To Understand Leadership, Understand Followers

People want to be led and not controlled. Anyone involved in managing people should be a leader. This is what your people are looking for. You can start by communicating the direction for others to follow with an emphasis on delegating and supporting their efforts.  You want people to be motivated and productive, reaching their full potential in the work place. This requires staying out of the way and not being a micro-manager, but still holding people accountable for performance. 

Removing Distractions by Design

Today’s world is full of distractions and noise that can inhibit one’s ability to focus and apply serious attention to the most challenging issues. Take for example the proliferation of social media or how the media relegates important topics to one-minute sound bites. Couple this with the barrage of ads that inundate you from all angles and it’s no wonder that most of us lack the ability to put deep thought into our work and daily lives.

Is This Person Right for Your Company?

It represents one of the most important decisions a company will make – should we hire or not hire this person. Bringing the right person on board goes a long way towards growth and value for any company. So how can you tell if you have the right person? You can start by comparing the person against your culture since this represents an immediate show-stopper. If the person doesn’t fit your culture, then the person is most likely not a good fit for the long-run.

People Need Coaching - Part 2 of 2

Part 1 of this article laid the groundwork for transforming managers into coaches. Part 2 of this article will focus on what every manager can do to become a great coach. Much of this transformation from manager to coach is rooted in the relationships a Manager has with co-workers. In their book Stop Managing, Start Coaching, authors Jerry W. Gilley and Nathaniel W. Boughton describe nine key components behind a manager-employee relationship:

People Need Coaching - Part 1 of 2

There are plenty of programs to help build and develop human resource capital within the organization; things like personal balanced scorecards, emotional intelligence, and the 360 Degree Evaluation. However, trying to implement these solutions is not easy. Additionally, many of these initiatives involve considerable effort with somewhat mixed results. What we need are very informal, straightforward approaches to managing people for higher levels of performance. The answer may reside in coaching. Coaching has been very evident in sports – we've all seen how great coaches can turn a team of players into champions. And now coaching has emerged as a rapid, easy and sure-fire way for managing people.

Why Customer Retention is so Important to Growth

For many businesses, the challenge of growth has become exceedingly difficult. Larger companies seem to grow through acquisition since internal growth above 10% is not possible. One of the keys to good internal growth is through retention. Granted, it’s not easy, but if you can somehow retain your customers and get them to come back, you have created a platform for growth that is much easier to manage then a growth strategy predicated on acquiring other companies. Acquiring and integrating other companies is very challenging and requires expertise that most companies lack, not to mention the very low success rate even if you do have outside help. Therefore, a growth strategy rooted in retention can be more viable and sustainable over the long run.  

The Three Most Important Skills

It was said some 20 years ago by the Education President, George H. W. Bush that everyone should be able to: Speak, Write and Think. These are the three most important skills everyone should have. Why are these skills so important? Because they are the most transferable skills a person will use throughout their life. These skills also create the widest range of opportunities for people in a world where specific job related skills can become obsolete. And if you don’t think you need transferable skills, then consider that the average American will go through 10 to 14 jobs by the age of 38. One out of every four workers has been on the job one year or less according to the Department of Labor.    

Why Link Pay to Performance

If you expect to attract and retain the best people, you must have market competitive pay. Additionally, you have to be willing to accept some level of employee turnover. The key is to design your pay so that you have targeted turnover; i.e. you induce turnover of low performing personnel while re-enforcing a culture of high performance, enabling you to retain top performers. This is why every company should consider linking pay to performance.

The problem for many companies is the minimal spread between high and low performers. Most companies design their pay around a merit matrix that looks like this:

Performance Level	Highest	Above	Below	Lowest
Exceptional	3.5%	3.5%	3.0%	3.0%
Exceeds Expectations	3.0%	3.0%	3.0%	3.0%
Effective	2.5%	2.5%	2.5%	2.0%
Development Needed	2.5%	2.5%	2.0%	2.0%
Unacceptable/Poor	2.5%	2.0%	2.0%	2.0%

In the above example, the spread between the best and worst performers is a mere 1.5%. In today’s world where companies are fighting to attract and retain top talent, you must be much more aggressive with your merit matrix so that it looks more like this:

Performance Level	Highest	Above	Below	Lowest
Exceptional	6.5%	5.5%	5.0%	4.0%
Exceeds Expectations	6.0%	5.0%	4.0%	3.0%
Effective	5.0%	4.0%	3.0%	2.0%
Development Needed	2.0%	1.0%	0.0%	0.0%
Unacceptable/Poor	0.0%	0.0%	0.0%	0.0%

In this example, people who don’t perform get no increase. This sends a strong signal to everyone that performance matters and for those who do perform, you will get a serious merit increase. This is one of the most powerful statements any company can make when it comes to retaining the best people. You should also think about the limited money you have to spread around. You want to allocate your limited resources to those people who deliver results. A merit matrix that has distinct differences between low and high performance will do more to communicate and create a culture of high performance than any speech or memo you will issue. 

“Variable pay budgets and spending have nearly doubled in the last 20 years, subsequently emerging as the pay-for-performance vehicle of choice now and for the foreseeable future. In a more robust job market, competition for talent exists in every sector. As a result, we are seeing industries that have traditionally shied away from providing bonuses, such as agriculture, higher-education and the federal government, realizing they must establish variable pay programs to compete for and retain the best talent.” - Ken Abosch, Compensation Leader for Aon Hewitt.

Trying to retain the best people is becoming increasingly difficult. According to a 2015 survey conducted by WorldatWork, over 80% of the people surveyed indicated they plan to leave their job. Contrast this to five years ago when the percentage was 60%. High performers are not going to stick around for the usual 3% raise while others get 1%. 

A final point concerns the traditional performance review. If you link pay to performance, you need to rely more on 360 degree feedback that has some anonymity. This provides an objective, open and honest review process that serves as your basis for administering your merit matrix. Additionally, your review process has to be on-going and not just once a year. It should be a cumulative reflection on how well someone has helped the company meet department and company goals. And the review process should be both quantitative and qualitative. For example, the Marketing Manager was able to help the company meet its sales targets (quantitative), but he also mentored and grew the capability of our marketing team (qualitative). If you can have a robust back-end review process coupled with a serious merit matrix (as described in this article) and combine this with a competitive benefits package, then you have established the foundation that should enable a high performing workforce.

"It is very difficult, but not impossible, to put a price tag on losing key people and their smarts. As if to emphasize the intangible yet dire nature of these costs, some executives were unable to provide a dollar figure, but simply responded 'incalculable' or 'priceless.' So even if you can't quantify the costs of knowledge loss, you might agree that the cost is often a lot, enough that you would like some options to avoid or minimize these costs. Despite the acknowledged threat, a surprising number of organizations are doing nothing or little about it." - Critical Knowledge Tools by Dorothy Leonard, Walter Swap and Gavin Barton

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Is Knowledge Really Power?

We all recognize (at least I hope most of us) that knowledge is instrumental to value-creation and that knowledge as an asset is far more important than traditional assets such as equipment, real estate or buildings. And to a great extent, every organization must become a knowledge organization and every employee must become a knowledge professional.

Three Frameworks for Higher Productivity

Increasingly we live in a world where we have to get a lot done and since no-one can change time, the key is to get more out of the time we have available. The good news is that several frameworks can rapidly increase your productivity. This article will discuss three: 1) Eisenhower Box, 2) Lewin’s Equation, and 3) the Zeigarnik Effect.   

Certain people seem to get a lot done in an effortless way. One such person was Dwight Eisenhower, 34th President of the United States, serving two terms from 1953 to 1961. Eisenhower followed a simple principle based on what he once said:  “What is important is seldom urgent and what is urgent is seldom important.”

Measuring Human Resource Capital

One of the most under measured parts of a business is the human resource capital and it represents one of the biggest challenges facing business; namely finding the best and brightest people. It is these human resources or people who ultimately create value for the organization. People generate value through their application of skills, talents, and abilities. The key is to invest in people so that human resources are productive, knowledgeable, effective, and efficient. This is what separates the average company from the exceptional. Getting a return on this investment or ROI is extremely important.

Want a Superior Workforce? Hire Women

It goes without saying that people make the difference in great companies. Author Jim Collins brought this point home in his book: Good to Great. One reason this can be challenging is that people are different and they may not work well with others. So how do you reduce the selection process and find people who can add the highest value across the entire workforce? Well you may have to be somewhat bias in favor of women.

The ABC's of Competency Models

As you drill down the drivers of performance for most organizations; things like great customer service, efficient processes, and empowering technology, you reach a base level for making these drivers happen. This gets you back to the qualities of your human resources – knowledge, expertise, experience, and those things needed for successful execution. And the combination of skills, expertise, knowledge and other intangibles will vary from job to job, function to function. For example, what we need for executing for securing new customers is not necessarily the same as what we need for efficient processes.

Science Explains Creativity

With so much emphasis on creativity and innovation, it helps if we can all cut directly to the chase – namely what's behind creativity? Thanks to various scientific studies and author Jonah Lehrer, we have great insights into where creativity comes from. In his book, Imagine: How Creativity Works , Lehrer highlights some very important research that explains creativity.

For starters, creativity is not one train of thought. It is about how people can switch their thinking from one mode to another. For example, we all get stuck on some problem, struggling to break through and reach a solution. What creative people do is they switch gears from say analytical thinking to day dreaming and imagination. Knowing when and how to make these switches is critical to creative problem solving.

Elevating the HR Function - Part 2 of 2

Part I of this article addressed the issue of elevating the HR Function into a more strategic type function, as opposed to an administrative type function. Part 2 of this article will describe several strategic ideas for moving HR into the strategic function it must become.

In Part I, we mentioned the importance of HR as it relates to core competencies. Organization's need to maintain and build their core competencies since this is the source of competitive advantages in the marketplace. Core competencies have a lot to do with recruiting and retaining the best people. Obviously, HR should play a lead role in this mandate. However, we do not want to stop here since there are numerous other strategic issues related to HR.

Elevating the HR Function - Part 1 of 2

Organizational capabilities are developed primarily through the development of human resources. Despite the enormous importance of human resources, many organizations treat the HR (Human Resource) Function as just another administrative function with high overhead costs. As a result, the HR Function is often targeted for outsourcing and downsizing; crippling it from its real potential for value-creation within the organization.

Value through Motivation

Motivation is Critically Important to Business Success

So much of what drives value and greatness in any organization resides in how the people are managed. Jim Collins, author of Good to Great , has repeatedly emphasized the importance of attracting and retaining the best people. However, a big part of this has to do with motivating your people. When you focus on this single element of value, namely motivation, you can really unleash so much value and performance within any type of organization.

Humanizing the Financial Mindset

Why finance should take a more human view

Financial Statements, Organizational Charts, Employee Handbooks, and all those traditional things that go into running the business are increasingly unreliable, out-of-date, and ineffective in a world driven by human and intellectual capital. If leaders of organizations are honest about high performance and creating value, then they must pay close attention to the human side of running the business.

The 360 Degree Performance Evaluation

360 Feedback is Critical for Objective Evaluations

Managing human resource capital is now mission critical. One of the most effective tools for managing human resources is the 360-degree evaluation process. Traditionally, an employee is evaluated from a sole source (1 degree), namely the immediate supervisor or manager. However, employees interact with numerous sources: Co-workers, customers, Managers outside the employees department, vendors, contractors, and others. The 360- degree evaluation process relies on these multiple sources, providing a more balanced and objective approach to measuring employee performance. This leads to higher productivity, better customer service, and enhanced organizational performance.

Why Games Belong in the Workplace

Games elevate productivity and innovation

Suppose the world had a workforce that was highly skilled at solving some of the most challenging problems. This workforce is motivated, hard working and highly collaborative with others. And to make matters even better, this workforce is not driven by traditional rewards such as money, but more by the thrill of accomplishing something great. Such a workforce exists and it is estimated to be 500 million strong and growing rapidly. It's the workforce of gamers. People who play games are perhaps the most untapped resource on the planet.