement’ for the executives that you meet? My answer was ‘winning too much’. Focus on making a difference. The more other people can ‘be right’ or ‘win’ with your idea, the more likely your idea is to be successfully executed.

10. Focus on the future –’let go’ of the past.

One of the most important behaviors to avoid is ‘whining’ about the past. Have you ever managed someone who incessantly whined about how bad things are? When people consistently whine, they inhibit any change they may have for impacting the future. Their managers tend to view them as annoying. Their direct reports view them as inept. Nobody wins.

Successful people love getting ideas aimed at helping them achieve their goals for the future. They dislike being ‘proven wrong’ because of our mistakes in the past. By focusing on the future you can concentrate on what can be achieved tomorrow, as opposed to what was not achieved yesterday. This future orientation may dramatically increase your odds on effectively influencing up. It will also help you build better long-term relationships with people at all levels of your organization.

In summary, think of the years that you have spent ‘perfecting your craft’. Think of all of the knowledge that you have accumulated. Think about how your knowledge can potentially benefit your organization. How much energy have you invested in acquiring all of this knowledge? How much energy have you invested in learning to present this knowledge to decision makers –so that you can make a real difference? My hope that by making a small investment in learning to influence decision makers, you can make a large, positive difference for the future of your organization! 

Life is good.

Marshall

https://MarshallGoldsmithLibrary.com

http://www.MarshallGoldsmithFeedForward.com

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May 11, 2009 in Chicago - Linkage OD Summit

How would you hire people if everyone is highly skilled, well educated at the same school, and locked in a dead heat of accomplishment, posting exactly the same “lifetime batting average”?

How would you decide whom to promote and whom to cast aside?

Chances are you would start paying very close attention to how people behave — how they treat colleagues and clients, how they speak and listen in meetings, how well they extend the minor courtesies that either lubricate daily work life or create friction. Welcome to the real world at the higher levels of organizational life.

We apply these behavioral criteria to almost any successful person, whether it’s our CEO or our plumbing contractor. But sometimes we forget to apply them to ourselves. And in turn, we forget that our behavior may be holding us back.

All other things being equal, your people skills (or lack thereof) become more pronounced the higher up you go. In fact, even when all other things are not equal, your people skills often make the difference in how high you go. Who would you rather have as a CFO? A moderately good accountant who is great with people outside the firm and skilled at managing very smart people? Or a brilliant accountant who’s inept with outsiders and alienates all the smart people under him?

Not a tough choice, really. The candidate with superb people skills will win out every time, in large part because he will be able to hire people smarter than he is about money and he will be able to lead them. There’s no guarantee that the brilliant number cruncher can do that now or any time in the foreseeable future.

We all have certain attributes that helped us land our first job. These achievements go on our resumes. But as we become more successful, those attributes recede into the background and more subtle traits emerge. It’s not enough to be smart. You have to be smart — and something else. At some point, you get the benefit of the doubt on skill issues.

For example, we assume our doctors know medicine, so we judge them on their bedside manner. And not many people remember that Jack Welch has a PhD in chemical engineering. That’s because none of the problems he encountered in his last 30 years at GE were in any way related to his skill at chemical titration or formulating plastics.

When he was vying for the CEO job, the attributes holding him back were strictly behavioral: his brashness, his blunt language, his unwillingness to suffer fools. The soft behavioral skills came to the fore only after he delivered profits and ascended the GE ladder. That’s when the GE board wanted to know if he could behave as a CEO.

What if you had to prepare a resume where you couldn’t highlight the elite college you graduated from, or your five years at McKinsey, or even your title at your current job?

You can’t boast about the profits you posted, the sagging division you turned around, or the product you launched and turned into a stand-alone brand. The only data you can put on your resume are your interpersonal skills (which, for the purposes of this exercise, must be documented and authentic). What would they be?

* To be able to listen?
* To give proper recognition?
* To share — whether it’s information or credit for a success?
* To stay calm when others panic?
* To make midcourse corrections?
* To accept responsibility – and admit mistakes?
* To defer to others, even (especially) those of lesser rank?
* To let someone else be right some of the time?
* To resist playing favorites?

You see where I’m going?

This quick list of attributes, while attractive in a junior employee, is not the sort of thing that junior employees get lauded for. But further along in your career curve, when it’s time to step up into a leadership position, you’re going to need these qualities in spades.

Stripped of your technical mastery and your hall-of-fame-quality lifetime batting average, what are the interpersonal skills that will make you rise above the leadership pack? Pick one, any skill that you feel you’re lacking. And start developing it . . . now.

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

September 15, 2008 - New York - SHRM - contact Marshall if interested

October 2, 2008 - The Conference Board - Download Schedule - Register with discount: NM1

October 8, 2008 - Boston - Linkage: “What Got You Here Won’t Get You There” one day program

October 13, 2008 - Palm Desert, CA - Global Institute of Leadership Development - Register with discount: GILD08-PW

October 29, 2008 - Japanese Business Executives - Tokoyo, Japan

October 30, 2008 - Japanese Business Coaches - Tokoyo, Japan

December 2, 2008 in San Francisco - Linkage: “What Got You Here Won’t Get You There” one day program

To view my complete schedule, click here.

A lot of executives assume that their staff members should act exactly as they do — and enjoy what they enjoy. Leaders are especially prone to this mistake when it comes to their communication style. When I began working with Bob, the CEO of a successful company, I saw this problem play out before my eyes.

The feedback on Bob didn’t quite add up. On the one hand, it said he often stifled open discussion. On the other, it said he was always changing his mind. These two characteristics are often mutually exclusive. People who discourage open discussion aren’t usually people who are always changing their mind.

Things only made sense after Bob’s chairman told me, “You have to understand, Bob is the world champion at debating with others and at arguing with himself. He was a star on one of the best college debating teams in the world.”

Time and again, Bob’s natural response with any new idea was to go into debate mode and try to shoot holes in it. Let’s say Harry, three levels below Bob in the organization, expressed his opinion in a meeting. Bob would leap into the conversation and present the other side of the argument. Harry, considering his status, wasn’t likely to be as quick as Bob and almost certainly not as good at debate. Bob just made Harry look very stupid in front of his colleagues.

Harry’s reaction to the debate was very simple: Quit expressing opinions that Bob may not want to hear. Even better, play it safe and quit expressing opinions at all. Bob thought he was debating; Harry felt like he’d been stepped on.

Bob compounded the problem by debating with himself as well. Someone would say, “Why don’t we try this?” and Bob would approve. But a few days later, after he had enough time to debate his decision with himself, he’d change his mind, saying, “Maybe that wasn’t such a good idea.” In his head, he was open-minded. In his staff’s collective brain, he was confusing the hell out of them.

My job was to make Bob see the problem, which I like to call the “golden-rule fallacy.” He assumed that his people were just like him and, therefore, liked to be treated the same way he did.

When I told Bob about the feedback he had received, he quickly blurted out, “There must be some misunderstanding here! I love it when we can all take the gloves off and tell each other what we really think.”

“That’s nice. But they aren’t you,” I said.

“What’s wrong with me expressing an opinion, and someone else expressing an opinion, and we have a healthy debate?” he asked.

True to form, Bob had lured me into a heated debate. I replied, “Well, yes, but you’re the CEO — and they aren’t. You have advanced degrees and a big IQ — and they may not. You were the star debater at your top university — and they weren’t. Their odds of beating you at this game are close to zero. So they opt not to play.”

“What about Jim?” Bob countered. “The other day he and I had a heated disagreement. He told me what he thought about one of my plans in no uncertain terms. We had a real head-to-head discussion and ended up with a solution that was better than either one of us started with. Jim told me how much he appreciated my candor and how much fun it was to argue. How do you explain that?”

After laughing at Bob’s animated version of his discussion, I replied, “Jim is a younger version of you! He has a great education; he’s brilliant and quick. You don’t intimidate him. Unfortunately for you, very few people in the world are like Jim, or for that matter, like you. If they were, your style would be perfect.”

All of a sudden, the light bulb went on for Bob. He saw that he was operating under a bogus assumption about how to treat others. So he changed his behavior.

He paid close attention to his debating urges and stifled them when they put his staff at a huge disadvantage. He routinely invited people to voice their opinions in meetings and thought once, twice, three times before challenging them.

As a CEO, he started making clear decisions and quit causing confusion by publicly debating with himself. After 12 months, Bob’s team perceived him as a better boss.

The golden rule doesn’t always work in leadership. If you manage your people the way you’d want to be managed, you’re forgetting: You’re not managing you!

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com
Marshall’s Upcoming Schedule:

September 15, 2008 - New York - SHRM - contact Marshall if interested

October 2, 2008 - The Conference Board - Download Schedule - Register with discount: MG1

October 8, 2008 - Boston - Linkage: “What Got You Here Won’t Get You There” one day program

October 13, 2008 - Palm Desert, CA - Global Institute of Leadership Development - Register with discount: GILD08-PW

October 29, 2008 - Japanese Business Executives - Tokoyo, Japan

October 30, 2008 - Japanese Business Coaches - Tokoyo, Japan

December 2, 2008 in San Francisco - Linkage: “What Got You Here Won’t Get You There” one day program

Why is asking so important? In the Information Age, leaders must manage knowledge workers. Peter Drucker has defined knowledge workers as people who know more about what they are doing than their boss does. It is hard to tell people what to do and how to do it when they already know more than we do. In today’s rapidly changing world, we need to ask, listen and learn from everyone around us.

When people ask us for our input, listen to us, try to learn from us and follow up to see if they are getting better, our relationship with them improves.

This seems simple and obvious—so why don’t we do it?

Reviews of summary 360-degree feedback involving thousands of leaders from more than 50 organizations have shown that when the item “Asks people what he or she can do to improve” is included in the company’s leadership inventory, it almost always falls near the bottom (if not in last place) in terms of employee satisfaction. As a rule, leaders don’t ask.

I recently asked the vice president of customer satisfaction in a major organization if his employees should be asking their key customers for feedback—listening, learning and following up to ensure service keeps getting better. “Of course,” he replied.

“How important it this to your company?” I asked. “It’s damn important!” he exclaimed.

I then lowered my voice and asked, “Have you ever asked your wife for feedback on how you can become a better husband?” He stopped, thought for a second, and sighed, “No.”

“Who is more important—your company’s customers or your wife?” I asked. “My wife, of course,” he replied.

“If you believe in asking so much, why don’t you do it at home?” I inquired. He ruefully admitted, “Because I am afraid of the answer.”

Why don’t most of us ask—even though we know we should? We don’t ask, because we are afraid of the answers.

Let me give you a personal example. I am in my 50s, and at my age, one type of input that I should be asking for every year is a physical exam. I managed to avoid this exam, for not one or two years, but seven years. How did I successfully avoid a physical exam for seven years? What did I keep telling myself? I will do it when I quit traveling so much. I’ll go after I begin my “healthy foods” diet. I will get that exam after I get in shape.

Have you ever told yourself the same thing? Who are we kidding? The doctor? Our families? No, we are only kidding ourselves.

My suggestions are very simple:

As a leader:

Get in the habit of asking key co-workers for their ideas on what needs to be done. Thank them for their input, listen to them, learn as much as you can, incorporate the ideas that make the most sense and follow up to ensure that real, positive change is occurring.

As a coach:

Encourage the people you are coaching to ask questions, listen to the answers and learn from everyone around them. Be a great role model for learning, then ask the people you are coaching to learn in the same way that you are. As an executive coach, I find that my clients can learn a lot more from their key stakeholders than they ever learn from me.

As a friend and family member:

Ask your loved ones how you can be a better partner, friend, parent or child. Listen to their ideas. Don’t get so busy with work that you forget that they are the most important people in your life.

Improving interpersonal relationships doesn’t have to take a lot of our time. It does require having the courage to ask for important people’s opinions and the discipline to follow up and do something about what we learn.

Who do you need to ask?

What is your first question?

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

Upcoming Events

How important is integrity in a business environment?

Enron’s leaders did a wonderful job of preaching the value of challenging the system…so did Andersen’s…so did NASA’s. Everyone seems to know that encouraging upward challenge is a key to maintaining corporate integrity. This is relatively easy to understand; it is just hard to do. After corporate meltdowns, it is amazing how many people claim that they knew there could be huge problems. It is even more amazing how few people effectively expressed these concerns before the problems were reported in the news.

Warner Burke has pointed out that “knows how to influence up in a constructive way” scored last place on managerial effectiveness in all items when people evaluated their managers in NASA – immediately before the Columbia space shuttle exploded. While lack of effective upward challenge was not the only cause of the explosion, it was a clear contributing factor. The same story is true in almost all organizational disasters and examples of corporate wrongdoing.

I’d like to suggest some organizational guidelines aimed at encouraging upward challenge and preserving corporate integrity. None are a reinvention of the wheel, and they certainly are not all encompassing, but I have seen them work in highly respected companies and I hope they can provide you with a good discussion point for reviewing your own organizational processes. While some of them may seem extreme, the organizational cost of integrity violations is — and should be — huge. If the last two years have taught us anything, it should be that ethical violations can kill even the most successful companies. The cost of preventing ethical problems will never exceed the cost of dealing with ethical problems.

Suggested Guidelines for Managers and Employees:

• If you are ever asked to do anything that you believe may be unethical, it is not your right to express your concern – it is your responsibility.

One of the world’s most highly-respected service companies clearly communicates this guideline to all employees, and it is a major message in their new employee orientation. I cannot think of any organization that should not communicate this same clear message, yet very few do.

All employees need to express their concerns if the decision may be unethical. In many cases directives that appear to be unethical are just that. Even the perception of an ethics lapse can be damaging to the entire company. Therefore, employees at all levels need to take responsibility to ensure that their organization engages in ethical business practices. After all, managers cannot read their employee’s minds.

• Employees that are not satisfied with their manager’s response to any ethical challenge should have the responsibility to continue this challenge to the next level of management.

If a resolution cannot be reached with the immediate manager, the employee should continue to challenge up. This type of challenge should not be viewed as an indictment of either the manager or the employee. Honest, well-meaning people can have very different views of the ethical dilemmas that surround the same decision.

• Any manager that threatens concerned employees or knowingly discourages upward challenge should be fired.

If only one employee is punished for honestly expressing ethical concerns, the word will quickly spread throughout the organization. Honest upward communication cannot be treated as an option. It needs to be a requirement. Managers at all levels need to understand that there are severe and immediate consequences for blocking the flow of vitally needed information.

• Consideration of integrity violations should be conditions of employment and have nothing to do with job performance.

One of the organizations that I respect the most has a clear rule: “All employees who knowingly lie, cheat or steal will be immediately dismissed, regardless of their performance on the job.” In this organization, every employee is taught that even the best performer, if found to have committed an ethics violation, will still be fired. Their logic is simple — If we allow small amounts of lying, where do we draw the line? Many of the well-publicized corporate scandals happened not merely because of one event. They happened because of the “creeping dishonesty” that can occur when small violations are ignored and increasingly corrupt practices evolve over time.

• Employees who do not feel comfortable using the normal chain of command should be provided with an alternative mechanism for upward communication.

In spite of the best corporate guidelines, the best training, and the best intent, some individual managers may still be very intimidating. Every employee needs a way to go around the system when they feel threatened by line management. They must be trained on how and when to use these alternate channels.

• Managers should proactively ask for suggestions on how to improve the organization, rather than passively waiting for employees to express concerns.

As Peter Drucker has said, “The leader of the past knew how to tell. The leader of the future will know how to ask.” If employees don’t feel free to communicate openly on business concerns, it is highly unlikely that they will feel free to communicate openly on ethical concerns. If they have an open dialogue about business concerns, any ethical concerns will probably emerge as part of the ongoing conversation.

• Both managers and employees should be trained on how to encourage and provide upward challenge.

Providing traditional ethics training may be a waste of time for many employees. The vast majority of employees are probably ethical in the first place! They merely need to learn how to recognize potential integrity issues and effectively communicate these in a way that can prevent ethics problems.

The corporate scandals of the last few years have resulted in a lack of trust for major organizations. The conditions that led to ethics issues will not be fixed by having employees attend training programs or listen to motivational talks. Organizations that establish and implement clear processes for encouraging upward challenge can do a great deal to prevent problems involving ethic, integrity and values. Trust is easy to lose and hard to regain. For many employees and for the public at large, it may take years of concerted effort to rebuild the credibility of large corporations. From both a business and values perspective, it is worth it!

Life is good.

Marshall

MarshallGoldsmithLibrary.com

www.MarshallGoldsmithFeedForward.com

Click here for Marshall’s Upcoming Schedule

In Leader to Leader’s Premier Issue, I discussed retaining high-impact performers.

The workplace is changing. Job security isn’t what it used to be. We tend to focus, understandably, on the profound impact these and other workplace changes are having on the lives of individuals. But too often leaders overlook the equally profound impact these changes are having on their organizations.

The fact is, the “new work contract”- employees taking responsibility for their own careers, and corporations providing them with career-enhancing but impermanent opportunities-can be as difficult for organizations to manage as for individuals. We as leaders still understand little of the mechanics of retaining essential high-performers in turbulent times.

Our task is complicated by four additional, less widely acknowledged trends:

* The reduced status of working for a “Fortune 500″ corporation.

* The frequent lack of connection between pay and contribution.

* The decline in opportunities for promotion.

* The rise in the influence of the “knowledge worker”.

Peter Drucker has noted the dramatically increased importance of the knowledge worker in modern organizations. Yet we are often still unsure what that means for how we should lead. Bill Gates has said that Microsoft would do “whatever it takes” to attract and retain the brightest software developers in the world.

Innovative high-technology corporations (such as Sun Microsystems) pay employees large bonuses to recruit top talent. In tomorrow’s world the “intellectual capital” brought in by high-knowledge employees will be a major, if not the primary, competitive advantage for many corporations. As the perceived value of key knowledge workers increases, the competition to hire these workers will intensify.

A Strategy for Retaining High-Impact Performers

Leaders can no longer afford to let the vagaries of the job market determine who leaves and who stays with the organization. We must learn to manage our human assets with the same rigor we devote to our financial assets. The following seven steps can help you accomplish that task:

1) Clearly identify whom you want to keep.

In recent years many organizations have focused on those people they should get rid of rather than those they should keep. Many downsizing “packages” give all employees with similar levels of experience the same incentive to leave. Unfortunately-for the organizations-the employees who decided to leave were often the high-impact performers who could find other work quickly.

2) Let them know that you want to keep them.

Amazing as it may seem, many high-impact performers who are asked why they’ve left an organization report, “No one ever asked me to stay! ” Many organizations have deliberately not told high-impact performers that they were special in any way for fear of alienating others. In the future it will become increasingly easy to retain “average” performers and increasingly difficult to retain high-impact performers.

3 ) Provide recognition.

Although compensation is an important factor for retaining high-impact performers, several studies indicate that it is currently not “the” most important factor. Typically, the chief reasons great people leave major organizations are lack of recognition, lack of involvement, and poor management The CEO of a leading telecommunications company has recently embarked on an innovative approach.

Division-level executives provide a quarterly report on high-impact performers who should be recognized. The CEO calls these individuals personally, thanks them for their contributions, and asks for their input on how the corporation can increase effectiveness. The CEO believes this process not only helps retain key talent but also generates great ideas for continuous improvement.

4) Provide opportunities for development and involvement.

One of the world’s largest consulting/ accounting firms has embarked on an original program to identify and cultivate high-potential leaders. As part of the process, young leaders engage in an “action learning” project in which they work on real-life problems facing the firm.

This gives young leaders a fantastic developmental opportunity and gives the firm valuable input on solving real problems. It also enhances the young leaders’ commitment to stay with the firm. The firm’s leaders say that such a process would not have been tried just a few years ago, for fear of alienating other partners, but that today the firm has no choice but to identify and retain high-impact partners.

5) Challenge the compensation plan.

Organizations unwilling to make performance rather than mere seniority the key driver of pay will face an increasing challenge in keeping top talent, especially young talent. One Fortune 500 industrial company recently refused to implement a variable, performance-based compensation plan because half the employees felt uncomfortable with the concept.

The corporation neglected to measure which half felt uncomfortable with more differentiated pay; but my guess is that it was the lower performers. High-impact performers of the future will be able to demand and receive substantially more pay than their lower performing peers. A “socialistic” compensation plan combined with lowered potential for promotion leads to an “average” workforce.

6) Relax the culture.

In addition to reducing bureaucracy, high- performing, high-tech companies like Netscape, Sun Microsystems, and AT&T Wireless (formerly McCaw Cellular) are known for providing freedom in dress code, scheduled hours, and lifestyle choices. While employees work very hard, they appreciate the lack of rules, regulations, and restrictions that can inhibit their freedom without increasing their productivity.

7) Provide intrapreneurial opportunities.

Gifford Pinchot (inventor of the term intrapreneur) has shown how major corporations can provide opportunities for semiautonomous enterprises to operate within the larger corporate structure.

By allowing high-potential leaders to “run a business” inside a larger business, corporations can gain commitment while simultaneously developing people. People who see opportunities for “ownership” and personal development are much more likely to stay with the organization.

In the past when a high-impact performer in a major corporation was offered a position at another company, the employee was likely to say no. Most managerial and professional jobs offered good pay, job security, promotion potential, and status.

Today the high-impact employee is much more likely to say yes. To retain such talent in the future, organizations will need to take decisive action.

Only those organizations able to create a dynamic new human resource model will retain the high-knowledge talent needed to succeed in tomorrow’s globally competitive environment.

Life is good.

Marshall

UPCOMING EVENTS:

July 25, 2008: Join me for a special live conversation on Friday July 25th with Learn From My Life. This 60 minute will be driven by your questions and will enable us to drill deeper into the key behavioral changes that will make you a better leader and more accomplished individual.

August 1, 2008 - Dartmouth - Tuck Executive Program

August 25-26, 2008 - Indian School of Business - Hyderabad

September 15, 2008 - New York - SHRM - contact Marshall if interested

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I was privileged to hear General Mills CEO Steve Sanger tell 90 of his colleagues: “As you all know, last year my team told me that I needed to do a better job of coaching my direct reports. I just reviewed my 360-degree feedback. I have been working on becoming a better coach for the past year or so. I’m still not doing quite as well as I want, but I’m getting a lot better. My coworkers have been helping me improve. Another thing that I feel good about is the fact that my scores on ‘effectively responds to feedback’ are so high this year.”

While listening to Steve speak so openly to coworkers about his efforts to develop himself as a leader, I realized how much the world has changed. Twenty years ago, few CEOs received feedback from their colleagues. Even fewer candidly discussed that feedback and their personal developmental plans. Today, many of the world’s most respected chief executives are setting a positive example by opening up, striving continually to develop themselves as leaders.

In fact, organizations that do the best job of cranking out leaders tend to have CEOs like Steve Sanger who are directly and actively involved in leadership development. That has certainly been my experience.  This has also been confirmed by Hewitt Associates, one of the largest HR consulting firms. Hewitt and Chief Executive magazine put General Mills on their latest list of the top-20 companies for leaders, among such familiar names as IBM and General Electric.

Hewitt found that these organizations tend to more actively manage their talent. They put lots of focus on identifying high-potential people, better differentiate compensation, serve up the right kinds of development opportunities, and closely watch turnover. But crucial to all these efforts were CEO support and involvement.

No question, one of the best ways top executives can get their leaders to improve is to work on improving themselves. Leading by example can mean a lot more than leading by public-relations hype.

Michael Dell, whose company made the Hewitt list, is a perfect example. As one of the most successful leaders in business history, he could easily have an attitude that says, “I am Michael Dell and you aren’t! I don’t really need to work on developing myself.”

Michael, however, has the opposite approach. He has done an amazing job of sincerely discussing his personal challenges with leaders across the company. He is a living case study from whom everyone at Dell is learning. His leadership example makes it hard for any leader to act arrogant or to communicate that he or she has nothing to improve upon.

Johnson & Johnson, tied for first on the top-20 list, has successfully involved its executives in leadership development. Its CEOs and top executive team regularly participate in a variety of leadership-building activities. Having a dialogue with the CEO about his business challenges and developmental needs makes it a lot easier for employees to discuss their own business challenges and developmental needs.

Executive candor can even help turn around a troubled company. Consider Northrop Grumman, the aerospace defense contractor. CEO Kent Kresa inherited a company that had a poor reputation for integrity, a battered stock price, and an unfortunate reputation as one of the least-admired companies in its industry. His leadership team reversed the company’s poor image and engineered an amazing turnaround – ultimately becoming the Forbes’ most-admired company.

From the beginning of the process, Kent led by example. He communicated clear expectations for ethics, values, and behavior. He made sure that he was evaluated by the same standards that he set for everyone else. He consistently reached out to coworkers. He didn’t just work to develop his leaders–he created an environment in which the company’s leaders were working to develop him.

Unfortunately, in the same way that CEO support and involvement can help companies nurture leaders, CEO arrogance can have the opposite effect. When the boss acts like a little god and tells everyone else they need to improve, that behavior can be copied at every level of management. Every level then points out how the level below it needs to change. The end result: No one gets much better.

The principle of leadership development by personal example doesn’t apply just to CEOs. It applies to all levels of management. All good leaders want their people to grow and develop on the job. Who knows? If we work hard to improve ourselves, we might even encourage the people around us to do the same thing.

Life is good.

Marshall

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The most common behavior problem I have found in the executives I have worked with is an obsession with winning - and this isn’t just CEO’s.

It’s common in most highly successful people, including me. When the issue is important, naturally we all want to win. But if it’s trivial, we still want to win. Even if it’s not worth our time, or it’s to our disadvantage, we often try to win anyway.

Here is an example of what I’m talking about.  You want to go to dinner at restaurant X. Your spouse wants to go to dinner to restaurant Y. You have a heated debate. You go to restaurant Y. The food’s bad, the service is awful. Now you’ve got two options.

Option A - critique the food, point out to your spouse how wrong he or she was and how this debacle could have been avoided if he or she had listened to you. Option B - be quiet, eat the food, and try to have a nice evening.

What do 75% of my executive clients say they would do in this situation? Critique the food. What do they agree they should do? Shut up. If they do a cost-benefit analysis, they realize that their marriage is more important than winning the argument.

So I tell my clients, “Before you get into any conflict, take a deep breath and ask yourself, ‘Is it worth it? What do I have to gain by winning? What do I have to lose?’ “

A related problem is what I call adding too much value. Imagine you’re the CEO. I come to you with an idea that you think is very good, but rather than just say, “Great idea!”, your tendency - because you have to win - is to say, “Good idea, but do it this way.”

Well, you may have improved the quality of my idea by 5%, but you’ve reduced my commitment to executing it by 30% because you took away my ownership.

The higher up you get on the corporate ladder, the more you need to make other people winners, and not make it about winning yourself.

One of my clients said once he got into the habit of taking a breath before he talked, he realized about half of what he was going to say wasn’t worth saying. Even though he thought he was right, he realized he had more to gain by not winning.My parting advice:  Don’t always insist on winning.

Sometimes you have more to gain by not winning.

Before you get into any conflict, ask yourself what you have to gain by winning, or what you stand to lose.

Life is good.

Marshall

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I worked with an executive who was a very dedicated and well-organized leader. In the past, she always took pride in her ability to juggle a high-pressure job and still maintain a sane personal life with her husband and two young kids. As a devoted mother, she always tried to be home by 6:30 each night to spend time with her children. Her staff considered her to be a great boss. She was an excellent listener and kept her door open to everyone.

One unexpected outcome for her openness and inclusion was that she began to make more and more excuses for working late. Soon she was regularly at her desk until 9:30 or 10 p.m. At first, she thought it was simply because she loved her job. But as she analyzed the problem, she realized it had nothing to do with her love for her work.

Her staff depended on her too much.

One of the potential dark sides of power is creating dependency. Great leaders know how much they depend on the people in their organizations. They don’t just count on the power of their positions to get things done; they personally create the kind of loyalty and respect that inspires people to “take the hill” even under the most difficult circumstances. But dependency is a two-way street. The more the leader is respected and admired by the staff, the more the staff may feel the need to gain the approval of the leader.

The currency of access can be seen as a sign of importance and acceptance. Staff members often assume that if their leader chooses to spend her limited time with any one person, that person’s ideas and opinions must be uniquely valued. In some cases this may play out as a grab for face time with the manager and can lead to a dependency that becomes trouble.

This executive had created an environment where getting face time with her was as easy as going to the ATM. This developed into a never-ending spiral where she could never leave the office. People were always coming by, saying, “I just need a couple of minutes of your time.” As we all know, a “couple of minutes” always means more than a couple of minutes. She tried to give her staff whatever they needed. It just seemed as if they needed too much.

She came up with a wonderful idea–one that I hope will help you the next time you feel trapped by a staff that wants more than you can give. She set up one-on-one meetings with each of her direct reports to discuss their responsibilities and her responsibilities.

First she asked each person, “Let’s review your key areas of responsibility. Are there places where I can let go? Are there other instances where my help can make a big difference?”

Her staff acknowledged that they really didn’t need her input on many decisions. They had just gotten used to checking in, in a way that was probably not the best use of anyone’s time. Each person was also able to focus on areas where her involvement was having a real positive payoff.

Her second question involved her areas of responsibility. She asked, “Do you ever see me doing things at my level that I don’t need to be doing? Are there activities that I could be delegating to others?” Every person had at least one good idea of how she could let go of part of her work, helping her simultaneously save time and develop the skills of each member of her staff.

She thanked everyone and implemented almost all of their suggestions. She realized that while part of the problem was their need to depend on her, another part was her need to feel important and needed by them.

Follow this course, and face time will have as much value as Confederate paper. Within a year or so, employees will be developing on the job so well that they may need to have a discussion about how they need less face time and more out-of-my-face time from you.

Life is good.

Marshall

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Upcoming Events:

May 29, 2008 - Helping Successful Leaders Get Even Better - and Helping CEOs ‘Pass the Baton’ - Register

June 9, 2008 - San Francisco - Institute of Management Consultants

June 12, 2008 - London - “What Got You Here Won’t Get You There” The Comedy Store

June 19, 2008 - Minneapolis - Training and development professionals - all day

July 1, 2008 - San Diego - ASTD

July 8, 2008 - Webinar: “What Happy Coaches Know … The Science of Happiness” free - register online

August 1, 2008 - Dartmouth - Tuck Executive Program