Leadership failures are routinely in the headlines. A recent example includes management’s admission of the rigged emissions tests at Volkswagen. Locally, a former publicly-held, global executive search firm that was started in Cleveland, CTPartners, unwound and disappeared after a variety of allegations were raised against its CEO. Another local headline grabber involved Pilot Flying J, the Knoxville-based (and run by the Cleveland Browns owner) truck-stop company accused of a scheme to defraud commercial customers of rebates.
These leadership failures cost owners, shareholders and other stakeholders dearly. The Volkswagen scandal is expected to cost the company $87 billion. Other historic failures and their price tag include WorldCom at $107 billion, Enron at $74 billion and Bernie Madoff’s Ponzi scheme at $20 billion. Of course many leaders of those companies lost jobs and/or served jail time, and the companies went bankrupt or went away.
Most leadership failures never make the headlines, and are much more insidious. In addition, most are not caused by fraud but by poor leadership skills and practices. In a recent interview with Dr. James de Gaspe Bonar of the Bonar Institute for Purposeful Leadership, and based on surveys by The Economist and others, nearly half of corporate leaders are incompetent or untrained for their roles.
Vince Molinaro, author of The Leadership Contract, discusses leadership failure in these terms:
- Leadership is disappointing – 75% of employees report that their boss is the worst part of their job.
- Leadership is disconnected – half of surveyed CEO’s feel isolated in their roles, and thus less effective.
- Leadership is disgraceful – the most pessimistic of surveys show that only 7% of employees have confidence their leaders are looking out for their best interests.
Fortunately, most organizations are not in a situation of leadership failure or crisis. However, even these organizations may benefit by improving leadership training and accountability.
Molinaro suggests having leaders sign a leadership contract at each new level of leadership, and as part of four steps to driving leadership accountability. Here are the four steps:
- Make leadership accountability a business priority.
- Enumerate the obligations of leadership with a written contract.
- Train and coach leaders on dealing with tough decisions.
- Create a leadership community by connecting leaders.
Molinaro provides a tremendous amount of supporting detail and substantive suggestions on implementation of the contract in his book.
For shareholders, boards of directors, CEO’s and others who are responsible for overseeing organizational leaders, the idea of a leadership accountability contract may be appealing. Not all organizations would choose to use a formal contract, but the level of commitment and communication involved in doing so would certainly provide a structured approach to addressing leadership performance and accountability.
The impact of leadership failure can be devastating. A clear communication and review of leadership responsibilities can certainly help avoid leadership failure, and a leadership contract is a great start.
For help in designing and implementing leadership accountability programs in your organization, please contact us.
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Last week I attended the HRPS Annual Conference in Scottsdale. This was my first time attending and I was representing the HR Leadership Group of Northeast Ohio. The HRPS organization is part of SHRM, and is SHRM’s Executive Network. This year’s theme was The New Talent Ecosystem, and many of the speakers talked about the rapidly changing role of CHRO’s.
Among the list of outstanding speakers was Stuart Crabb, Director of Learning and Development at Facebook. His presentation was titled Positive Leadership and Culture in a VUCA World. VUCA is an acronym meaning volatility, uncertainty, complexity and ambiguity, and certainly applies to the world of CHRO’s.
Stuart described a new leadership paradigm that is required in VUCA times, including moving away from a problem solving mentality and towards a mindset of making sense of dilemma, and organizing for uncertainty. He pointed out that highly positive organizations with highly engaged employees have tremendous potential to outperform their peers. So the key is to create a positive culture filled with engaged employees. Here are some steps Facebook has taken to do just that.
In building a positive culture, Stuart described six building blocks:
- Inspiration – with leaders and employees inspiring each other
- Meaning – starting with the corporate purpose and emphasized in the work itself
- Respect – so that trust is high
- Caring – for each other and for customers
- Compassion – demonstrated with kindness for others in times of suffering
- Forgiveness – avoiding blame
These building blocks are tied to the Facebook Vision of connecting the world’s 7 billion people in order to make the world a better place. My description looks very clinical, but as Stuart described Facebook’s purpose and culture, I could feel the appeal of wanting to work there.
Facebook uses these building blocks to set expectations for managers in the company. Here are the seven elements required for managing in the company:
- Show care
- Support people so they can grow in their areas of strength
- Set clear goals and expectations
- Give clear, actionable feedback
- Provide resources and remove obstacles
- Hold people and teams accountable
- Recognize people and teams
Stuart pointed out that moving into a management role at Facebook is considered a lateral move, meaning no pay raise. That is intended to make sure people are making the move because they feel managing is a passion rather than a way to earn more. Facebook understands the critical role of the manager in keeping employees engaged and happy, and wants people who are committed to managing well.
Facebook’s journey toward developing a highly positive culture filled with highly engaged employees in a VUCA world created a wonderful learning environment. Stuart generously shared some valuable lessons he learned along the way, including these:
- Connecting people to a vision that is exciting and meaningful is key for employee fulfillment
- Engaged leaders are required in order to inspire people to take action
- It is important to strive for personalization at scale during growth in order to create an intimate and positive experience for each employee
- Roles and people should be aligned around strengths and reinforced throughout the employee lifecycle
- The most effective way to express organizational positivity is through the language and lens of organizational values
- Data wins arguments
- Many times bad performance is tied to a bad hire, so remediation is usually not a good investment – better to hire well
Facebook’s growth and impact have been impressive, but Stuart said they have a long way to go, with 1.6 billion active users on the way to 7 billion. Along the way, Facebook may also help crack the VUCA code. Good luck Facebook!
For help in designing and implementing talent programs that will help you retain your people, please contact us.
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In previous articles, I recommended developing a talent philosophy in order to express the value organizations place on their people, and to guide organizations on people decisions. For example, an organization might determine that when it comes to their people they want to:
The third part of this example is Reward Generously. Organizations invest heavily to identify, attract and hire great talent. In addition, after talent is acquired, organizations lead with care by helping people blossom to the benefit of the individual and the organization. The third phase is focused on retention efforts, or rewarding generously.
In our Future State Talent model, rewarding generously includes three elements:
Engaging Talent – creating and maintaining a culture that is inclusive and helps people feel passionate and committed at work.
Rewarding Talent – recognizing and rewarding people for efforts and results, and doing so in a way that is meaningful to each person.
Promoting Talent – planning for succession and long-term leadership based on matching individual performance and development results with organizational needs.
According to a Gallup poll only 13% of employees are truly engaged. There is much written about engaging employees and how to improve it. Surveys are fine, but having conversations with employees is better. Hiring and developing talented people who share an organizations mission, values and purpose is the best starting point for an engaged workforce. Then engagement is mostly about keeping employees connected and giving them a voice and an opportunity to make positive change.
Rewarding people includes recognition for superior efforts, competitive compensation and an opportunity to earn bonuses based on superior results. According to M.I.T. , the purpose of an employee recognition program is to recognize and reward work and behaviors that support/further the mission, goals, values and initiatives of the organization. Opportunities to earn rewards and recognition should be well publicized and transparent and generate enthusiasm within the organization.
A natural extension of rewards and recognition is promotions. Promotions should be a result of an overall succession plan. The best succession plans start with organizational needs rather than with people. That way an organization can be certain their future leadership needs will be met. Organizations certainly want to promote from within, but some leadership needs require talent not readily available within an organization.
Stories abound about unhappy employees and those who leave companies, including well publicized stories about Amazon and Walmart. Less sensationalized stories of employee dissatisfaction are found in many social media venues like Glassdoor. There are also many success stories from companies like Southwest Airlines and Ritz Carlton. Interestingly, Amazon and Walmart are still around and doing well. So strong talent retention efforts are less about keeping an organization from failing, and more about helping an organization excel.
To discuss how we can help in designing and implementing talent programs that will retain your people, please contact us.
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In a previous article, I recommended developing a talent philosophy in order to express the value organizations place on their people, and to guide organizations on people decisions. For example, an organization might determine that when it comes to their people they want to:
The second part of this example is Lead with Care. Organizations invest heavily to identify, attract and hire great talent. Once talent is acquired, organizations lead with care by helping people blossom to the benefit of the individual and the organization.
In our Future State Talent model, leading with care includes three elements:
Talent Development – training, coaching and mentoring.
Talent Deployment– making sure people are using their strengths in their roles and doing meaningful work.
Talent Performance – setting smart goals, and using high-touch communications to help people succeed.
Learning and development is evolving rapidly, and organizations are finding that their people like to have training that is customized to fit their interests and learning styles. Best in class organizations combine customized training solutions with meaningful stretch assignments. They also infuse healthy doses of coaching and mentoring from higher level managers, subject matter experts and executives. This approach sets the tone for lifelong learning and development, which highly talented people crave.
Research shows that people who use their strengths at work are more satisfied, more engaged and more productive. Best in class organizations help determine what their people’s strengths are and which roles will let them use those strengths. As Jim Collins likes to say, it’s about getting people in the right seats on the bus.
Great organizations have always been focused on performance management. The tools used to manage performance, though, are also evolving rapidly. Annual performance reviews are no longer the standard, at least not as a stand-alone method of measuring and rewarding performance. In a “we succeed when our people succeed” environment, best in class organizations provide transparent and meaningful goals that are tied to the strategic goals of the organization. That way people know what they need to do to succeed AND why they are doing it. In addition, these organizations provide frequent, course adjusting feedback.
A misstep in this area can be quite costly to an organization. According to a recent Gallup poll, disengaged employees are estimated to cost the U.S. between $450B and $550B annually. Gallup also found that 70% of U.S. employees are not engaged (lack passion and connection with their work). Imagine the cultural benefits and productivity improvements organizations can enjoy by leading with care.
For help in designing and implementing talent programs that will help you lead with care, please contact us.
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