Saturday, December 31, 2016

A Year in Review: 2016


There’s no doubt that 2016 will be a year that will be more remembered through history than most other years in recent times – yet we have to wait to see whether it will be remembered from a positive or negative perspective.
 
One thing that should be clear going into the future is that ‘opinion polls’ need to be rethought if they are going to accurately predict outcomes.
 
First the British public, according to the polls, were overwhelmingly going to vote to stay in Europe – and yet when the time came the British public voted to leave Europe – BREXIT, as it is now known. This referendum was meant to show the true power of democracy. A vote had taken place in the House of Commons agreeing to the referendum on Britain’s future in Europe – and yet, ever since the vote went to the leave camp, seemingly the wealthier members of the British population have been taking the Government to the English courts, challenging the process - at most trying to reverse the vote and at the very minimum trying to disrupt the process. I guess this is rich person’s view of democracy.
 
How this all ends, has still to be written. The media, in their infinite wisdom, have taken sides on the debate and are plying their own ‘fear and panic’ amongst the population, depending which side of the divide they reside.
 
The craziest protestations come from those that are demanding the British government make their strategy and negotiation stance public – before the negotiations with Europe take place. Yet anyone who’s negotiated in a business context knows that the last thing you do is show your hand prior to negotiations – unless you’re playing games and misdirecting your opponents with ‘false’ information – otherwise you are obviously going to be negotiating from a weakened position; it would be like playing poker where your opponents can see your hand.
 
Europe must be smiling to themselves – hoping the do-gooders get their way and the Prime Minster has to reveal the government’s strategy before the negotiations start. You don’t need to be a mind reader to guess how negotiations will go for Britain if this scenario plays out.
 
The second time the polls were continually wrong was with Donald Trump. He wasn’t even expected to become the Republican nominee – let alone the next President of the United States. How the polls got this one so wrong should be weighing on people’s minds – if they actually cared. The media love a drama – so news, isn’t news anymore – and news channels are more focused on entertainment than factual global information and insights.
 
Whether you like Trump or not – he’s clearly a brilliant marketer and strategist.
 
Talking with Americans – it seems a sad reflection on the country that no one particularly liked either candidate – and Trump was considered the better of the two evils. What that says for the US going forward – only time will tell. Though if you like to take the odd bet – it might be worth looking at the odds on Ivanka Trump becoming the first women President of the United States in the near future. Where the Trumps will take over the dynasties of the Bush’s and the Clinton’s.  
 
Lots of other events happened in 2016, but it will be remembered most going forward for these two above.
 
What does this mean for business? It simply means that businesses should be doing what we’ve been taught of years. Organisations need to be flexible and resilient, constantly looking at opportunities and being aware of the threats to their business. Hence they need excellent leadership that focuses on opportunities and who create a motivated and innovative workforce that thrives on positive ‘change’. What is definite is that, even though there will be some global chaos in 2017, this definitely means that there will be real business opportunities for those that are willing to look forward – and not get stuck in the present, sulking that ‘things are changing and aren’t going their way’.
 
We live in an ever changing world, where most governments and the main stream media seem to be so out of touch with citizens in their own countries, let alone on the international stage.
 
So my message for 2017 is to be brave, be true to yourself, stick to the basics, constantly look for opportunities and don’t listen to the ‘naysayers’ – where there are threats, there are always opportunities – so see you cup half full (not half empty); focus on the positive and enjoy the journey.
 
Finally, as in past years, let’s pause for a moment and remember those who have left us during 2016;
 
In January we lost David Bowie, just after releasing his 25th album; Alan Rickman, of Harry Potter fame and the first Die Hard movie; the Eagles frontman Glenn Frey; and Sir Terry Wogan, a broadcaster know by many in the UK.
 
In February we lost Harper Lee the author of To Kill a Mocking bird, which became standard reading for millions of young people.
 
In March we lost Beatles producer George Martin; Emmerson, Lake and Palmer founder and keyboard player Keith Emerson; and British comedian Ronnie Corbett.
 
In April we lost Prince due to an accidental overdose; UK comedian Victoria Wood and agony Aunt Denise Robertson.
 
In May we lost Burt Kwouk best known for playing alongside Peter Sellers as Clouseau’s manservant.
 
In June we lost Muhammad Ali, who was more than just a boxing legend, he was an inspirational man to many.
 
In July we lost Roscoe Brown who’d been one of the Tuskegee Airmen in WWII and Jack Davis co funder of Mad magazine;
 
In August we lost comedy legend Gene Wilder and Kenny Baker who played R2-D2 in the Star Wars franchise.
 
In September we lost golfing legend Arnold Palmer.
 
In October we lost Pete Burns, the Dead or Alive singer and Jean Alexander, better known as Hilda Ogden in the UK soap, Coronation Street.
 
In November we lost singer-songwriter Leonard Cohen; Andrew Sachs, better known as playing Manuel in Fawlty Towers with John Cleese; actor Robert Vaughn and Sir Jimmy Young.
 
And finally in December we lost singer-songwriter George Michael; actress Zsa Zsa Gabor; rock superstar Greg Lake; Status Quo guitarist Rick Parfitt; actress Carrie Fisher and then the day after her death, her mother Debbie Reynolds.
 
Life is short so focus on the things that matter to you!
 
Wishing all readers a healthy, happy and prosperous 2017.

Sunday, November 27, 2016

How Often Do You Receive Performance Feedback?

In an article in this month’s Harvard Business Review Lori Goler, Janelle Gale and Adam Grant mention how “performance reviews are awkward. They’re biased. They stick us in boxes and leave us waiting far too long for feedback. It’s no surprise that by the end of 2015, at least 30 of the Fortune 500 companies had ditched performance evaluations altogether,” (p.92).
 
I don’t fully agree with their comment about the link between feedback and performance reviews – as I think they are mutually exclusive and that whatever your approach to performance reviews, feedback shouldn’t be something you have to wait ‘far too long for’ and should be a regular event occurring on a weekly/monthly basis where the employee sits with their immediate boss on an one-on-one basis for a honest and forthright discussion about what’s going well; what isn’t (if anything); areas where improvement could be made (which might lead to development needs) and what’s going to happen in the next ‘period’ of time.
 
Feedback is different to ‘acknowledgement’ where acknowledgement is or should be immediate following a ‘job well done’ and where feedback is a more formal regular event. Feedback isn’t just the responsibility of leaders, it’s also the responsibility of employees to seek feedback – so if you aren’t getting feedback on a regular basis it’s your responsibility to ask for it.
 
What’s true is where Goler, Gale and Grant highlight how “as researchers pointed out in a recent debate in Industrial and Organizational Psychology, ‘Performance is always rated in some manner.’ If you don’t have formal evaluations, ratings will be hidden in a black box.” In today’s world we are rating ‘things’ all the time, virtually instantly, and ‘performance’ isn’t any different. But how we ‘rate’ and what we do with this ‘rating’ defines good leaders, from poor leaders (and good organisations from bad ones). If you don’t have formal evaluations then you shouldn’t be hiding your ‘tendency’ to rate in a black box – you should be totally transparent with your ‘black box’ and this is done through regular transparent feedback. ‘Black box’ mentalities lead to distrust and demotivation within the team, where there is no chance of honest feedback taking place and employees find themselves in a ‘toxic’ environment.
 
Goler, Gale and Grant mention how “we all want performance evaluations to be fair. That isn’t always the outcome, but as more than 9,000 managers and employees reported in a global survey by CEB, not having evaluations is worse. Every organization has people who are unhappy with their bonuses or disappointed that they weren’t promoted. But research has long shown that when the process is fair, employees are more willing to accept undesirable outcomes. A fair process exists when evaluators are credible and motivated to get it right, and employees have a voice. Without evaluations, people are left in the dark about who is gauging their contributions and how.”
 
The reality is that performance evaluations simply aren’t ‘genuine’ performance evaluations if they aren’t honest and transparent. All the talk about ‘black boxes’ etc doesn’t belong in the same sentence as performance evaluations; and it’s because they now seem to appear in the same sentence that performance reviews have become misunderstood and gained a bad reputation – but it isn’t the concept of performance reviews that is bad, it’s the people that have misused them for decades that have made them bad.
 
Goler, Gale and Grant highlight how “at Facebook, to mitigate bias and to do things systematically, we start by having peers write evaluations. They share them not just with managers but also, in most cases, with one another – which reflects the company’s core values of openness and transparency. Then decisions are made about performance: Managers sit together and discuss their reports face-to-face, defending and championing, debating and deliberating, and incorporating peer feedback. Here the goal is to minimize the ‘idiosyncratic rater effect’ – also known as personal opinion. People aren’t unduly punished when individual managers are hard graders or unfairly rewarded when they’re easy graders.”
 
Two of the authors of the article are from Facebook, Lori Goler and Janelle Gale and though it’s good that they are trying to use performance reviews effectively, it’s sad that they think they need their own ‘theory’ to mitigate ‘bias’ – as there have been tips and tricks on how to mitigate performance review bias for decades. One of the simplest, wasn’t to rate performance on an annual basis in the first place it was to give regular reviews based on a ‘management by objectives’ approach. This professional approach meant that ‘performance reviews’ linked with regular ‘feedback sessions’ to form a constant review of performance that didn’t leave employees in any doubt about how they were doing; and became a seamless ‘performance review’ that left employees motivated, engaged and inspired to over-achieve against their objectives on a continuous basis.
 
Goler, Gale and Grant state that “many companies that are abandoning performance evaluations are moving to real-time feedback systems. That is an excellent way to help people repeat their successes and learn from their failures. But it doesn’t help them – or the organization – gauge how they’re doing overall.” Again I have to totally disagree with their statement that ‘it doesn’t help them gauge how they’re doing overall’ and to me the statement sadly shows a misunderstanding about managing performance, reviewing performance and the art of ‘feedback’. Done correctly there is no doubt in the employees mind about ‘how they’re doing overall’ – and it’s scary that a company like Facebook could be so confused and misinformed about what regular performance feedback is all about.
 
The most important aspects of ‘great’ performance feedback is that;
 
It should be a regular, formal process.
 
Leaders and employees should be ‘trained’ in how to give and receive feedback – a skill that is rarely taught and hence where many of the problems start;
 
Feedback is specific, constructive and makes a real impact;
 
Feedback is genuine and honest, discussed in a ‘safe’ environment - which only exists in great organisations, with great leadership and a strong culture of transparency;
 
Feedback is based on specific objectives that leads to performance improvement and development needs as and when necessary;
 
The employee learns how to receive feedback in a constructive and not a defensive way; and to seek clarification from the feedback in a positive way, that makes a difference to their performance.
 
If you give regular feedback in the right way, you won’t need to only ‘rate’ your employees once a year; as through regular, honest feedback all your employees will be performing at their optimal level of performance balanced between the organisations ‘present and future needs’ – it’s a genuine win-win for everyone. So let’s take this opportunity to go back to basics; teach our leaders and employee’s how to give and receive feedback; and get back to giving regular, honest feedback to our employees – it will make a huge difference to the employees and the organisation.
 
 
Reference:
 
Goler, L., Gale, J. and Grant, A. (2016). Let’s Not Kill Performance Evaluations Yet. HBR, November, p.90-94.

Sunday, October 30, 2016

Who Inspires You?

Having someone in your business life who inspires you to succeed and achieve your goals seems to be the exception than the rule these days. I still remember the managers I had early in my career who were truly inspirational and in no small way helped me create the solid foundation on which I was able to build my career.
 
Talking to thousands of employees over the last 40 years there’s no doubt about how much difference an inspirational leaders makes – not just to the employees level of commitment and motivation – but the impact these leaders have on improving and optimising organisational performance, as they help create a culture that wants to ‘over achieve’ in areas that are synergistic to the employee and the organisation – creating a win-win for everyone involved.
 
So it seems sad that in the early years of the 21st century, today’s leaders seem to lack the basic skills needed to inspire employees and further seem to lack the desire to inspire them in the first place. Many leaders seem to look inwardly rather than outwardly – putting themselves and their career path and ‘status’ before anything else – possibly fearing that they might lose control of their ‘own’ future and that others may excel and be noticed more than them.
 
Yet the inspirational leaders I worked with had both – successful careers and created successful careers for those around them. Rather than being fearful of others excelling, they embraced it and were recognised throughout the organisation for their success in taking their department/organisations to new levels of excellence. These ‘new’ levels of excellence and the inspirational leadership style created yet further incremental increases in performance that could be tracked to the bottom line.
 
In 2013, after interviewing over 100 HR professionals in the US, research by Keas, a company that focuses on employee health and wellness, found on one question - “in your experience, what are the top three Human Resources mistakes that every CEO makes?” - that the top-scoring three responses were:
 
64% – leaders don’t recognize what truly motivates employees
41% – leaders fail to lead by example
32% – leaders don’t make company culture a priority
 
Where all three of these actions (or non-actions) send a loud, clear message to employees: you are not that important to me, (Anderson, 2013).
 
Just the fact that 64% of leaders don’t even recognize what truly motivates employee’s highlights today’s problems around inspirational leadership. It’s a fundamental requirement of a leader to know their people and especially what motivates them. These are basic conversations that usually take place at the ‘interview’ stage and then on a regular basis each and every year after that.
 
This is then backed up by the next two traits – ‘failing to lead by example’ and ‘not making company culture a priority’. It seems that many leaders today see themselves ‘above’ those that work for them and hence don’t see a need to lead by example. They are the boss, they have the power – “you simple exist to do my bidding”. In fact it wasn’t that long ago I heard a leader define their staff as “people whose job it is to make me look good.”
 
Leadership seems to be going backwards – partly because the inspirational role models that exist out there in the global economy don’t even see the light of day. Where the media is obsessed with reporting ‘negative’ behaviours these days and seem to fail to grasp the need to show future generations ‘positive’ behaviours in the work place so they can see the benefits early in their lives and might even be positively rather than negatively influenced.
 
Whether we want to openly admit it or not – we all want to be led by an inspirational leader – as if nothing else they make our jobs so much more enjoyable and give the opportunities for us to challenge ourselves, if we want to.
 
In 2013 IBM asked 1,700 CEOs in 64 countries, “what do top executives want from their leaders?” The three leadership traits that most mattered were; (1) the ability to focus intensely on customer needs, (3) the ability to collaborate with colleagues and (3) the ability to inspire. (Zenger and Folkman, 2013).
 
Zenger and Folkman’s research found that “some of what (inspirational) leaders did was specific and tangible. For example, they set stretch goals with their team. They spent time developing their subordinates. They engaged in highly collaborative behavior. They encouraged those about them to be more innovative.”
 
Other things Zenger and Folkman identified were somewhat less specific and less tangible, yet are probably the real traits that make them stand out of other wannabe inspiring leaders; where “these inspirational leaders were more adept at making emotional connections with their subordinates, for instance. They were better at establishing a clear vision. They were more effective in their communication and willing to spend more time communicating. They were ardent champions of change. They were perceived as effective role models within the organization.”
 
What I’ve found during the course of my career is that inspirational leaders embrace the following key behaviours and traits;
 
1) They ensure that making time for meeting with their employees, one-on-one, on a regular basis is their number one priority;
 
2) They are visionaries and have the ability to communicate these visions in a transparent and compelling narrative, that inspires their employees to want to be part of the journey;
 
3) They are ‘big picture’ focused and can look beyond their own department or organisation; and see short and long-term opportunities;
 
4) There have experienced life to the full (both business and personal); and have usually experienced both significant ‘ups’ and ‘downs’ but learnt real life lessons from both;
 
5) They are principled role models; and never ask people to do things they would never do themselves;
 
6) They are passionate – not just for the future of their organisation – but passionate about all their employees too, knowing that you can’t have one without the other; and finally
 
7) They are both patient and excellent listeners.
 
It’s up to today’s executive boards to embrace inspirational leadership at the top and then ensure these basic behaviours role down the leadership pipeline and become an integral part of the organisations culture.
 
It’s not complicated or rocket science – we just need to bring inspiration back to the work place. The benefits will gleaned by all stakeholders.
 
References
 
Anderson, E. (2013). 3 Simple, Powerful Things Leaders Can Do To Inspire People To Do Great Things. Forbes On-Line, August 29.
 
Zenger, J. and Folkman, J. (2013). What Inspiring Leaders Do. Harvard Business Review On-Line, June 20.
 
 

Sunday, September 25, 2016

Who Gets To Set the Rules of Business?


As we continue our journey into the 21st Century are global businesses setting higher standards for themselves or are they becoming more selfish and greedy?
 
If the latter – maybe we should be asking some basic questions on social media and elsewhere to try and get some substantive change. For example, who gets to set the rules in business? And how well are they doing their job? What values should these rules reflect? What’s fair and how is this defined? And what, if anything, do we owe to one another?
 
The 21st Century has seen large global brands being caught misleading their customers for financial gain. The global financial crisis was a tough time for most consumers across the world, who must have been saddened (and more) to find that many of the financial institutions they trusted to look after their hard earned cash were misleading customers or had colluded to make financial gain through for example rigging forex rates.
 
More recently we had the Volkswagen (VW) emissions cheating scandal allegedly brought about when VW realized that a new generation of diesel motors could not meet United States air quality standards legally. The company officially admitted the cheating to regulators, but not to the public, on September 3, 2015, after the E.P.A. threatened to refuse to allow 2016 models to go on sale.
 
According to the documents reviewed by The New York Times, a confidant of Mr. Winterkorn (the Chief Executive of Volkswagen at the time), wrote to him in May 2014, warning that regulators might accuse the carmaker of using a so-called defeat device - software that recognized when the car was being tested for emissions and activated pollution-control equipment. At other times, the cars produced up to 35 times the allowed amount of nitrogen oxide emissions, which are linked to lung ailments and premature deaths.
 
On September 1, 2016 the Australian Competition and Consumer Commission (ACCC) sued Volkswagen AG (VW) and its local subsidiary for misleading customers. The suit alleges that VW engaged in misleading or deceptive conduct, made false or misleading representations and engaged in conduct liable to mislead the public in relation to diesel vehicle emission claims. Specifically, the ACCC claims that between 2011 and 2015 VW misled customers in relation to the significantly higher nitrogen oxide emissions being produced by the vehicles, misled customers to believe that the vehicles complied with Australian and European standards and all Australian regulatory requirements, and marketed the vehicles in Australia as being environmentally friendly, clean burning, low emission and compliant with stringent European standards when this was not the case under normal driving conditions. The ACCC claims that this constituted multiple breaches of the Australian Consumer Law. The ACCC is seeking declarations, pecuniary penalties, corrective advertising, findings of fact and costs.
 
On September 7, this year Bloomberg Business Week asked the question “can ExxonMobil Be Found Liable for Misleading the Public on Climate Change? Where it’s alleged that scientists at the biggest U.S. oil company understood as early as anyone that fossil fuel emissions were heating up the earth’s atmosphere. The world’s largest oil explorer by market value had been hit by a pair of multipart investigations by InsideClimate News and the Los Angeles Times. Both reported that as early as the 1970s, the company understood more about climate change than it had let on and had deliberately misled the public about it. One of Exxon’s senior scientists noted in 1977 - 11 years before a NASA scientist sounded the alarm about global warming during congressional testimony - that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels.”
And then there’s Wells Fargo.
 
Two former Wells Fargo & Co employees have filed a class action in California seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, forced to resign or fired. The lawsuit on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees, focuses on those who followed the rules and were penalized for not meeting sales quotas.
 
"Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts," the lawsuit filed in California Superior Court in Los Angeles County said. Wells Fargo has fired some 5,300 employees for opening as many as 2 million accounts in customers' names without their authorization. On September 8, a federal regulator and Los Angeles prosecutor announced a $190 million settlement with Wells.
 
If the fraud isn’t bad enough it’s worth highlighting that institutional investors now want Wells Fargo to reclaim money it gave to Carrie Tolstedt - the executive who oversaw the Wells Fargo unit during the time it carried out a massive fraud. Tolstedt resigned earlier this year with a $124 million severance payment, plus equity.
 
One can sadly Google many other organizations misleading the consumers in some form or other – which begs the current question – who’s setting the rules of business? As individuals ‘we’ have two simple choices – we can either turn a blind eye to forms of corporate corruption and greed and thereby tacitly approving these bad practices, which at a minimum are ripping us off and at worst will destroy the planet – or we can start to ‘fight’ and stand up for the world we want our children and grand-children to inherit from us.
 
If we’re going to put our heads in the sand thinking ‘I have no power to make a difference; I don’t drive a VW or bank with Wells Fargo; or I don’t know what to believe anymore so I just won’t get involved’ – then sadly we’re accepting that it’s okay for businesses to cheat, lie and be focused on selfish greed. In which case why don’t we start teaching our kids the skills required to be good at lying and corruption - as we might as well ensure our future businesses and associated nations are best equipped to maximize this apparent tacitly ‘acceptable’ approach to business.
 
The business ‘buzz words’ of the past few decades have focused on leadership development; corporate governance and corporate social responsibility – in fact many organizations are making millions of dollars supposedly ‘developing’ these importance areas of business.
 
But if businesses are corrupt – then it’s the fault of their leadership; their corporate governance and their approach and belief in corporate social responsibility.
 
One of the key rules of business should be to have stringent corporate governance rules in place to ensure the organization is operating at the highest ethical standards, for the good of their stakeholders, their community and when appropriate the planet; for organizations to embrace and genuinely understand the long-term and sustainable benefit of corporate social responsibility; and to have the right leadership in place to ensure these first to rules are upheld each and every day.
 
When organizations cheat – then the leadership must be held to account and be held personally liable to their stakeholders.
 
Until this happens we are sadly allowing and tacitly approving greedy corporations and institutional investors to make a mockery of the concept of leadership and the accountability that comes with it – and taking the principled role of leadership back to the dark ages.