Art Petty on Management

Art Petty on Management Has Changed and Moved

I don't like to do things small or simple, so in what I sincerely hope is the absolute last time I put myself and you through this, I have moved and changed the name of my blog. 

You will now find me at www.artpetty.com and the new name of the blog is Management Excellence.

As I'm writing this and realizing that most people that have moved blogs have basically had to start over from zero to build traffic, this seems like taking two steps in the wrong direction.  However, sometimes you have to step back to grow, and I've got some compelling reasons for making the move, including:

• Integrating my former corporate web site and my blog under one content management system.

• Creating a simpler url (artpetty.com...12 characters versus the almost 40 for this site).

• Gaining the tools and the control through a hosted blog so that I can easily add planned podcasts, webcasts, forums and other tools that I will roll out this year.

• Aligning my blog's name: Management Excellence with my personal mission to promote high performance, great leadership and the pursuit of excellence in business.  

All of the posts and hopefully, all of the comments have been moved to the new site, so 14 months,  160 plus essays and a tremendous number of thoughtful comments on best practices in leadership and strategy, project management, product management and marketing and sales, all remain part of the library. 

For those of you that subscribe via your favorite Reader or happen across this post via Search, please take the opportunity to visit the new Management Excellence site and click on the site's feed.  And don't forget to check out some of the new tools, including the live polls, free down-loadable tools and links and references to many other great resources.

Thanks so much for reading and referencing Art Petty on Management, and I hope to earn your confidence many times over in my new home at the Management Excellence blog!

Surviving and Prospering Under a Weak Leader

It’s not secret that complaining about the boss is part of the culture of many teams and organizations.  The person in charge is an easy target and a certain amount of healthy griping about the boss may be cathartic for his or her subordinates.  It creates a common bond on teams where any form of bonding can help strengthen relationships and possibly performance.

When working with clients in consulting environments or working with teams in workshops, I tend to tune out background boss chatter until the tone and content of the conversation crosses what I call the Performance Line.  This line is crossed when it becomes clear to me that the performance of an individual or a team is being held hostage by a weak leader. 

In my recent post, Weak Leadership at the Top Derails the Pursuit of Performance Excellence, I characterize the problem as follows: Instead of overwhelming their associates with strict orders in pursuit of rigid targets, they (weak leaders) default on their responsibility to set direction in a poorly constructed attempt to create an environment of empowerment. The results of this approach include endless discussions without resultant actions and massive frustration of well-intended personnel that want to move projects and ideas forward. 

If you are working for someone that resembles this description, it can be a truly debilitating experience, especially if your nature is to drive and to innovate and experiment in pursuit of success.  Working for a weak leader can make you feel like you are running the Boston Marathon with your feet permanently encased in concrete.

I’ve worked with teams to identify ideas to help people break out of the concrete shoes created by a weak leader.  Here are some of the suggestions that they’ve come up with as they’ve talked through this dilemma.  Perhaps one or more of these will work for you.

Five Non-confrontational Suggestions for Coping and Even Prospering Under a Well-Meaning but Weak Leader

1. Make the leader the hero.  Not all weak leaders are bad people, and sometimes a dose of self-confidence is just what the doctor ordered.  Talk with this individual, paint a picture of how things will be different when the initiative in question is successful.  Show that you and your team have done a good job isolating and planning for the risks, and tie the expected outcomes back to organizational objectives or in the case of nonprofits, organizational missions. 

2.  Build Coalitions Across Your Peer Group.  A weak leader tends to create a vacuum of decision-making.  This vacuum can be filled by the leader’s subordinates aligned around the common need for action.  This is not a confrontational coalition, but rather a working coalition that moves things forward in spite of the leader. 

3.  Recognize the Psychology of the Weak Leader and Use Judo on It.  The weak leader syndrome is frequently a function of a lack of self-confidence, fear of having to say no to a subordinate and upsetting them, and perhaps fear of team mistakes shining directly on the leader.  This same person has a need to succeed, a desire to be liked and wants to feel that he or she has a voice in the direction.  Leverage this leader as you would a counselor.  Ask for help in framing solutions (even if it has already been framed), and make the leader very genuinely feel like an advisor and coach.  Make it comfortable for him or her to give feedback, and encourage this at every opportunity.  Involve the leader in brainstorming or in status reviews and do an extraordinary job of highlighting progress and or problems and how they are being handled. 

4.  Coach the Leader.  In spite of the lofty position, top leaders are often hungry for feedback and interested in receiving coaching from people that they trust.  Create opportunities for discussions that are not all about you.  If the leader provides an opening (many will), ask a few open ended questions about how things are going, what it’s like to deal with the Board etc., and shut up and let him or her talk.  It is amazing how lonely it can be at the top, and this act of listening can do a great deal of good in gaining the trust of a leader.

5.  Learn to Understand the Priorities of the Leader.  Applying several of the approaches above will help you understand the leader’s individual priorities (personal and professional).  This knowledge is priceless if you and your peers use it to help the leader meet his or her targets. 

The Bottom-Line for Now

Learning to manage your team leader takes time and requires extraordinary care and handling.  Being indecisive and failing to set direction are big shortcomings for a leader, but leaders that carry these attributes are all too common. You and your peers can either let the water-cooler complaints dominate the daily agenda or you can do something about it.  Teams and individuals that have leveraged some or all of the suggestions above have reported some nice successes.  No complete cures, but some nice successes and sustained progress in the right direction.  When your feet are cast in concrete, progress of any kind is good.

Weak Leadership at the Top Derails The Pursuit of Performance Excellence

While some top executives err on the side of asserting a dictatorial style of leadership that poisons the working environment and stifles independent action, in my experience, many more struggle with just the opposite.  Instead of overwhelming their associates with strict orders in pursuit of rigid targets, they default on their responsibility to set direction in a poorly constructed attempt to create an environment of empowerment. The results of this approach include endless discussions without resultant actions and massive frustration of well-intended personnel that want to move projects and ideas forward.

This laissez-faire top leadership style is particularly problematic when teams are facing vexing problems: a new strategy vector, the need to change imposed by external forces or a new operating initiative (e.g. a quality program).  At the point in time where resolve is required to step off the cliff in pursuit of the new initiative, this leader steps back and waits for the group to agree to jump. And waits, and waits, and then waits some more, while the group endlessly debates what it means to jump.  Committees are born, research initiatives established, and political agendas developed and asserted.  And still, the top leader waits, fearful that asserting authority will undermine the independent thinking and free spirited structure of the team.  What a disaster.

Don’t misinterpret my tone as an indictment of empowerment and the need for self-directed work teams at the senior level.  I believe that the best performing teams have a wide berth when it comes to identifying problems and developing and implementing solutions.  However, this type of effective team culture comes as a result of a conscious decision to empower.  Inherent in this conscious decision is the understanding of all parties that there is accountability for making progress and for ultimately improving the organization.  This is very different from the form of leadership where the lack of a decision and lack of responsibility for action is the permanent outcome.

I cannot speak with certainty about why some top leaders suffer from a chronically weak leadership and decision-making style, however, I suspect that it has a lot to do with a concern for upsetting people and a general discomfort with giving feedback.  Top leaders are most definitely not immune from the same challenges that everyone else faces when it comes to conducting tough discussions with others.  Top leaders want to be liked, they want to be respected and they want their direct reports to feel good about what they are doing, where they are working and who they are working for.   All of these provide good reasons for not upsetting the apple-cart in the mind of the top leader.

The Bottom-Line for Now:

There are no magical cures for the top leader that lacks the resolve to assert direction, require action or give feedback to under-performing teams or individuals.  Coaching can help if the individual recognizes his or her shortcomings and truly wants to change.  And while some top executives are willing to go down this path, too many are beyond the point where they think that they need to improve.  After all, they are in charge.

Next: How to survive if you work for a weak leader.

“If I had asked customers what they wanted, they would have said faster horses.”

Students of business history might recognize the quote above as coming from Henry Ford, the founder of Ford Motor Company and one of the early management innovators.  Mr. Ford’s quote raises a profound issue of when and how to listen to customers, or perhaps the more challenging flip side: when not to listen to customers.

The notion of not asking customers what they want and responding directly to their needs may seem like heresy to those individuals and organizations consumed with improving customer satisfaction and creating customer loyalty.  In fact, you should always listen and importantly, observe.  The real art in this process is understanding what customers really need, what problems they really would like to solve and what approaches and experiences that you can create that can surprise and delight them.

Harvard Professor, Clayton Christensen, seized upon this issue in his Innovator’s Dilemma/Innovator’s Solution books, where he suggests that a well-intentioned business may do everything right by listening and responding to customer requests, and ultimately fail as disruptive offerings upset the status quo.  

In my own work in the technology space over the past two decades, it is easy to look back at product development cycles driven by a never-ending desire to cram in customer-driven features, without a good understanding of why those features were needed and whether they were solving key problems or attacking symptoms.  It always felt like we were doing the right thing, but in hindsight, it was blind marketing. As Product Management systems improved and requirements development received more scrutiny, this situation improved.  Nonetheless, it is hard to see how the forest is changing when you are staring so intently at the trees. 

Christensen’s classic scenario is the company that dutifully enhances its offerings based on client input, ultimately creating bloated offerings with capabilities far exceeding what might be required of many or any buyers.  In the interim, a disruptive offering…something perhaps with fewer features and priced much lower (not always the case) can easily swoop in and…well, disrupt the market.  In essence, the well-managed, well-intentioned company created a vacuum that was filled by someone who understood the essence of the client’s problems…not just the features they were asking for.  (Think “Faster Horses” versus a new mode of transportation.)

The authors of the recent book, Tuned In, tackle this important topic by suggesting that a firm focus on developing Resonators, products or services that practically sell themselves.  Their six step process for creating a resonator and for Tuning In is in my opinion, a framework for avoiding the Innovator’s Dilemma that Christensen warns us about.

The design firm Ideo in their famous Deep Dive segment on ABC News showcase a process for design innovation that is what you might imagine a sociological dig would look like, as they follow and observe the various “buyers” of shopping carts in pursuit of understanding how this classic device could be grossly improved to better solve real problems.  While there is a fair amount of criticism of the “made for TV” nature of this episode, it offers some classic lessons in looking and observing to identify significant and perhaps even disruptive improvements.  Just asking a store manager or a customer about what they would like to see improved in their shopping cart may be insufficient for identifying what a shopping cart might actually be able to do.  Think cell phones and the iphone. 

The Bottom Line for Now:

My message here is intended as a cautionary tale.  It is good and right and noble to pursue increasing levels of customer satisfaction in your framework for operational excellence.  However, it is also easy to be misled by false signals, and sometimes those signals come from your customers.  Remember, they know you in a narrow context, so when they engage with you to talk about improving the Widgets that you make, they are thinking about you only as the Widget Company and as users of your widgets.  Their context is to give you ideas to improve your widgets. Just remember that it is quite possible that they don’t need a better widget or a faster horse. 

You need to build the institutional intelligence, the systems and of course the talent that truly focuses on understanding the unstated needs of buyers.  Of course, once you understand this, the real work of meeting and exceeding those needs as an organization begins. 

The Dollar Auction and a Failure of Rational Judgment

One of the more fascinating social experiments that I have observed is a game credited to Martin Shubik, called The Dollar Auction.   My context for this auction has been in groups of senior leaders (classrooms of 30 or more) during Executive Development events.  In these settings filled with lofty titles carried by people driving nice cars and wearing expensive suits, the auction is actually for a $20 dollar bill…not just a lowly $1.

The game works like this:

-Everyone in the room is eligible to bid on the $20 bill.  The bidding starts at $1.00.

-The second place bidder must pay the amount of his/her losing bid.

Things start out as expected.  Someone opens the bidding, it quickly escalates to the risk-free level of par value and then pauses for just a second as the players ponder their strategy.  Often, the  $19 bidder recognizes their risky situation and decides to stick it to the fool willing to pay $20 to get $20.  After a momentary pause, this group of executives is off to the races. 

I’ve personally witnessed corporate executives of all types escalate the bidding into the hundreds of dollars.  I’ve also watched as groups came back to their senses and stopped short of $100.  I’ve not yet witnessed any group stop at $20 or below.  (Full disclosure: you should know that the executives were told in these settings that the winning bid above par will be donated to charity and the losing bid payment used for drinks that evening.)

Shubik commented on observing the same behaviors above that, “game theory alone will probably never be adequate to explain such a process.” 

While I am unqualified to offer clinical commentary on this pathological behavior, we don’t have to look far to see it at work in the current financial crisis.

• AIG is admitting on the day following the $85 billion (billion with a “B”) federal government bailout of this global giant that they had no idea how bad things really were.  I thought that firms that dabbled in insurance had a good handle on risk. 

• The overnight dissolution of Lehman, Bear and billions of dollars in partner equity was created on the back of exotic mortgage-oriented financial instruments that are so complicated that few understand them.  Hmm, how many over-educated people willing to bid more than a dollar for a dollar does it take to destroy a financial system?

• The housing industry and mortgage financiers built the real-estate bubble and catalyzed the credit crisis by effectively enticing unwitting individuals into paying more than a dollar for a dollar.  Hey, I’m all for caveat emptor, but why did the builders and mortgage bankers/brokers/underwriters think that they could extend this auction indefinitely without someone or something calling a sudden, rude halt to these people printing their own money?

The Bottom-Line for Now:

The common outcome of The Dollar Auction offers an interesting perspective on human behavior.  We are seeing similar manifestations of this behavior at work in what we are slowly learning about the events leading up to this historic (not in a good sense) financial crisis.  For some reason, common sense, prudence and good, old-fashioned principles of  risk management fly out the window when it appears that the magical money-making machine has been turned on.  Whatever happened to making money by developing goods and delivering services that meet and exceed customer needs?

I’ve long spoken openly about my perspective that the destruction of a business and the abuse of stakeholder trust are crimes punishable by imprisonment.  Ditto that for the destruction of a financial system.

The Leadership Art (and Importance) of Encouraging Constructive Dissent

I hear frequently from leaders that wish their employees would disagree with them more often when discussing complex issues. 

“I’ve told everyone over and over again that they should be comfortable disagreeing with me, but other than some polite alternatives, no one seems to have the courage to speak up,”  indicated one frustrated executive that I talked with recently.

“We all know that when the discussion ends we’re going to do it her way, so why bother wasting our time debating,” said one of the employees of the frustrated executive.

In this situation, the executive was sending mixed signals.  While her employees acknowledged that she verbally encouraged constructive debate, no one seemed to believe that she truly meant it.   One of her employees indicated that the message never matched the body language—“she never looks like she truly wants anyone to disagree,” he said. 

In the article Reaching Your Potential, by Robert S. Kaplan, in the July-August, 2008 Harvard Business Review, Prof. Kaplan cites a scenario where a CEO was frustrated that none of his three top reports raised their concerns over a prospective hire, in spite of the fact that two of them had serious reservations.  The candidate was hired and the concerns only came to light once he began to struggle.  The executives had concluded, “the CEOs mind was made up and that speaking up was unwise.”

Professor Kaplan observes that: “Otherwise overconfident executives sometimes overestimate the career risk of speaking up and meaningfully underestimate the risk of staying silent.”  He adds: “I have seldom seen people hurt their careers by speaking up and appropriately articulating a well-thought out contrary position.  However, I have seen many bitter and confused people who stalled their careers by playing it safe.”

Leader, Heal Thyself!

In both examples above (and in most examples that I've observed), the leaders clearly failed to create the working environment that allowed and even encouraged constructive dissent. While the employees can be faulted for not acting in the best interests of their firm, there was something in the environment that triggered their survival instinct and indicated that it was safer to stay silent than to speak up.  The leader invariable controls the “something” and needs to focus on reshaping the environment to open up the communication flow. 

• How severe is the problem?  The leader should ask his or her reports about their comfort and discomfort in providing feedback. What are the barriers?  What behaviors is the leader displaying that shut down constructive dissent?  If the personal interviews go nowhere or if there is no 360-degree feedback system in place, try a simple, anonymous survey. 

• Leader, learn to manage your body language.  We all learn somewhere in our travels that if you combine a verbal message with seemingly conflicting non-verbal cues, the non-verbal wins out every time.

• Recognize that giving in to alternative viewpoints (from your own) does not mean that you are weak or ineffective.  To the contrary, it’s your job to hire smart people with different ways of looking at the world and solving problems.  The greatest leaders have great advisors.  Give your people a chance to play that role.

• If you are like many of the leaders that I know, you will allow a group to run in their own direction even though you had a different idea of where they should go.  You will also come to the uncomfortable conclusion that they were right and you were wrong.   Your confidence in calling this out will reinforce the notion that you encourage well-thought out dissent. 

The Bottom-Line for Now:

This topic goes to the heart of creating an effective feedback culture—one where everyone is comfortable tackling the tough topics and highlighting when the Emperor has no clothes.  The discomfort of a team in expressing alternative viewpoints with a leader is one sign that all is not right with the feedback culture.  In many cases, some simple behavioral adjustments and appropriate reinforcement on the part of the leader can open the spigot to some great ideas from some smart people.  Remember, the contest is in the market for the hearts, minds and dollars of your customers, it’s not in your team meetings to show that you’re the smartest. 

How comfortable are your associates in disagreeing with you?

 

Decision-Making and The Three Rules of Risk Management

Your decision-making style says a lot about you as a leader.  Some people make a lot of decisions with little more than a gut hunch to guide them and others spend a lot of time gathering insights and information to support their decision.  Others struggle to make decisions on anything and might still be considering what to order for breakfast when it’s time for dinner.  And still others avoid making decisions because taking a stand increases the odds that they will be held accountable for results.  

Our decision-making style is driven in large part by our tolerance of risk, something that can change based on many personal and professional circumstances.  An executive guiding a turn-around might operate with a high-degree of risk tolerance, while a project manager leading a construction project might have a much lower risk tolerance.  First-time leaders might not have formed a solid decision-making style and might process risk at a slightly more conservative level than how they perceive their direct manager dealing with it. 

A participant in a recent leadership workshop that I conducted offered up the Three Rules of Risk Management that she learned from her father (an engineer).  I am grateful that she shared and appreciative of the wisdom her father passed along in these simple but powerful rules.

The Three Rules of Risk Management

1. Don’t risk more than you can afford to lose.

Good advice for corporate leaders, mid-level managers and everyone in their personal lives.  Determining what you can “afford to lose” is of course the key issue here, and sometimes not so easy to calculate.  A patient requiring a heart-transplant to live has one definition and a single parent that needs a paycheck to feed his family has another.  It’s OK to agonize over this one a bit…it is the foundational data point of the Three Rules.

2. Never risk a lot for a little.

Common sense, yes, but I see this one violated everyday. People risk their credibility arguing over who’s right and who’s wrong on small issues.  Boards and executive teams pursue ill-conceived acquisitions based on questionable assumptions.  Marketing and development teams invest heavily in new products without a good understanding of the problem they are trying to solve for their prospective buyers. The operative issue here is defining whether the perceived end game or outcome is worth a lot (usually the assumption) or some fraction of a lot (usually reality).  Align risk with the true definition of the outcome.

3. In general, take the risk if you can affect the outcome.

In my opinion, this is the most profound of the three rules, and another point worth agonizing over as you formulate your decision.  Hoping that the dice roll your way is what helped build all of those grand palaces in Las Vegas.  You cannot control the dice…they have a mind of their own, and in a business environment, hoping for the market to move your way is a guarantee that you will make your better-prepared competitor rich.  You cannot affect the outcome of most situations at 100 percent, so once again, you are left to sort what you can control and what is beyond your control.  This rule guides you to accept risk if you can control a significant portion of the outcome. 

The Bottom-Line for Now:

Learning to think through your risk-environment can help you make the right calls on the tough issues.  The Three Rules are not a silver-bullet, but they do offer a simple framework for mentally processing the implications of a decision. 

In general, I’ve found that most people prefer working for leaders that make a lot of decisions and that make decisions quickly.  Certainly, a leader that is slow to make up her mind or that will never make a decision has an adverse impact on her team and her organization.  Alternatively, a leader that is too fast to decide or that decides more on a hunch than a good understanding of the facts, issues and risks, is prone to making significant mistakes as well.  The trick is finding the right balance, and balance is about understanding and measuring your risks against possible returns.  Use the Three Rules to find the right risk/return balance for your decisions.