Sunday, November 28, 2010

Is December a Month to Reflect or to Panic?

At this time of year, with the end of the year approaching, most organisations will soon find themselves operating at the extremes; the retail sector, for example, can find this the busiest time of the year (hopefully); and other business sectors can come to a virtual standstill.

Organisations in the SME sector, especially, often finds themselves in a reactive ‘panic’ trying to finish outstanding ‘tasks’ before the December holidays; with little time to reflect on the year they’ve just had. Where reflection would include, which objectives they succeeded in reaching, those they didn’t, changes they didn’t foresee coming and how they reacted, opportunities lost, and threats combated. December should be a time to reflect and review the year gone by; highlighting lessons that have been learnt at all levels in the business.

December is important for another reason, especially for organisations whose staff are going to have some extended holiday – and that is to remind the organisation of the motivational challenges for the year to come, before they go on leave. The reason for this is that January will come around soon enough; and you want all your employees to be refreshed when they return, focused and excited about the year ahead.

It’s in this hectic period before many organisation go on holiday that these two important business principles are often forgotten. This means that the leadership misses the ideal opportunity for strategic reflection and employee motivation, claiming to be ‘just too busy’ and ‘putting things off’ until next year. Yet this period is a perfect time to re-motivate, re-focus and re-energise the organisation for the year ahead; giving them something to look forward to. Hence the organisational leadership should find the time for reflection and review before the opportunity passes them by.

This is especially true considering the global economic climate and the past year most organisations have had to deal with – if you are a SME and have survived the year, however bad it might have been, you should be proud of what you’ve achieved. So in between the end of year parties and the rush to get last minute tasks completed, ensure that you use this opportunity and find the time to be open and transparent with your organisation about two key business principles;

1) How has the past year gone, and what has been achieved?
2) What are the motivational challenges for the year ahead?

Why? Because you want your employees to end the year, proud of what they have achieved and to start the next year motivated to tackle the new challenges ahead.

Sunday, November 21, 2010

Are You a Transformational Leader?

Wang and Huang state in a 2009 article, that “in the last few decades, within the field of leadership, transformational leadership behaviour has come to represent the most effective form of close engagement between leaders and followers that motivates the latter to perform beyond their transactional agreements. Robbins (2001) defined transformational leaders as, leaders who provide individualised consideration and intellectual stimulation, and who possess charisma,” (p.381).

Yet research also tells us that many employees in leadership positions at various levels of an organisation, and especially leaders of small to medium organisations still seem to know very little about the different leadership styles, let alone which are recommended; as well as the key behavioural attributes and benefits of each.

If was the late Bernard Bass (founding editor of the leadership quarterly journal) who back in 1990 attributed four behavioural characteristics to a transformational leader: charisma, inspirational motivation, intellectual stimulation and individualised consideration. It was only later, in 2003, when John Antonakis, Bruce Avolio and Nagaraj Sivasubramaniam replaced the characteristic of charisma with, what they termed, idealised influence.

Wang and Huang (2009) remind us that “a leader only possesses idealised influence if his or her followers seek to identify with, and want to emulate, him of her. This type of leader is admired, respected and trusted.” Further, “transformational leaders behave in ways that;

1) Motivate and inspire their followers by providing meaningful challenges;
2) Encourage followers to envision attractive future states, which they can ultimately envision for themselves; and
3) Aim to expand their followers efforts in terms of innovativeness and creativity by questioning assumptions, reframing problems and approaching old problems in new ways;” (p.381).

Research has also linked transformational leadership with levels of emotional intelligence. Where, for example, Wang and Huang mention that “emotional intelligence is an emerging topic within psychological, educational and management research, and that it was Daniel Goldman back in 1995 who suggested that the best predictor of who eventually emerges as a leader is based on emotional intelligence (EI), which includes abilities such as;

Empathy; and
Social Skills;” (p.382).

There appears to be an unfortunate assumption, by some, that once they have ‘made it’ to a leadership level, that they, de facto, must be a good leader. There can be a reluctance to engage in leadership analysis, often due to their own insecure behavioural traits, that tell the ‘leadership incumbent’ to avoid self-analysis, as this could be their downfall. Hence, they often find it easier to denounce years of practical leadership studies and research for perceived self-preservation. Organisations, especially corporate boards and business owners, should take a fresh look at leadership and leadership development; as it is not there to make individuals fail, but to help organisations succeed.

The findings from Wang and Huang’s study “indicate that leaders exhibit more transformational leadership behaviour when they have the ability to perform self-emotional appraisals; others’ emotional appraisals; regulation of emotions and constructive use of emotions. Their findings support the view that emotional intelligence is an important variable for understanding and predicting transformational behaviour. Their results also contribute further evidence that transformational leadership influences not only individual level consequences, but also group level consequences,” (p.389).

In the last few years transformational leadership has become one of the dominant leadership theories and applications for successful organisational development. Occasionally as a leader, it’s worth stepping back and asking; are you a leader who is admired, respected and trusted by your followers and your peers – do people in your organisation strive to be like you? An honest reflection will help you understand the difference between being in a leadership position and being an effective transformational leader.


Yung-Shui Wang and Tung-Chun Huang. (2009). The Relationship of Transformational Leadership with Group Cohesiveness and Emotional Intelligence. Social Behavior & Personality: An International Journal; Vol. 37, Issue 3, p.379-392.

Sunday, November 14, 2010

Job Satisfaction: A Realistic Expectation or a Utopian Myth?

One of many business topics most talked about in the 21st Century, so far, has been talent management, and how to attract and keep the best talent for your organisation. Attracting talent and keeping talent require two different strategies, but shouldn’t creating job satisfaction be at least part of the focus for talent retention?

Job satisfaction can mean different things to different people, though it is likely to include key elements like, recognition, reward, business environment, being treated with respect, meeting career aspirations, having the support from the organisation (in decision making), business challenges and personal development.

Linking job satisfaction to talent retention will lead to increased motivation and increased personal performance. Job satisfaction should become a strategic goal for the top team or organisation as a whole, ensuring you have a team of highly motivated, highly productive employees. It all seems logical; so is this happening in organisations today? Are today’s leaders interacting with their management teams and key employees to find and respond to their needs when it comes to job satisfaction and talent retention?

Many leaders may not even be aware of the different ‘theories and models’ in measuring job satisfaction. In a 2008 article Timothy Judge, Daniel Heller and Ryan Klinger wrote that “increasingly, (job satisfaction) research has coalesced around three theoretical approaches: positive affectivity (PA)/negative affectivity (NA), the five-factor model of personality (FFM), and, most recently, Judge, Locke, and colleagues’ core self-evaluations (CSE) taxonomy.
Each of these approaches has its merits. The PA/NA framework is advantaged by its affective nature, making it well suited to the affective nature of job satisfaction. The FFM has the advantage of being the most popular and widely investigated personality taxonomy, whose traits have proven their relevance to many criteria in organisational psychology, including job performance, leadership, and work motivation. Although CSE is the newest taxonomy, each of the core traits comprising the taxonomy; self-esteem, locus of control, generalised self-efficacy, and emotional stability have been shown to be conceptually and empirically relevant to job satisfaction. These theoretical frameworks have provided important support for the dispositional source of job satisfaction. At the same time, it is hard to know what to make of the results cumulatively, as researchers who test one framework rarely mention the other, much less formally compare the frameworks”, (p. 362).

But not knowing the current theories and research shouldn’t be an excuse for not being focused on understanding what creates job satisfaction with your employees, especially if your organisation really wants to retain its talent.

There have been numerous journal articles over the last ten years to help organisations understand job satisfaction, and how this has a positive impact on organisational culture, cooperation, motivation and performance - and most importantly how job satisfaction should be an integral part of your talent retention strategy.

These journal articles include titles like; Do What You Love and Love What You Do by William Locander and David Luechauer (Marketing Management, 2010); Linking Empowering Leadership and Employee Creativity: The Influence of Psychological Empowerment, Intrinsic Motivation and Creative Process Engagement by Xiaomeng Zhang and Kathryn Bartol (Academy of Management Journal, 2010); Surviving the Boss from Hell by David Silverman, Gini Scott, Brad Gilbreath and Lauren Sontag, (Harvard Business Review, 2009); Total Quality Management Now Applies to Managing Talent by Howard Stevens, (Journal for Quality and Participation, 2008); The Leadership Advantage: How Best Companies are Developing their Talent to Pave the Way for the Future by Robert Fullmer and Jared Bleak, (Personnel Psychology, 2008); Talent Management in the 21st Century: Help Your Company Find, Develop and Keep its Strongest, (Journal of Quality and Participation, 2006)…to name a few…

So if you really want to retain your talent and take talent management seriously, then spend the time to find out how your employees define job satisfaction. Re-quoting JFK, maybe organisations shouldn’t just be asking ‘what can our employees do for us?’ but also asking ‘what can we do for our employees?’


Judge, T.A., Heller, D. and Klinger, R. (2008) The Dispositional Sources of Job Satisfaction: A Comparative Test. Applied Psychology: An International Review; Vol. 57, Issue 3, p361-372.

Sunday, November 7, 2010

Focus on Your Customer Not on Your Price

With the effect of the global recession still being felt around the world, organisations may be tempted to look at price cutting strategies to retain their market share, yet some researchers suggest that this may not be the most sensible approach and could lead to an eradication of your future market share. Marco Bertini and Luc Wathieu wrote in the Harvard Business Review, May 2010, that “many, perhaps most, markets today are mature enough to feature intense price-based competition. The constant undercutting to capture customers sometimes spurs efficiency gains, but more often damages brand equity and erodes profit margins. To make matters worse, customers in these markets develop low expectations and grow disengaged: They fixate on price and lose interest in marketing communications and all but the most radical innovations,” (p.85-86).

When developing ‘survival’ strategies, organisations have to look beyond the short-term to see the future ‘state’ they are proposing. A price reduction can always be one of your strategic options, but you need to ‘play’ this scenario out to fully understand the implications it will have on your business, which goes far beyond a reduction in profit margin.

When considering a price reduction strategy to ‘keep’ your existing customer happy, you should consider and analyse the following, which may have significant medium to long-term implications for your organisation;

1) When the market turns the customer can be so fixated on your price that you will find it hard, to impossible, to increase prices back to pre-recession levels. Leading to a significant loss of revenue and brand/image status;

2) If your price reduction attracts new customers do you have the capacity to meet this new demand and what are the implications on the organisation, both short-term and long-term. Increasing capacity now, only to see it eroded when the market turns again can leave the organisation in a further financial crisis;

3) What implications does a short-term price reduction have on perceptions of your organisation and brand in your market?

As Roger Martin (2010) says, “determining what your customer’s value and focusing on always pleasing them is a better optimisation formula. Of course, companies face obvious constraints on customer satisfaction; they’d quickly go bankrupt if they made customers happier by charging ever-lower prices for ever greater value. Rather, companies should seek to maximise customer satisfaction while ensuring that shareholders earn an acceptable risk-adjusted return on their equity,” (p.62).

In a state of reactive ‘panic’ it can sometimes be too easy for organisations to rush the strategic decision making process, and go for the price cutting option. This can seem the easiest option to implement at the time and perceived to give immediate benefit to the organisation, without analysing the medium to long-term effect on the business. The excuse can be that if we don’t so something now, we won’t have a medium to long-term to worry about - but the reverse is just as true, if you make the wrong strategic decisions now, without proper and effective business analysis, at best your organisation will never fully recover and at worst it won’t survive the upturn in the market.

When customers only consider price in their buying decision, they have effectively commoditised the product. Bertini and Wathieu highlight how “research shows that commoditisation is as much a psychological state as a physical one. A commoditised market is one in which the buyers display rampant scepticism, routine behaviour, minimal expectations, and a strong preference for a swift and effortless transactions regardless of product differentiation. The key, therefore, to escaping commodity status is not what you do to your product; it’s what you do to your customer. You must find a way to reengage a buyer who is past caring – and to do that you must make the customer sit up and take notice,” (p.86).

Even in times of crisis it’s worth spending the time to analyse and define the best strategic options to take you forward as an organisation, ensuring sustainable growth, rather than a quick and easy short-term fix - often what seems the easiest option is not the best option.


Bertini, M. and Wathieu, L. (2010). How to Stop Customers from Fixating on Price. Harvard Business Review, Vol. 88, Issue 5, p.84-91.

Martin, R. (2010). The Age of Consumer Capitalism. Harvard Business Review., Vol. 88, Issue 1/2, p.58-65.