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.  

Sunday, August 28, 2016

How Effective is Your Team, Really?


There’s a great quote by the author Simon Sinek, who wrote, “a team is not a group of people who work together. A team is a group of people who trust each other.” There’s nothing mind-blowing about this quote on the surface – but how often do teams spend real quality time assessing their genuine cohesiveness? And who’s the right person to be ensuring they have the best performing team, where each member trusts the other, both today and into the future?
 
Trust is a huge issue and not something that can be assessed accurately unless, to some extent, trust already exists within the team. Confused? It’s a bit like the chicken and egg. It’s unlikely that you’ll ever really know if you have a truly high performing, trusting team if the team doesn’t operate in a culture where full transparency is the rule and not the exception – and for transparency to exist you first need at least some degree of trust to be present or a genuine desire to get to a point where the team can trust each other.
 
The general rule in most organizations seems to be to ignore this part of team dynamics and just let the group sort out their problems if and when they arise; tacitly accepting that not everyone is going to get on and allowing levels of dysfunctionality to exist – without fully understanding the impact on team performance and hence optimum output. In fact it seems that unless the underlying mistrust starts to negatively affect short-term performance goals, the problem will be ignored, in most cases, simply because leaders don’t have the confidence and skills to deal with it.
 
This approach fails on so many levels (1) you’ll never optimise your teams true potential; (2) individual team members will not support their colleagues above the very basic level; (3) the team will not innovate best in class solutions due to the distrust among its members; (4) ‘underground’ splits occur in the team where often one section thinks they are superior to another part of the team and gain favour with the leader, creating messy silos of distrusting self-serving sub-teams.
 
Another sad fact about dysfunctional teams are that they are the playground of command and control type leaders. These leaders thrive on their team being dysfunctional as it gives them more power to manipulate the business environment for their own personal gain. They have absolutely no interest in developing a cohesive team, as they fear losing their own slightly misplaced perception of control. Further they do not subscribe to one of the core roles of a leader that being to develop each team member to their optimal potential – as they fear this may threaten their very existence.
 
So how does one reverse this trend? Here are some fundamentals;
 
1) You have to want your team to be the best they can be?
2) You want an authentic team where honesty is a core value – which leads to a trusting environment (note: genuine honesty can be hard initially as team members hear the truth about how they are perceived, often for the first time and their ego’s get dented; but in the medium to long term the team, through focused leadership, get over themselves and focus on a honest future together).
3) You’re prepared to invest the time to build a successful team.
4) You set ground rules so you create an authentic environment, not a bitchy one.
5) You focus on the benefits of building the best team of highly motivated individuals.
6) You’re prepared to set the example.
 
 
So the starting point is for the board and executive team to ensure that they develop a leadership philosophy that rejects any form of command and control leadership; and they set the example to encourage leaders to develop high performing teams as a core responsibility. This means that as a leader you must be prepared to deal with team dynamics head on and be prepared to invest time and effort in developing a culture of trust – however hard that might be in the short term – as failure to develop a team that trusts each other means you will have accepted mediocrity as one of your core business values.  
 
As Patrick Lencioni, author of The Five Dysfunctions of a Team, wrote; “remember teamwork begins by building trust. And the only way to do that is to overcome our need for invulnerability.”
 
Besides reading the theory on team dynamics, business leaders can learn a lot from observing the best sports teams around the world where for example Phil Jackson (former coach and former player, currently serving as president of the New York Knicks) said “the strength of the team is each individual member. The strength of each member is the team.”
 
One strength of great sports team is their authentic communication – it’s one of the things that makes them stand out from the crowd of wannabe teams where, as the author Michele Jennae states “if we don’t communicate, we certainly can’t get much done and if we don’t communicate authentically, what we get done is less effective.” Players on and off the field are authentic about their strengths and weaknesses; they understand their primary team role; but are also prepared to support other teams mates as and when necessary – they know that if their communication isn’t authentic, the team will not play to its best potential and they won’t be the best.
 
It’s worth noting from a business perspective that this sports analogy isn’t saying the ‘dysfunctional’ team might not win – it just won’t win by the margin it could if it was working together as ‘one’ cohesive unit. And this is often where the confusion exists for the business leader – they see their ‘team’ winning and hence assume that things must be ‘good’ and don’t get involved enough in the team dynamics to understand that the winning is more ‘luck’ than due to the team ‘playing together’.
 
So it’s your choice as a leader, are you confident and good enough to truly examine your team dynamics to find out if you have an environment of transparency and genuine trust; and are you prepared to invest time and effort in developing the best team dynamics possible?
 
 
Remember “leadership is not about your ambition. It is about bringing out the ambitions of your team” ― Cheryl A. Bachelder, Dare to Serve: How to Drive Superior Results by Serving Others