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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Organizations face many challenges, and leaders make difficult decisions on a daily basis. As part of our Future State Talent Solutions talent strategy model, we recommend leaders develop a talent philosophy to express the value they place on their people, and guide them on people decisions. For example, an organization might determine that when it comes to their people they want to: Choose wisely, lead with care and reward generously.
Choosing wisely means acquiring people who fit culturally and have competencies to succeed individually while helping the organization succeed. How important is choosing wisely? According to a Cornerstone on Demand report, the monetary cost of a poor hire can be up to $200K. The flip side is that functioning without employees in key roles can cost up to $7000 a day – $210,000 every month a key role is unfilled. So choosing wisely is more than just making a good hire, it’s also about being prepared to do so quickly.
As you can see, choosing wisely can have tremendously positive benefits for an organization. In our model choosing wisely, or talent acquisition, is made up of three elements:
Identifying talent – knowing the key skills and competencies you need to drive strategic results for your organization, and where to find people who have them.
Attracting talent – creating an employer brand and value proposition that draws desired talent.
Hiring talent – executing a process that secures talent efficiently and effectively.
– They have a pipeline of candidates for strategic roles who have been nurtured and educated about opportunities with the organization.
– They have a process for quickly interviewing a handful of candidates (at most) and selecting the best.
– They are prepared to make a great offer that clearly represents a major improvement over the individual’s current role.
– They have an onboarding process that starts with offer acceptance and continues well into the first year of employment.
Nothing about their process is reactive, and they always have great people interested in joining.
Choosing wisely also includes doing so from the candidate perspective. Not only should the opportunity represent a major win for the candidate, it should make them feel like they are becoming an integral part of the organization’s future. Everyone involved should believe that they chose wisely.
Is your talent acquisition process best in class? If not, let us help you get there. Then you will be on your way to creating a strategic business advantage with your people.
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This year is the 50th anniversary for the Northern Ohio Human Resources Conference, better known as NOHRC. Over 650 HR professionals gathered at the IX center earlier this month for the two-day event sponsored by the Cleveland chapter of SHRM. The second day was filled with national and local speakers who provided tremendous content on topics related to talent management and HR.
As with Mike Medoro’s CSHRM Newsletters (each successive newsletter is the best one yet), this NOHRC event was the best I have attended. That is high praise since I have been to several and they have all been great – including the two events planned and delivered in magnificent style by Maria Gaeta and Michelle Salis while I served as president of CSHRM.
One of the sessions I attended this year was titled Building Succession Planning Capabilities by Marian Wright. For me it was coincidental that Lauren Rudman, Past President of CSHRM, sat next to me. Lauren has been involved in CSHRM for years, as far back as when I was on the board. Even then I was certain Lauren would lead the organization one day. The chapter has done an excellent job of recruiting and nurturing volunteer leaders to keep CSHRM relevant and growing. That brings me back to the succession planning session.
Marian Wright is a former HR executive and owner of Wrightside Consulting. Her presentation included:
- A definition of succession planning – identifying and developing people with potential to fill key positions.
- Several factors on why succession planning is important – looming retirements, potential loss of institutional knowledge, over-reliance on enigmatic leaders and unplanned leadership departure.
- Benefits of proactive succession planning – talent pipeline, stronger leaders, career path communication and leadership diversity.
- Key components of succession planning – inventory of key positions, evaluation of talent performance and potential, developmental plans and follow-through.
- Best in class succession planning characteristics – leaders held responsible for developing talent, plans reviewed regularly and use of 360-degree feedback.
- Importance of using metrics, and examples – bench depth, diversity, effectiveness and development plans.
- Challenges – lack of management support, learning curves and lack of internal talent.
- Logical starting points – building a business case for succession planning, identifying key roles and truly understanding talent.
Marian included tools and support materials to build her case for proactive succession planning, and shared stories of her experiences implementing world-class succession planning for her employers and clients. The session was well attended and Marian was generous with providing advice and guidance in the Q & A session. For example, even though conventional wisdom indicates that millennials will change jobs with record frequency, Marian noted that talent retention will increase with proactive succession planning. Overall, Marian’s presentation was entertaining, informative and impressive.
Proactive succession planning has been used successfully by the NOHRC and CSHRM HR professionals for 50 years and counting. Thanks for another great event, and best wishes for another 50 years of success!
Please let us know if we can help you with your proactive succession plans.
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