Thursday, October 9, 2008

Should A Manager be Loved or Feared?

From my point of view Neither is required. Being loved or feared has no bearing on the success of an organization and the effectiveness of a manager.
It would be much better if the team members LOVED the system(s) they work under and FEARED failing to execute under a proven system that they had an opportunity to create or improve.

The best compliment a manager can expect is that they are organized and fair. That means that the manager made it very easy for each individual in their team to focus on and be successful at what they are delivering. They achieve this by effectively communicating standards and values and by providing the resources and training required by each person to succeed.

The best managers know how to make work fun. These managers have dynamic systems that can deliver the corporate objectives efficiently and effectively, systems that are open to improvement by the people who deliver them. The system is so efficient and effective that new team members would not need to have previous experience and/or existing team members wouldn't need to be flexible, multi-tasking workaholics to succeed.
After all there is little time or room for fun if when staff are frequently asked to shift priorities followed by intermittent calls of "Fire" that require them to work late.

Good managers defend their employees actions as they understand that they are responsible for and accountable to their employees actions. Employee failures are failures in systems that require improvement.

Good managers are on a path of discovery. They practice with organizational models and methodologies.

Are you a practicing manager?

Thursday, July 17, 2008

Ideas! And How To Deal With Them In Your Business

Ideas. Meetings are scheduled around them, water cooler discussions are dedicated to them, and in the end very little, if anything, is accomplished.

So why do we keep entertaining ideas?

It's because there are great benefits to new ideas, whether they are strategic or tactical, as they can open new avenues of revenue and/or efficiencies within an organization and drive innovation. Innovation is the cultivation of new ideas specifically those that come directly from or benefit the end user or customer.

So what's going wrong?

There are 2 rules when it comes to ideas.

1. Ideas are a drag on productivity! And
2. An idea has no value unless someone is willing to buy! See Rule #1

Unless someone is willing to foot the bill or commit the time to implement an idea, the idea will only succeed in fulfilling rule number 1. Time and resources (financial and human) need to be assigned to turn ideas into reality and the whole delivery process needs to be contemplated from design through to support and the risks weighed.
Oftentimes ideas are launched or implemented without the aforementioned process or resources and the idea dies an untimely death and the company never realizes the value of the idea or gains any market insight or intelligence. The idea may have been valid but their was no organization or resources applied to really validate it. Activities are typically thrust upon workers who already have their plates full, creating conflicting priorities and little time to figure out how to best implement the new idea. You can just hear the balls dropping. If the organization has no formal way of integrating ideas into their daily operations ideas just end up being ignored or a drag on productivity.

So how do we use ideas appropriately to avoid rule number one?

Know your audience. If a buyer is not at the table when you pitch your idea then rule number one is fulfilled. Pitch your idea to someone who is in a position to act on it. They will either get excited enough to buy the idea or not. And if not, move on.
Also, it's important to avoid getting married to any particular idea (product or service). Let your customer(s) define your idea. Many times we can be so focused on the idea we're trying to pitch that we don't hear what the buyer really wants.

The best way to deal with ideas is to create a formal system within the organization to deal with them. Systems of change/improvement like a suggestion box creates a process for which ideas can be passed along to the people responsible to be reviewed at a scheduled time. This is really important. Having a system for change within a department or across an organization presents a formal avenue for ideas and is a way to capture future opportunities, system improvement and innovation. Also, if you include interested staff when reviewing ideas you will teach them how your thought process works on validating and/or prioritizing ideas. It also gives you the opportunity to ask the person with the idea to make their case for the idea including resources required, return on investment, benefit to customers internally and externally and how the idea conforms to corporate strategy, values and standards. This process will slow down and even stop the frivolous ideas that could put a damper on your productivity and precipitate longer meetings. Eventually anyone with an idea would create a formal case for that idea and really take ownership of it (think it through) before they usurp someones time with it.

What's your next meeting about?

Tuesday, July 8, 2008

How to Contain the Complainers!

There always seems to be a few complainers in every group. People who are just negative or who regularly complain about their work and their bosses to coworkers.

In response to this issue I would suggest that there are any number of possible causes. It could be that the person has succumbed to some external force that you have no control over, OR there are those that complain about work that they feel they have no control over, AND then there is nothing worse than the complainers who complain about something they have complete control over. I find this latter type the most infuriating as they are always looking to blame someone else for their own failures.

So what can we do about it?
Now let's break down the areas that enable the complainers. The first is Motivation which falls under the domain of leadership and the second is Organization which falls under the domain of management.

Let's start with Organization.
One of the first tools I learned in the battle against negative Nelly's or complainers is to make them the managers. I know, this seems counter-intuitive and when I heard it for the first time many, many years ago I was shocked. My initial reaction at that time would have been to weed those people out of the organization.

I first heard of this technique from a plant manager who was running a unionized automotive parts manufacturing facility. He couldn't fire unionized staff so he did the next best thing, he promoted them to non-unionized positions - supervisor or manager. The complainers either raised themselves up and took on the challenge of correcting their own complaints or if they were complaining for the sake of complaining they quickly exited or were fired for failure to deliver. Problem solved.
This seems like a great technique until you analyze the process. What is really happening here is that the manager does not have a system to deal with problems in the team so the manager abdicates his/her responsibility by passing it on to someone else. This may work short term with a single individual but couldn't possibly deal with all of the complainers, just the most vocal ones. This will really just ensure a cycle of problems for the manager to deal with. At some point you may end up with too many managers and no one to do the work.

Another tool is the old stand-by of fear and intimidation. This typically raises the level of complaints but drives them underground for fear of the manager hearing them. This management technique creates a management bubble which ensures that any feedback, either positive or negative, will not reach the ears of management. Again, it doesn't address the problem and tends to be demotivating, increasing turnover and quashing innovation; all of which are a drag on productivity and efficiency.

A tool that I've applied to great effect is to move the complainer into a client facing role. After a few days of listening to client complaints, especially complaints that are the result of that person's own work, the person will finally start to think about the effects of their work and start to focus on what's really important and stop complaining about things that are not.

The best solution would be to institute a change management system (the complaint department) and put the complainers in charge. What you achieve by doing this is to effectively turn the complaints into solutions and the complainers into solution providers. You also force the complainers to think their complaints through to a solution and then delivery. They either come up with a solution and participate in it's delivery or they come to the conclusion that it wasn't worthwhile and stop complaining.
A change management system is where all of the complaints, internally or from customers, are entered and reviewed monthly by the domain manager individually or in a meeting with the team.
This will give you a formal process with which to help you build better systems and refocus everyone on improving systems instead of blaming or complaining about people.
A wonderful side effect of this process is that this process will teach the participants the decision process of the domain manager effectively delegating it.

Of course, in order to keep people thinking about solutions you have to act upon them. If you don't your staff will return to complaining.

Now we come to Motivation or Leadership.
Great leaders have a bold and compelling vision. A vision that energizes and motivates everyone to achieve an objective. A vision that turns people from ordinary to extraordinary.
The message and actions of the leader will convey a set of objectives, values and standards that will emerge as the corporate culture. If there is a lack of leadership then there is no unifying purpose. If everyone is exercising their own vision for their own purpose you will essentially have anarchy. It's hard to stay focused if you are questioning the purpose of your role in an organization or worse the purpose of the company. This lack of purpose is a breeding ground for complaints and complacency. It's hard to get engaged when your future is uncertain or unknown.

Actually complaints are signals or signs that you are not communicating coherently and without complainers you would never know.

Great leaders don't assume that they know all the answers or what the future will hold. They don't want to miss out on the next big thing and their culture tolerates, and even rewards, complaints. Keith R. McFarland writes in his book, "The Breakthrough Company", that one of the characteristics of the $250M rapid growth companies he examined is that the leadership was very tolerant of dissenters and even let people pursue ideas for new business even when they thought they were wrong. Sony is another great innovator who has been known to finance an employee with a new product idea so as not to loose them or miss out on a new opportunity.

The real lesson learned here is that the people who are doing the complaining are typically the ones who actually care about your business. They are the vocal ones, the people who are more than likely to participate in and take on organizational responsibilities. In other words, affect change. Without these people things wouldn't change and change is required if any organization is going to adapt and be successful. "If you don't complain things will never change".

The same kind of system that initiates organizational changes can be applied to corporate leadership changes as well. It's a great way to get people to start thinking beyond their individual role and start to think about how what they do effects the whole organization and the success or failure of the organization. People are less likely to complain if they understand their purpose and feel like they are contributing beyond their cubicle. Setting corporate objectives, values and standards should be something that everyone who wants to participate in be given an opportunity to do so. This could be an "open door" policy to something more formal where there are cross functional teams who engage in strategic planning at regularly scheduled intervals. Knowing the big picture and what's coming next is very empowering and can be very effective in quelling the complaints.

If you don't embrace change it will be at your organization's peril. If you do not have a system for change then your organization will be locked into practices that don't work for, and don't include, everyone which leads to complaints, high turnover and limits growth potential and productivity.
Don't turn off your complainers, nurture them by listening and teaching or mentoring.

Why do your staff complain?

Saturday, February 16, 2008

Mission and Vision and Mantra, Oh My!

There is some buzz in the business community about having a Mantra. Those of us who have lived through Missions and Visions, I trust, don't see a Mantra as being any different so I'll cut right to the chase. Mission, Vision and Mantra statements fail because people forget that these statements are starting points and not the end. Some will spend endless hours and engage endless consultants to finally come up with the right Mantra and when finally done, breathe a collective sigh of relief and then, move on. Does a Mantra alone really have any value internally with employees and externally with clients? I think we all know the answer to that one.

In order for one of these statements to be of any true value, you would have to put the statement into practice. And by practice I mean practice as in 'practice makes perfect'. Perception is the key here. Your Mantra would have to be tied to a set of values and standards that every decision and action is accountable to from the board room to the front office.

One of the things that I try to impress upon my clients over and again is that "an idea without a buyer is of little value". So if you actually believe that someone would be willing to join your organization or buy from you based on a Mantra then I suggest you start testing different Mantras on your potential clients and potential employees and see which one works best. Once you have found the perfect Mantra that engages clients and employees you would need to change the entire organization to successfully live up to that Mantra. The other option is to create a Mantra from the values and standards that endear and engage your organization to your existing clients and employees. Hopefully your organization will have some of those qualities and you can encapsulate them into a 3 to 4 word statement. You may discover that the most appropriate Mantra based on existing values and standards is 'We are Evil' but don't fret as you won't have to change anything to live up to it. And just think, with a Mantra like that you could be opening up a whole new untapped market segment.

For those of you who believe that a Mantra is 'old school', I have just coined the next corporate image term and it is "Chant". It is based on the premise that if you say something enough times , something being a 3-4 word statement, people will start to believe it. This ensures the desired effect and doesn't require any organizational change other than making it mandatory to memorize and recite the statement at every opportunity.

Monday, January 21, 2008

What The Job Requirements REALLY Mean

It's amazing that in this day and age hiring managers and HR staff still use generic terms when advertising their internal positions. Some of the terms used are really just fluff, and purely subjective, meaning that if you asked 10 people what they meant you would undoubtedly receive 10 different answers.
If you really think about it you'd have to wonder why anyone would want to work for a company that required their employees to be self-motivated, flexible, creative and able to multi-task in a fast passed and dynamic environment. The picture that is painted in my mind is that you'll be air lifted onto an ocean tanker with a belly full of oil in the middle of the North Atlantic just after it ran into an iceberg and you are responsible for saving the oil as well as your corporate bosses from legal/environmental liability. As you watch the helicopter that dropped you melt into the horizon the first mate reports that most power systems and all external communication systems are lost. I guess if you are the kind of person who likes to be in a continual state of emergency without any lifelines this seemingly would be the perfect position.
In stark contrast, the following description would be far more enticing. "We provide a work environment that offers you the time, training, freedom and flexibility to create something extraordinary for our clients, coworkers and most importantly, yourself."
A job posting is an advertisement for the company and should be written with at least as much care and attention as any other client facing document. The posting should engage anyone who reads it so they would feel motivated to respond and, if not selected, would feel obligated to tell others how great your company is. Of course, in order to really pull this off and have prospective employees clamoring at your door you would have to use the standard defined in the latter job description and create that environment.

What message do these common job posting terms really convey to prospective employees?

Multi Task - We aren't able to do any one thing well (Sure! I can drive while reading, shaving, eating and calling you as long as auto insurance is not a requirement)
Flexible - Your time is our time. We need you to be able to drop what you are doing and do something different most of the time.
Self-motivated - Motivate yourself! We don't like what we are doing either!
Creative - We haven't yet developed systems, processes and resources for this position - you're on your own.
Passionate - We can't seem to convince anyone to believe in what WE do
Fast paced - We are running in many different directions all at the same time
Dynamic environment - No sooner than the team starts to gel and deliver results we'll mix things up again.

What do these job description terms mean to you? Or feel free to add your own.

Wednesday, October 17, 2007

How Do You Define Good Business Partners

Finding good business partners is critical to the success of growing businesses. Businesses, especially small businesses, can live or die based on the success of their partnerships.
Partnerships can help you take advantage of or create opportunities. Partners can typically share resources and knowledge and achieve objectives sooner than they could have otherwise on their own. A new partnership increases the size and scope of a business which can open up opportunities that the business was previously not open to participate in.
Although there are many advantages to partnerships we all need to be wary and choose partners carefully as you will be judged by the company you keep.

So how do we define a good partner?

Whether looking for a direct partnership with someone who will own shares in a business, or an indirect partnership with an independent product or service provider, partners can be found for any aspect of a business. These days it's possible to outsource all business functions to partners. Partnerships can be formed on loose verbal arrangements or formal agreements with penalties for failures.

My first career job, many (many) years ago, was actually my own business. In the first year of operations my partner and I decided to base our business on a single vendor's product. The product was innovative and promised ease of use for our customers and ease of support for us. We were fortunate not to sell a lot of those products in our first year as we spent our second year of business replacing that vendors product with another product at our own expense. This was the manufacturer's (Our partner) first offering using new technology that they obviously did not fully understand. This was a hard lesson to learn and it nearly killed our young business. We had other failures but they were on a much smaller scale as I adopted a policy of assessing and testing new products internally and with a few customers before I approved those products for sale. Over the years I researched and tested many products from the least expensive to the most expensive and tracked and assessed the long term support costs. If I attached the long term support cost to the initial product or service price it wasn't always the cheapest product or service that was the most profitable.
The right product or service could be the difference in your maintenance and support being an expense rather than revenue on your balance sheet. For example license or maintenance agreements are only profitable if fixes and maintenance aren't required. This is where many new and small businesses can get into a lot of trouble. After all, it's the after sale costs that will provide a clear understanding of real costs and only then can a pricing model be developed that guarantees profitability. If the product or service is sold too cheaply it will effect cash flow and the businesses viability going forward. And if there is a lot of unexpected after sale support then your customers aren't likely to recommend you to others. Therefore product/service cost is not a factor of reliability or profitability.

So based on my experience a great set of partnership rules would be:

  1. Consider more than one potential partner (investor/vendor/manufacturer/distributor)
  2. Research the partner's capabilities directly and by calling at least 3 references
  3. Quantify those capabilities by testing (pilot projects/beta testing)
  4. Calculate the real costs over time of using this partner
  5. Assess the partner's value not only monetarily but through customer feedback
  6. Keep you eyes out for better partners
  7. High cost does not always mean high quality. Low cost does not always mean value.
These rules only really scratch the surface though because if you aren't just piggy backing on your partner's product, service and brand then what are the differentiating factors in choosing the right partner(s) to do business with.
About 5 years into my first business we decided to partner with a company in a vertical industry. We felt that this would be a good strategic partnership because we could cross sell each others products and drive new business without hiring more sales staff. In a further effort to save costs we also decided to move into, and share, new office space with this company. It wasn't long before cracks started appearing in this relationship. We created a compensation model for this external partner to resell our products and services. The compensation model included a fee structure for them to refer a client to us as well as a commission structure if they sold the product or service directly acting as our agent. Because the direct sales commission model was more lucrative they opted to do this every time. This satisfied us as it would be less sales calls for us and more sales.
Unfortunately their sales staff would and did say anything to the customer to close a sale. A customer to them was someone to extract money from in any way possible. Particularly disturbing was how they preyed on those aged over 65. They had no concern for referrals or repeat business and it was our high rate of referrals that had precipitated our growth up until that point. When we showed up to deliver our product or service we would invariably have to talk the customer down and do a complete redesign on-site. There were also situations where we had to just walk away from the project because what they sold could not be delivered to the customers satisfaction. This always cost us hours or days of productivity and future referral business from these clients. In comparison we did not try to sell their products or services outright because we just weren't knowledgeable enough about them. Initially we referred our customers to them but after learning that our values were not shared we started referring our customers to one of their competitors who did share our values.

This brings us to the meat of great partnerships. Just like personal relationships, successful business relationships are based on what the partners share in common. They may share common goals, values, objectives, visions, standards, interests and the more of these things they share the stronger the bond.
My first business was a 2 person partnership that was very successful in that we seemed to compliment each other as our areas of interest were in different areas of the business. My partner took on the hats of sales and finance and I took on the rest of the operational roles. Having more than one internal partner take on the same role or accountability is one of the top reasons for acrimony and failure of businesses that are formed by partnership. One person is not going to execute as well in the same role and at the end of the day it's almost impossible to determine WHO is really accountable or responsible for failure or success.
Our values and standards were different but we were open about and understood the differences and we shared a common goal. We both wanted to create something on our own terms and do it better than everyone else. The two of us together created a dynamic that was much larger than each of the individuals. We brought different perspectives to every issue which was a natural antidote to group think. I pushed for rapid expansion and my partner pushed for limited risk.

Vision is very important because you need to know how your partner envisions their business going forward. The partner may want to maintain the same size and scope or may envision something much bigger for the future. An important part of their vision will be their exit strategy. Will they still be around in five years or will they exit when a financial or personal milestone is met. You need to know if your relationship is just a stop gap or something that is strategic to their organization long term. They could be considering a shift to a new business model, a move to a another partner, a different product or service or they may even be planning on doing what you do themselves.
Vision is one of the most critical aspects of a partnership and it is a discussion that you should have with your partners at least annually so that you are not surprised by, and can prepare for, change. If your partner doesn't know where you are going then they won't be able to help you get there. The end to my first business came when our vision for the business diverged.

Once the vision thing is out of the way you can get to the heart of your relationship which will be the Objectives.
The objectives, or goals, of each partner will be what is used to create the basis for the relationship for it is the shared interests that will determine the near term success of the partnership. Knowing what each partner wants will not only help align and justify the partnership but will also help facilitate efficient communication. If your partner doesn't know what you want they won't be able to help you achieve it. Without understanding objectives or aligning objectives it will be difficult to really quantify the success of the partnership. If your partner does not deliver on time or does not deliver new business or makes you unproductive they would not likely be meeting your objectives and the partnership would be a failure. The objective(s) should be used to determine the value of the relationship and the most important thing to remember when setting objectives is to make sure the objectives are quantifiable. This means that there should be numbers attached to the objective(s) so that you can keep score. For example you may have partners that resell your product or service and you may decide to sign up as many of these types of partners as you can. This is a great way to build a sales force but what is the real cost to support all of these resellers and are all of the partnerships returning enough new business to meet your objectives. Setting objectives like the number and value of sales will help you quantify your partnership(s). An example would be to pay commission on a sliding scale rising with the number of sales or with the total amount of sales over a specific period of time. Also don't forget that when rating your partners always, always, always include the customer experience or customer feedback in your rating.
When setting financial and functional objectives make sure that your partner is investing human and financial resources to ensure the success of your partnership. If you are purchasing product or services you will need to know that your partner is making a special effort to address your current needs and is preparing for changes in the market so future offerings will be as compelling as current offerings. A lot of time signing on a partner is the beginning and the end of the relationship because neither or one of the partners is not upheld to a set of functional and financial objectives.

And finally we come to the one area that will create most of the conflicts and place most of the stress on any kind of partnership, Values and Standards.
It seems obvious that shared values and standards would be the cornerstone of any partnership but it is the area most ignored by people entertaining and entering into partnerships. I think that most of the time we are so blinded by the short term opportunity that we forget about the risks. Probably the biggest risk is not getting paid or paying for something that isn't delivered but it could be even worse if the product or service is of poor quality and places you at the wrong end of a multi-million dollar lawsuit. You will want your partner to be open and honest and uphold the highest standard or a least agree to uphold your values and standards prior to you entering into a partnership agreement.

Look for clues in how the potential partner speaks. If the potential partner only talks about sales and profit you should expect that money is their prime motivation. If money is the sole motivation then customers are only a means to an end and that primary motivation will also be the basis of your relationship with that partner. In this type of partnership one of the partners may eventually be looking to cut the other out to ensure more money for themselves. Another speech pattern to be wary of is talk of working around regulations or agreements as if the source of all of problems were external forces weighing in against them. Well, guess what, you may just become another external force to this partner and it won't be long before they are complaining about you, demonizing you, and then justifying working around you. Another form of speech pattern to be wary of is the "no money" mantra. These people will continually respond that they don't have the money even as they shake your hand at the end of a meeting and step into their brand new $50+ thousand dollar vehicle. Your partners should be investing their time and their money to ensure the success of the partnership.
Weave behavioral types of questions (How do you, When do you, Why do you) into your initial conversations with potential new partners. Find out how they create, deliver and support their product or service and how they overcome failures or reward successes each step of the way. Discover what their primary focus or motivation is whether themselves, customers, employees the community and what mix of any or all. It's easier to communicate with people and organizations that behave in a similar fashion as you or your organization. Knowing they will respond to success and crises the same way you or your organization does is very reassuring especially when your customer relationship is at stake.

Which brings us to the final act. Get it in writing. The purpose of the written agreement is not so you can sue your partner over perceived failures but to document the terms and quantifiable objectives. You may have conversations with your partner over time and you don't want to rely on verbal communication when it comes to responsibilities and accountability.
It's also a good idea to create a Service Level Agreement. SLA's commonly include segments to address definition of services, performance measurement, problem management, customer duties, warranties, disaster recovery and termination. It's important to note that agreements can be simple letters of intent. If you plan on taking your partners to court for failures then you should consult a lawyer. Most people will just find a new partner if the current one is failing so creating a detailed legal agreement is not necessary and legal agreements can be expensive to create and time consuming to administer.

These rules should also be added to the list:
  1. Discuss Vision - how big, where and for how long
  2. Define Objectives - What will be achieved financially and operationally short and long term
  3. Define Values & Standards - How we treat customers, employees, the community
  4. Ensure partners invest human and financial resources to ensure success
  5. Define and divide up roles and assign accountability
  6. Formalize your agreement in writing
Partnerships are a great way to stimulate growth and improve efficiencies. Great partnerships create a dynamic that is far greater than all the individuals involved.

Dave Soteros is President of Alrym Consulting. He believes that great companies have great partnerships and return value to not only customers but to the greater community.

Tuesday, October 9, 2007

The Art of the Start

If you are still in start-up mode or a young company or even just considering starting your own business then I recommend you view this video featuring venture capitalist Guy Kawasaki here.