Leading With A Culture Forward Perspective

Posted on 12. Aug, 2016 by in Gary's Blog

There is a surge of C-Suite interest in understanding the secret of successful cultures in what we’re calling “Culture Forward” companies as varied as Apple, Facebook, Google, Southwest Airlines and Warby Parker. How do they do it? Are they just lucky enough to hire only highly talent people with a great work ethic? Or is something else driving their success?

In our experience, executives in companies with a positive work culture have a distinct and different leadership line of sight.

In most organizations, leaders focus primarily on strategy, technical expertise, products, marketing and shareholder value. Senior leaders in Culture Forward companies start with employee engagement, building trust, and actively supporting innovation and smart risk-taking. They see that execution on these key dynamics enhances performance, financial results and shareholder value.

The data bears this out

According to a recent Hay Group study, companies with cultures that build an engaged workforce have revenues 2.5x higher than companies with low engagement. Similarly, Gallup’s 2015 Annual Employee Engagement Study found that organizations with highly engaged employees have 147% higher earnings per share than their competitors. Gallup also found that engaged employees are 87% less likely to leave their company than non-engaged employees.

So that’s the good news about the power of an engaging culture. The bad news is that currently 70% of workers in the Gallup study reported they were either not engaged or actively disengaged.

If the engaged culture evidence is so overwhelming positive, why aren’t more companies working to create this positive environment?

What Goes Wrong

The breakdown comes back to leadership line of sight. Most senior executive rise to their positions based on their technical expertise — not their ability or experience in creating engaging work cultures. People are most comfortable with what they know they do well — not with what feels uncomfortable.

Shifting one’s leadership line of sight takes courage. There’s no foolproof recipe or model for success in this area. Leaders need to be willing to take the risk of playing outside their comfort zone in this critically important aspect of their work.

For things to change, it must be safe for executives to make mistakes and experiment with new ways of leading. The best way to accomplish this is to create a situation where the entire C-Suite takes the leap to shift the leadership line of sight together.

Easier said then done?  Yes, because success requires sustained effort and commitment.

However, status quo in a fast changing business environment leaves a lot of opportunity and talent on the table. In a future post we will talk about the “how to’s” of translating the theory of a Culture Forward perspective into action.

Authors — Joe Collins, former Group Head of HR for Fidelity Investments and Gary Schuman, President of CDL Consulting work with organizations on practical approaches to Culture Change and Senior Executive Leadership

Transformational Leadership – Post #3

Posted on 25. Jan, 2016 by in Gary's Blog

Most organizations are feeling a great deal of pressure to crack the code on how to create a positive work culture to navigate these turbulent digital age times. Here are some interesting factoids that provides context to this situation:

• The influence of Digital is everywhere; it’s not going away. Even the Pope is tweeting!
• In a Work Culture Survey by the Katzenbach Center, they reported that 84% of respondents believe that culture is critical for business success; 60% think it’s more important than strategy; but only 35% think their company’s culture is effective.
• Hay Group determined that companies in the top quartile of employee engagement generated revenue growth that was 2.5x higher than companies in the bottom quartile. In the same study 90% of senior leaders said that an employee engagement strategy was key to business success, yet fewer than 25% had an active engagement strategy.
• A Harvard Business Review study found that only 24% of respondents reported they were actively engaged in their work.
• A Forbes Study showed that the stocks of companies with high customer engagement grew 5x faster than the stock of companies with low customer engagement.

Given these workplace realities, we believe organizations need to make a dramatic shift. Instead of focusing primarily on shareholder value they must put more attention on creating a new and innovative work culture. A culture that is better at engaging both customers and employees is a more powerful way to increase shareholder value.
The two key questions are:

• Why is focusing on shareholder value so much more common than focusing on work culture?
• What does an organization have to do to successfully shift their focus?

The Focus Issue

Focusing on shareholder value is a much more measurable leadership task that has a long history of acceptance. Executives typically know what actions to take to impact the revenue and cost levers of their company. They hire more revenue generators and they take steps to reduce headcount and limit expenses.

Building and sustaining a winning culture is a radically different endeavor. It requires a skill set that is uncomfortable for many senior leaders. There is no “right way” to:

• Create a high level of trust where it is safe to push back and raise objections
• Find the right level of transparency and open communication
• Inspire smart-risk taking, innovation and experimentation
• Build in work/life balance
• Make professional development an important priority
• Encourage cross-functional collaboration and teamwork
• Provide effective rewards and recognition

How Do You Make The Shift Work?

First, there needs to be agreement at the C-Suite level about what “culture” is. It can’t be a “thing” or a string of well-crafted words that suggest a particular way of operating.
The culture consists of formal and informal “guiding principles” that shape the way individuals in a particular organization operate internally and externally. It needs to be a set of behaviors that leaders and employees work by and are held accountable for.

Next, the questions becomes how do you implement the culture. The answer is there is no foolproof formula. All organizations are different; therefore they must create their own unique implementation strategy. That said, there are several steps we can recommend to address the culture implementation issue:

Senior Team Offsite: The senior team sets aside time to determine what is currently working and what is not working in the culture. They work together to reach a consensus on the specific behaviors they believe are essential for future success. Then the team builds an action plan for integrating these behaviors into the daily fabric of the organization.

Feedback: Before implementing the action plan, senior leaders actively seek feedback on the cultural values from key cross sections of the organization. This is a critically important step, because it builds internal commitment and ownership beyond the C-Suite for the agreed-upon behaviors. Feedback in hand, senior leaders regroup and make revisions and course corrections as necessary.

Communication Plan: The business rationale for having specific cultural values is communicated to the entire organization.

Senior team leaders implement their personal action plans: Senior leaders meet with their teams to clarify how the culture in their department will operate going forward. They also communicate their personal commitment for living the values and their expectations about making them come alive in the organization.

The proof is in the pudding: What happens after the roll out is what really counts. Do the senior leaders stay committed to living the values and provide feedback to individuals who don’t?

We believe a shift in strategic focus will significantly improve an organization’s performance and its ability to innovate and experiment in this era of ongoing change.

➢ At CDL Consulting, Joe Collins and Gary Schuman work extensively with C-Suite Leaders to help them navigate the leadership issues involved in culture change and innovation.

Links:

1 Katzenback Culture Study: http://www.strategyand.pwc.com/reports/cultures-and-change-infographic

2 Hay Group Study: http://www.haygroup.com/downloads/us/studies reveal efforts to engage employees at work and beyond.pdf

3 Harvard Business Review Study: https://hbr.org/resources/pdfs/comm/achievers/hbr_achievers_report_sep13.pdf

4 Forbes Study: http://images.forbes.com/forbesinsights/StudyPDFs/SAP_Customer_Engagement-REPORT.pdf

The Leadership Vacuum

Posted on 10. Sep, 2012 by in Gary's Blog

Almost daily, the news media bombards us with the message that America is in crisis.  There’s the economic crisis.  The financial crisis.  The healthcare crisis.  The business integrity crisis.  The education crisis.   The immigration crisis.  However, there’s one crisis no one is talking about— it’s our LEADERSHIP CRISIS.

A definition of leadership is: the ability to create a positive vision for the future and guide or direct others in that direction. We’re in crisis mode — which leaders are making things better?

The political arena is a nightmare.  Congress is at an appalling 17% approval rate and yet obstructionism rules the day. How do elected officials sleep at night when they are charged with doing “the people’s business” and 83% of the people think they’re doing a terrible job?  The Senate couldn’t even pass the Disclosure Act, which would have created transparency regarding political donations on both sides of the aisle.  It’s astonishing that no one in either chamber has the courage to rise above partisanship to break the incredible legislative logjam when “the people” desperately need help.   There’s not much to cheer in the Presidential race; it’s already one giant negative shouting match.

The business front isn’t much better.  While rogue trading and LIBOR rigging are current hot topics, financial leaders are staunchly opposed to increasing controls that could avoid such disasters.  Adding insult to injury, you have corporate boards lavishing CEO’s with outsized pay packages, while the people doing the real work are struggling with the pressure of doing a lot more with a lot less.

And in sports, the very sad Gerry Sandusky/Joe Paterno spectacle has taken a coaching icon down several pegs.

How can this happen when so many important issues need to be addressed?

I believe strong and effective leadership is in short supply because many people in positions of power don’t really understand how to deliver it and worse many aren’t very open to learning how to do it.  Strong leadership is not about winning at all costs.  It’s not about beating your opponent into the ground. It’s not about dogma, charm or charisma.

Strong and effective leadership is about having a set of core beliefs and acting on them.  It’s about principles, integrity, authenticity, and candor.  It’s about the willingness to take smart risks and experiment with new ways of doing things.  And it requires a heavy dose of courage and personal accountability to stand up for your beliefs and not be afraid to admit when you screw things up.

I can hear the snickering already — how naïve can you be?  This isn’t Disneyland, this is the real world.  But in fact, people are craving effective leadership.  There is a reason President Obama’s campaign took off the way it did in 2008.  People were inspired and excited to have a leader promising Hope and Change.  The bad news for the president is there’s a price you pay for making a bold promise and not fully delivering on it.

Given our bleak leadership scenario what’s a country to do?  First we must recognize the significant consequences of this downward leadership spiral.  A recent AP article said that in an education survey of 34 countries, the U.S. ranked 14th in reading, 17th in science, 25th in math.   And in overall healthcare system performance, we’re ranked 37th. Are we satisfied being a middle-of-the-pack society?

Innovation and change that work in government, business, sports, communities, and even families don’t happen by chance or osmosis — or without some type of sacrifice.  For us to be a “shining city on the hill”, we need leaders who have a clear picture of what better looks like.  Leaders who have the courage to step up, push hard against the prevailing winds and resistance to change.  Leaders who will do the heavy lifting to get people to work together in a way that makes a difference.  Leaders who understand that to really succeed they must deliver tangible “wins” to defeat the cynical perception that people in positions of power only ”talk the talk”, but don’t have a clue how to walk it.

The bottom line:  For us to tackle our leadership crisis we need to admit we have one.  We need to blow a big hole in some basic assumptions about effective leadership.  And we need some courageous souls who are willing to step up and learn a few new tricks.  The good news about leadership is if they’re open to it — old dogs can learn new tricks!

Breaking Through Resistance

Posted on 22. Jun, 2010 by in Gary's Blog

On June 11th Mike Levine, Adam Klein and I hosted the third in a series of Senior Executive Leadership Breakfasts at Newsweek’s headquarters in New York.  This session featured Jon Katzenbach speaking about how to use the informal organization in a company to ignite change.

Jon, who wrote the seminal book on team effectiveness, The Wisdom of Teams, has a new book out called Leading Outside The Lines.  His perspective is that to accelerate the pace of change in an organization you have to use the informal part of the organization to push the formal side of the organization into action.

The formal side of the organization is about planning and logic.  The informal side of the organization is about passion and emotional commitment.  Jon’s main point was that to overcome resistance Senior Leaders must find the influencers inside their organization and enlist them in the change process before going company-wide.  Find out what they’re thinking, let them experiment, take action and deliver a win.  Then leverage their work and their influence in the organization to build buy-in.

The breakfast attendees, CEO’s, COO’s and division Presidents, found the concepts very appealing.  But the real payoff came in the discussion about the resistance they face in their organizations and what to do about it.  Several of the participants focused on the problems they have getting their direct reports to really embrace change.

As a psychologist, my perspective is that it takes a lot to get senior people to take the leap of faith required to embrace change.  First, you’re talking about people at the top of organizations who have been successful doing what they’ve done for years.  They’ve seen countless flavor-of-the-month “change events” that have delivered less than brilliant results.  Why should they believe this next one will be any different?

If you can overcome that issue, the next hurdle is dealing with the fact that not many executives have led successful change efforts.  In some ways you’re putting them in a difficult position: “I haven’t seen this work before and I don’t really know what to do myself”.

The way best way to break through this resistance is to start small and create a quick victory. In working with executives who are leading change efforts, my approach, once they’ve explained their vision and rationale for the initiative, is to get the team to take an action quickly that results in almost immediate, positive change.

You can talk all you want about why change is necessary and will improve performance.  But nothing trumps resistance more than a tangible win.

Delivering Unpopular News — When You Haven’t Bought In

Posted on 15. Jun, 2010 by in Gary's Blog

I was recently asked to contribute to Toddi Gutner’s  Management Q & A section of the Wall Street Journal on the question of how to deliver unpopular news to employees when you yourself are not totally “on board” with the message. Here is the article:

Question: What advice do you have for delivering an unpopular message to your employees, particularly when you may not have bought in to the message yourself?

–Student at UVA’s Darden School of Business in Charlottesville, Va.

Answer: It’s hard enough to deliver unpopular news to your employees, but it’s even harder when you struggle with the message yourself. If you’re in a position with your superiors to push back on the decision, you might want to try that first, recommends Gary Schuman, president of CDL Consulting, a leadership and change management consulting firm in Baltimore. “If you lose that battle, then as a leader you have to figure out a way to get onboard with the message,” he says.

To that end, take the time you need to get your own feelings about the decision in check. If you haven’t fully bought into it, “your employees will be able to tell in the tone of your voice or your body language that you do not believe in what you are doing,” says Ray Skiba, director of human resources at Streck, a manufacturer of clinical laboratory products in Omaha, Neb.

The worst thing you can do is send a mixed signal: “I don’t believe in this but they’re making me do it.” That may seem like the safest way out of challenging situation, but you’ll lose credibility with your staffers. “You’re making it clear you’re powerless in this situation and you’re selling out your responsibility as a leader to stand behind company policy,” says Mr. Schuman.

Once you’ve done your internal work, prepare yourself to deliver the message. If there was team involvement in the decision, ask one of the team members to listen to how you plan to address your employees. “The more prepared you are, the better the outcome,” says Mr. Skiba.

Next, consider your communication strategy. “Explain why the decision is important to the business, how the decision was made, and why it is important that the plan be executed,” says Kimberly Bishop, founder of a career management and leadership services consulting firm in New York.

Give your employees ample time to digest the message. Since it took you some time to accept the information, realize that your employees will need time as well. “When the message has been delivered, be available to answer questions, be visible and approachable to help individuals get to the point of acceptance,” says Mr. Skiba.

Realize that once your employees see that the decision has not totally destroyed their work environment, they may be more willing to let go of their anger. “You might want to get your group together a week or two after a decision has been made and ask people what’s been working and what hasn’t been working since the announcement,” says Mr. Schuman. Then see if there’s any action that you can take to improve the situation. Your availability to your employees and understanding of their experience will go a long way in making them see you as an effective leader.

The call for leadership

Posted on 11. Jan, 2010 by in Gary's Blog

Employees want strong and effective leaders. They want to know someone is at the helm who can get them out of this current mess. It’s senior management’s responsibility to take on the current economic situation directly. If an organization is staffed for double-digit growth and that’s not in the cards, management can’t ignore the situation. But instead of massive lay-offs, they could rethink the way the organization is structured, make decisions that prioritize what work DOESN’T get done, redeploy talent, or actually spend money to encourage innovation that opens up new revenue streams (i.e. Apple and the iPod/iPhone).

Read on…

Where have all the business leaders gone?

Posted on 04. Jan, 2010 by in Gary's Blog

The economic crisis has sent severe shockwaves through the world-wide business community. This has stimulated relentless reporting on job loss, foreclosures, rising unemployment, companies disappearing overnight, the fragile nature of the stock market, and bailouts of institutions too large to fail. Unthinkable events for a business world wired for positive news and continual growth.

Read on…