3 Ways Good Leaders Get Conversations Wrong

Originally posted on Blanchard LeaderChat:

Male Question Marks Misunderstanding Enigma Men Pop Art Comics RImproving the frequency and quality of conversations that take place inside your organization is one of the best ways to improve the overall quality of your company’s leadership. That’s the message Ken Blanchard and Scott Blanchard share in their latest column for Training Industry Magazine.  With the speed of work, the generational and cultural diversity of the global workforce, and the variety of day-to-day challenges leaders face, the ability to communicate effectively with direct reports may be the defining skill that sets great leaders apart.

And while managers never intend to have unproductive conversations, bad conversational habits can often get in the way of effective communication.  Here are three they recommend that leaders keep an eye on:

Intentionality lapses. Leaders sometimes plunge ahead in an inappropriate setting with negative consequences. For example, you bump into a direct report who has a question, and before you realize it the…

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Pirate’s Agreement

Did you know pirates had a compensation package for injuries, profit sharing and equal voting rights? Below is an excerpt from Pirate Hunters: Treasure, Obsession, and the Search for a Legendary Pirate Ship by Robert Kurson.

Pirate’s AgreementPirate Hunter's

BEFORE EVERY VOYAGE, PIRATES gathered together to commit an unthinkable act: They made every crewman an equal. From the greenest of lookouts to the captain himself, no one would own rights over any other or possess privileges unavailable to all. The men would eat the same meals, earn similar wages, share the same quarters. The captain would exercise absolute authority only in battle; at other times, he would guide the ship according to the pleasure of the crew.

And that was just the start of the madness.

Having made everyone equal, the pirates now put almost everything to a vote. To choose where to stalk prey, they voted. To decide whether to attack a target, they voted. To determine the rules of the ship, the punishment for wrongdoers, division of booty, to maroon or shoot traitors, they voted. And every man’s vote counted the same.

One might have expected these men, who lived lawless lives in the shadow of gallows, to cast their ballots in unpredictable ways. Yet, time and again through the decades that spanned their Golden Age, the pirates seemed to vote exactly alike. Mattera could see the patterns right away. Using his orange highlighter, he began underlining rules that seemed to govern every pirate ship that sailed in the era:

  • Captains were to earn no more than two or three times that of the lowliest deckhand.
  • Every man was to have an equal share of food, liquor, and other provisions.
  • Battle injuries would be compensated according to body part. On one pirate ship, damages were paid as follows:
Lost right arm 600 pieces of silver or six slaves
Lost left arm 500 pieces of silver or five slaves
Lost right leg 500 pieces of silver or five slaves
Lost left leg 400 pieces of silver or four slaves
Lost eye (either one) 100 pieces of silver or one slave
Lost finger 100 pieces of silver or one slave
Internal injury up to 500 pieces of silver or five slaves
Lost hook or peg leg Same as if original limb was lost
  • Anyone caught stealing from the ship’s plunder would be punished, including by being marooned on an uninhabited island.
  • Anyone caught cheating another crewman would have his ears and nose slashed by the aggrieved party, then turned out at the next port.
  • No women were allowed on board. Anyone sneaking a woman onto the ship would be killed.
  • Disputes between crewmen would be settled onshore by duel.
  • Bonuses would be awarded for courage in combat, the sighting of prey, boarding a target ship first, and other heroics.
  • Punishments would be inflicted for cowardice, drunkenness, insolence, disobedience, rape, and any other action that undermined the ship’s primary purpose-to steal.
  • Any unsettled issues would be put to a vote.
  • Every man’s vote carried equal weight.

HBR: How to Spot Hidden Opportunities for Sales Growth

Where will the growth come from? Below is a good blog from the Harvard Business Review by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer.

How to Spot Hidden Opportunities for Sales Growth

In the hunt for sales growth, profit growth, or share growth from the sales force, every sales leader, whether new or seasoned, whether from a growth-stage or a mature-stage company, faces the same question. Where will the growth come from?

The best answers are frequently unearthed by looking at differences in performance, sales activity, and market potential across different pieces of the business — certain customer segments, selected products within a broad portfolio, or specific groups of salespeople. Better analytics, as well as improved data storage and organization technologies, are enabling companies to get more creative in the way they analyze data to discover and take advantage of these hidden pockets of growth.

Here are several examples:

Novartis gets more out of its average performers. Working first with the U.S. sales force, global healthcare company Novartis identified a group of salespeople who were outstanding performers and isolated a set of behaviors that differentiated their performance from that of average performers. The company developed a new sales process that was derived from the behaviors of the outstanding performers, and it aligned sales hiring, development, and other programs to support the new process. A key part of the initiative was a selling skills training program called Performance Frontier — The Next Generation in Sales Excellence. In a controlled study, newly trained previously “average” salespeople realized twice the growth rate in sales when compared to a control group of “average” salespeople who were not trained on the newly identified behaviors. Based on this success, Novartis replicated the approach globally.

A manufacturing company accelerates growth among new hires. A manufacturing company tracked performance of salespeople over their first 20 months with the company to understand how quickly new salespeople became effective and why. A key finding was that the quality of the first-line manager (FLM) had a large impact on new salesperson performance. Salespeople reporting to top-performing FLMs performed much better in their first 20 months on the job compared to salespeople working with average-performing FLMs. Top-performing managers did two things that contributed to the performance difference: they spent more time coaching in the field and they arranged for mentorship from experienced team members. Based on these findings, the company established new coaching expectations for FLMs and implemented a tracking system to ensure accountability.

A medical supply company boosts profits by reallocating sales effort across products. A medical supply company had several products in its portfolio. The amount of sales time devoted to each product varied by salesperson. By analyzing differences in the amount of time that salespeople spent by product and the resulting product sales and profits, the company determined a vastly improved way to allocate sales effort across the portfolio. The company aligned the incentive plan to reflect that effort allocation, and educated the sales force about how to spend sales time in order to optimize performance. The result was a measurable increase in sales and profits without any change in sales force headcount.

A business services outsourcing company improves performance in non-metro geographies. A business services outsourcing company compared performance of its 50 least urban (i.e. non-metro) sales territories to that of its 50 most urban territories. Sales per territory averaged $1.2 million in both groups. Yet when compared to urban territories, the non-metro territories had 79% more prospects and 49% more overall market potential. Salespeople in urban territories visited good prospects on average four times a year; but in non-metro territories, that average was just 2.8 visits. Salespeople in non-metro territories were not realizing opportunities because they were stretched beyond their capacity. The company reduced the size of non-metro territories and assigned coverage of many prospects in outlying areas to an inside sales team. This led to increased market share, reduced travel costs, and improved sales force effectiveness outside of metropolitan areas.

A telecom company gets more business from its low performing, high potential customers. A telecom company took advantage of an emerging way to hunt for opportunities by using a collaborative filtering model, similar in concept to algorithms used by companies such as Netflix and Amazon. The company found “data doubles” for low performing, high-potential customers – i.e. other customers who had a similar demographic profile (for example, the same industry and scale), but who were buying much more. The company analyzed the purchase patterns and sales strategies at these more-successful data double accounts and shared the insights gained with the sales force. The information enabled salespeople to improve targeting of the right products for under-performing customer accounts, thus driving stronger uptake of new product lines and dramatically improving the realization of cross-selling and up-selling opportunities.

Together, these examples provide great lessons about how to find sales growth opportunities. It’s not enough to look at aggregate performance across the sales force; aggregation hides insight. Finding opportunities requires observing and understanding differences within specific customer segments, products, or groups of salespeople, including differences in:

  • Performance outcomes. Novartis observed that salespeople with similar market potential had dissimilar sales results, and realized opportunity by understanding what those salespeople did differently. Similarly, the manufacturing company observed performance differences across new hires and the telecom company observed differences across demographically-similar customers.
  • Sales activity. The medical supply company observed that salespeople allocated time differently across products, and realized opportunity by understanding how these differences affected sales.
  • Sales potential. The business service outsourcing company observed differences in territory sales potential and realized opportunity by understanding the impact on sales activity and results.

Companies will always be thinking about their next source of growth. Today’s world of big data enables companies to creatively slice and dice historical sales force data to find new and better sources of insight.

From PERFORMANCE Management to CONTRIBUTION Management: 3 Keys to Making it Work

Originally posted on Blanchard LeaderChat:

Performance evaluation formHow is performance management going in your organization? If the emphasis is on assessment, it’s likely that employees and managers alike would rather avoid the whole affair. Who wants to judge—or be judged—and face all of the emotional fallout that comes with it?

Instead, I recently have been working with clients to approach performance management as a way to leverage an employee’s contributions toward organization goals.

The subtle but important distinction between performance management and contribution management can turn a once-negative process into a positive “How can I help you succeed?” approach.

For this kind of partnering to work, managers need to have a few prerequisites in place.  Without them, you will continue to find yourself assessing and evaluating performance instead of working in tandem with direct reports to help them succeed. Think you are ready for this more positive approach?  See how you would score yourself in each of…

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HBR: 5 Strategy Questions Every Leader Should Make Time For

Below is a blog post from Harvard Business Review. Are you taking time out of your busy schedule to strategize? It requires substantial periods of careful, undisturbed reflection and consideration. Leadership is not just about doing things, it’s also about thinking. Make time for it!

5 Strategy Questions Every Leader Should Make Time For

Have you ever noticed that when you ask someone in your company, “How are you?” they are more likely to answer “Busy!” than “Very well, thank you”? That is because the norm in most companies is that you are supposed to be very busy – or otherwise at least pretend to be – because otherwise you can’t be all that important. The answers “I am not up to much” and “I have some time on my hands, actually” are not going to do much for your internal status and career.

However, that you are very busy all the time is actually a bit of problem when you are in charge of your company or unit’s strategy, and responsible for organizing it. Because it means that you don’t have much time to think and reflect. And thinking is in fact quite an important activity when it comes to assessing and developing a strategy.

The CEO of a large, global bank once told me: “It is very easy for someone in my position to be very busy all the time. There is always another meeting you really have to attend, and you can fly somewhere else pretty much every other day. However, I feel that that is not what I am paid to do. It is my job to carefully think about our strategy.”

I believe his view is spot-on. And there are other successful business leaders who understand the value of making time to think. Bill Gates, for example, was famous for taking a week off twice a year – spent in a secret waterfront cottage – just to think and reflect deeply about Microsoft and its future without any interruption. Similarly, Warren Buffett has said, “I insist on a lot of time being spent, almost every day, to just sit and think.”

If you can’t find time to think, it probably means that you haven’t organized your firm, unit, or team very well, and you are busy putting out little fires all the time. It also means that you are at risk of leading your company astray.

As famous management professor Henry Mintzberg has described, much of strategy is “emergent.” It is often not the result of a strategic plan just being implemented, but driven by opportunistic responses to unexpected events. Stuff happens. Companies often engage in new activities – customers, markets, products, and business models – serendipitously, in response to external events and lucky breaks. But this also means that business leaders need to make ample time to reflect on the configuration that has emerged. They need to systematically analyze and carefully think it through, and make adjustments where necessary.

Many leaders don’t make that time – at least not enough of it.

If you are in charge of an organization, force yourself to have regular and long stretches of uninterrupted time just to think things through. When you do so – and you should – here are five guiding questions that could help you reflect on the big picture.

  1. What does not fit? Ask yourself, of the various activities and businesses that you have moved into, do they make sense together? Individually, each of them may seem attractive, but can you explain why they would work well together; why the sum is greater than the parts?

As the late Steve Jobs explained to Apple’s employees when he axed a seemingly attractive business line, “Although micro-cosmically it made sense, macro-cosmically it didn’t add up.” If you can’t explain how the sum is greater than the parts, re-assess its components.

  1. What would an outsider do? Firms often suffer from legacy products, projects, or beliefs. Things they do or deliberately have not done. Some of them can be the result of what in Organization Theory we call “escalation of commitment.” We have committed to something, and determinedly fought for it – and perhaps for all the right reasons – but now that things have changed and it no longer makes sense, we may still be inclined to persist. A good question to ask yourself is “what would other, external people do, if they found themselves in charge of this company?”

Intel’s Andy Grove called it “the revolving door” when discussing strategy with then-CEO Gordon Moore; let’s pretend we are outsiders coming new to the job, ask ourselves what they would do, and then do it ourselves. It led Intel to withdraw from the business of memory chips, and focus on microprocessors. This resulted in more than a decade of 30 percent annual growth in revenue and 40 percent increase in net income.

  1. Is my organization consistent with my strategy? In 1990, Al West, the founder and CEO of SEI – the wealth management company that, at the time, was worth $195 million – found himself in a hospital bed for three months after a skiing accident. With not much more to do than stare at the ceiling and reflect on his company’s present and future, he realized that although they had declared innovation to be key in their strategy, the underlying organizational architecture was wholly unsuited for the job. When he went back to work, he slashed bureaucracy, implemented a team structure, and abandoned many company rules. The company started growing rapidly and is now worth about $8 billion.

As a consequence of his involuntary thinking time, West did what all business leaders should do: he asked himself whether the way his company was set up was ideal for its strategic aspirations. What would your organization look like if you could design it from scratch?

  1. Do I understand why we do it this way? When I am getting to know a new firm, for instance because I am writing a case study on them, I make it a habit to not only find out how they do things but also explicitly ask why. Why do you do it this way? You’d be surprised how often I get the answer “that’s how we have always done it” [while shrugging shoulders] and “everybody in our industry does it this way.”

The problem is that if you can’t even explain why your own company does it this way, I am quite unconvinced that it could not be done better. For example, when more than a decade ago I worked with a large British newspaper company, I asked why their papers were so big. Their answer was “all quality newspapers are big; customers would not want it any other way.” A few years later, a rival company – the Independent – halved the size of its newspaper, and saw a surge in circulation. Subsequently, many competitors followed, to similar effect. Yes, customers did want it. Later, I found out that the practice of large newspapers had begun in London, in 1712, because the English government started taxing newspapers by the number of pages they printed — the publishers responded by printing their stories on so-called broadsheets to minimize the number of sheets required.  This tax law was abolished in 1855 but newspapers just continued printing on the impractically large sheets of paper.

Many practices and habits are like that; they once started for perfectly good reasons but then companies just continued doing it that way, even when circumstances changed. Take time to think it through, and ask yourself: Do I really understand why we (still) do it this way? If you can’t answer this question, I am pretty sure it can be done better.

  1. What might be the long-term consequences? The final question to ask yourself, when carefully reflecting on your company’s strategy and organization, is what could possibly be the long-term consequences of your key strategic actions. Often we judge things by their short-term results, since these are most salient, and if they look good, persist in our course of action. However, for many strategic actions, the long-term effects may be different.

Consider a practice adopted by many of the UK’s IVF clinics – of selecting only relatively easy patients to treat, in order to boost short-term success rates (measured in terms of number of births resulting from the treatment). The practice seems to make commercial sense, because it (initially) makes a clinic look good in the industry’s “League Table.” But, as my research with Mihaela Stan from University College London showed, it backfires in the long run because it deprives an organization of valuable learning opportunities which in the long run leads to a lower relative success rate.

When you start a new strategy or practice it is of course impossible to measure such long-term consequences ex-ante, however, you can think them through. For instance, when we asked various medical professionals in these clinics what might be the benefits of treating difficult patients, they could understand and articulate the learning effects very well. They could not measure them, but with some careful thought they could understand the potential long-term consequences before even engaging in the strategic action. Actions often have different effects in the short and long run. Sit down and think them through.

Strategy, by definition, is about making complex decisions under uncertainty, with substantive, long-term consequences. Therefore, it requires substantial periods of careful, undisturbed reflection and consideration. Don’t just accept the situation and business constellation you have arrived at. Leadership is not just about doing things, it is also about thinking. Make time for it.

The 10 Commandments of Communication to Build Trust

Originally posted on Blanchard LeaderChat:

Ten CommandmentsThe way we communicate with others is a primary way we build trust. Along with specific behaviors and actions, communication serves as the vehicle for building trust in relationships. What we say, how we say it, and how we respond to what others communicate can make or break trust. That’s why it’s important to develop your interpersonal communication skills. There are some basic communication do’s and don’ts…the 10 commandments if you will…that everyone should know to facilitate the growth of trust.

Check yourself against this list to see how many of the 10 Commandments of Communication you adhere to:

1. Thou shalt demonstrate genuine care for the other person – People can see right through a phony. If you don’t genuinely care for the other person in the relationship it will show in your words and actions. If it’s important for you to build trust with someone, then you should find…

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Joe, the Slave Who Became an Alamo Legend

I read this fascinating and well researched book Joe, the Slave Who Became an Alamo Legend by Ron J. Jackson and Lee Spencer White. I couldn’t stop talking about it which is rare for me. It was a hard book to put down. Below is an excerpt from the book.

Joe, the Slave Who Became an Alamo LegendJoe, the Slave Who Became an Alamo Legend

In 1838 Joe appears to have wanted to seize control of his life. No longer would he endure the shame and humiliation of another estate sale. He would run, and this escape would be like none he had ever undertaken. He would head for Alabama, the only place he believed he might find sanctuary-with William Travis’s family. If William would have wanted his brother Nicholas to know he had lived well, Joe may have wanted Nicholas to know that William had died well.

Joe planned a daring flight across parts of four slave states to find Nicholas Travis on the Conecuh River and there, he hoped, a safe haven. This would be a journey spurred equally by self-preservation and loyalty. The Travis family deserved the truth about what happened at the Alamo, and Joe likely believed that he deserved a chance for a more peaceful life. The next time he spoke about the Alamo, he wanted to be standing in front of the Travis family. Remaining in Texas would amount to nothing less than a death sentence for him, a lifetime of menial labor on some forgotten patch of ground. If the Alamo experience taught survivors anything, it was that a man or woman must be willing to risk death sometimes in order to live.

As a runaway slave Joe would again encounter hardships. He would have to avoid roads, travel at night, and cross countless creeks and rivers. He would have to live off the land, probably consuming a diet of wild honey, berries, nuts, bird eggs, fish, and plant roots. If he grew desperate, he might need to risk being shot or hanged for stealing food. At least Joe probably felt confident in his planned route. He was already familiar with the road that led eastward to the Mississippi River-the Opelousas Trail or La Bahia Road-which he and Mansfield followed from New Orleans. Joe probably planned to shadow the road and follow it to the Mississippi River, the great waterway he knew intimately from his days in St. Louis.

Once across the Mississippi, by far his greatest geographical barrier, the young slave probably hoped to parallel the river northward as far as Woodville, Mississippi. From there he would again turn eastward until he intersected the Second Creek Road, which cut across the Pine Woods of Mississippi and into the southern reaches of Alabama. The final leg of the journey would take him across the formidable Tombigbee and Alabama Rivers, and then to the farm of Nicholas Travis near Sparta.

The roads, frontier thoroughfares to all, would be easy to find. Joe may have also tapped into the information network of his fellow slaves for safe places to hide. No slaveholder could underestimate this sort of shared knowledge. Slaves commonly shared information about safe houses, trails, and sympathetic individuals,”

Once a slave named Jim made a similar journey from Mississippi to Texas. As the story goes, Jim had been ripped apart from his wife, Winnie, when her master moved to Texas. A heartbroken Jim escaped soon after and walked more than four hundred miles through the wilderness, avoiding public roads and traveling at night. He even swam the Mississippi River. Jim eventually straggled into Texas and managed to find his