Is there any leadership left in large companies?

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Everyone is familiar with the horrible public image projected by BP’s CEO during public talks on the gulf oil disaster. For an educated, experienced executive I don’t see how he could have come off any worse than he did. And that was his public image. I wonder what he’s like inside the walls of BP?

I was thinking about that this weekend while discussing management and job related issues with several friends and family members. It appears last weekend was the time for all job related concerns to surface.

What surprised me about the conversations I had with two of the people was I really wasn’t surprised. I have experienced so many similar occurrences in my history I almost expect it.

Both people were to say the least de-motivated. I’m not sure de-motivated is a word, but I can’t think of another that’s better suited. I say that because both people are self-driven, hard working, and results driven individuals that I’ve known for many years. What their management has succeeded in doing is converting a highly motivated employee into a disengaged employee.

I spent some time thinking about how that happens, and I have to admit it wasn’t that hard to understand. They both report to mid-level managers and middle management in a large company is not a great place to be. They are for the most part afraid. They make a decent to great salary and have a nice benefit package, they are usually middle aged or later, and they know if they get shown the door, the chance of them duplicating their current situation is slim. So they develop the “hunker down” mentality. Don’t make waves, don’t take risks, don’t do anything that might result in making a mistake. They become caretakers of their own organization filtering information up the chain of command. Innovation, creativity, leadership are all things that are best left to someone else, what if I make a mistake? Worse yet what will happen to me if I have a top performing employee that is visible to my bosses, they see that as a risk to themselves not as an asset to the corporation.

Leadership defiantly starts at the top, but effective leadership makes sure it’s carried through the entire organization. Top management is all too often fed sanitized data, and is unaware of employee issues, customer issues or anything other than earnings and stock prices. If the numbers are good all must be well. That’s how a guy can get so out of touch with reality like our friend from BP, but he isn’t alone.

I wrote an article a few years ago saying that I believe the large corporation is outdated and cannot survive in it’s present form. I have seen nothing that makes me believe otherwise. Large corporations are afraid of lawsuits. They deal with this fear by not delegating anything below a certain level of management. They try to offset this lack of delegation by volumes of processes and procedures to limit the exposure of middle management, wrongly thinking that level will escalate any exceptions.

Middle management is “hunkered down” and isn’t about to take the risk of telling anyone anything. So the system is flawed from the start.

Effective leadership doesn’t foster fear, and it allows innovation, open communication and even failure. Fear of failure results in no risks, no risk taking results in no innovation and no change. On change results in a slow certain demise of the organization.

WIIFM for better leadership results

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In order to get the most from your employees, and from your staff you need to learn and communicate WIIFM. (What’s In It For Me). In order for employees to embrace organizational goals they must view them as their own. To do that they must clearly understand how meeting the goals of the organization is tied to achieving their personal goals.

It is much more difficult to separate personal and professional lives than it was even twenty years ago. Money alone is not the primary motivator but a short-term benefit quickly absorbed and forgotten. With the commonality of the two job household, work is a huge part of personal conversation and thought.

Leaders who take the time and make the effort to understand employee wants and needs, and helps the employee set personal goals that complement organizational goals will find better leadership results very achievable.

Goal setting is not a common practice among most of us. It starts by defining what you want in clear and crisp terms. Most of us have great difficulty in understanding or accepting what we want. Needs are easier to define, I need $500 more per month, I need a new car. Once the need is met the problem goes away and along with it the motivation.

Wants are very difficult to define. If you haven’t tried it you may be surprised. One of the exercises in our Leadership Development program is to develop a “dream inventory”. It’s a list of anything and everything you want to achieve or own or whatever your dreams are. We tell the participants to stop at fifty.

I have seen very few got even ten.

We are programmed to take care of needs and forget about most wants. If you can understand your employees wants and tie the achievement into attainment of organizational goals, you have a long term recipe for leadership results.

WIIFM starts with your personal goals and ties into your professional goals why should it be different with your employees?

Leaders need to encourage goal setting on a personal and well as professional level. Most people don’t have a plan for their lives, they just allow life to happen. They give more thought and planning to a two-week vacation than they do for the most important journey of all the journey through life.  If you can help your direct reports understand this and set goals, then have them take it down throughout the organization, how effective do you think that might be?

Explaining your organizational goals so al understand and giving everyone the opportunity to buy-in and develop personal goals that they can achieve through attainment of your goals is a win-win for everyone.

Use investment to fuel growth and sales & marketing effectiveness

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When companies think of return on investment, (ROI), theytypically consider capital investments. Purchases of new machines or softwareaimed at specific tasks with a measurable return on invested capital such as productivitygains, increased production, faster billing etc.

However does investing in non-tangible items provide a realreturn to your business, and how do you measure that return?

Most companies are reluctant to spend money on intangiblessuch as employee training and development, or nonproduction related expensesrelated to plant and equipment. Let’s face it, its tough to measure a clearreturn on investment of intangibles.

It might be easier to measure the impact of not making theinvestment, such as high employee turnover, poor quality, poor customerservice, and lost market share.

I am working with a client that has made significantinvestment in what would normally be called intangibles, and has seen anexcellent return on that money. I typically don’t name clients but since thisarticle is focused on the positives I think he won’t mind.

Aardvark Memphis is a full service property maintenancecompany, with the largest fleet of sweeper trucks in the tri-state area. Theyalso do warehouse sweeping and scrubbing, retail teardown and build outs, floormaintenance and nearly everything related to maintaining retail or industrialproperty.

I’ve worked with them for about a year on strategicplanning, diversification and sales and marketing effectiveness.

One of the reasons I’ve had to work with them on sales andmarketing is they’ve never done any. The company has been in business for 14years, has been profitable for 13 of those years and has never done any reallevel of sales. They have experienced excellent growth entirely throughcustomer referrals and word of mouth.

What sets them apart? A high level of commitment to qualityand doing whatever they do right. The owner spends money on things that mostowners wouldn’t consider. For instance he washes his fleet of trucks everyday.He maintains all of his equipment to original OEM specifications, and investsin technology from GPS to track routes to maintenance logs. He has a high levelof commitment to employees and customer alike.

While the return on the money he spends on “intangibles” maybe had to justify in hard numbers, the results are hard to argue with. The highlevel of commitment he gives to quality and appearance creates expectations forhis employees. They clearly see his commitment and follow that lead whethercaring for the equipment or performing work at a customer location, theexpectation is, only best effort is enough.

The results speak for themselves, growth, profitability,customer loyalty and limited sales expense.

Bottom Line Results come with Risk.

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I had a very interesting conversation this week with a potential client about risk. This person was an entrepreneur in the true sense, in that he had built several businesses successfully, and ultimately failed at one. He went through a personal bankruptcy, started over working in a sales position, made a small fortune and recently quit the lucrative and secure sales job to work full time in another startup that he is currently self funding.

Since we both had the pleasure and experience of laying it all on the line through personal guarantees and risking our entire net worth on startup ventures multiple times we had a common platform from which to access risk.

His comment to me during the discussion was “most people could not live with the level of risk we accepted”.  I thought about that afterward and he’s probably right. Most people are content working for someone else and letting them take the risk.  However most small to mid-sized business owners and CEO’s accept risk as part of the price to play the game. How they deal with that risk however varies greatly.

Personal guarantees on bank loans and lines of credit are a fact of life for the small to mid-sized guy. Often between cash invested in order to satisfy other investors that you have “skin in the game”, and guarantees to lenders to “insure you’re committed”, they have most, if not all, of their net worth on the line.

Thinking back over my 35 years It seems that the successful ones are those that develop an attitude that they cannot fail, and do whatever is necessary to make the business work. Those that fall by the wayside are those that are slow to move and deal with issues, sometimes even the obvious ones. They both often have the same level of stress and risk they just deal with it differently.

The successful ones met issues head on. Even when they didn’t know how to resolve them, they asked for help, tried different things and ultimately figured it out. They seemed to accept the old adage “bad news doesn’t get better with age”.

They seem to have figured out that dealing with stress effectively is a direct path to better bottom line results. 

It seems the unsuccessful ones dealt with stress and risk differently. They often ignore obvious problems and stay busy with the day-to-day things they can control.

They hope these issues will go away on their own. They are reluctant to ask for help because many are afraid that accepting change means they were wrong in what they were doing. As I thought about this further I reflected on experiences I’ve had with clients and can think of numerous specific examples of these two scenarios.

How is your business doing? Are you satisfied with the direction you’re going and the results you’re getting?  Take that question one step further how are you dealing with the stress associated with the risks you’re taking?  Then ask yourself what am I going to do about it?

Effective leadership needed drive change in your business in 2010.

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If you are like the majority of company leaders the short answer is not much until it’s forced to happen.

Just like the famous new years resolutions for weight loss or some other worthwhile goal frequently falls by the wayside the goals of business leaders for their organizations frequently go off track.

March is the last month of the first quarter of 2010. By now you should have a good idea of where your plans and goals are headed foe the year.

There is an old saying that people change only when the pain to change becomes less than the pain of staying the same.

Experience has shown this to be all too true.

We’ve all read that over 50% of business that fail don’t have a business plan. What is probably not as well known are the following facts:

• ·     90% of well crafted and documented strategies fail due to poor execution.
• ·     Over 70% of business improvement initiatives and programs fail due to inability to sustain focus.
• ·     Nearly 90% of leadership teams spend less than 1 hour per month on strategy.
• ·     On average 95% of employees don’t know or don’t understand the company’s strategy and don’t even have access to it.
• ·     92% of organizations don’t measure performance.

 The current recession has forced many companies to make changes. The question is, were those changes proactive or reactive in nature? Change is a constant, and how you plan for it and deal with it is up to you.

My role as a business coach gives me a broad inside look at many types and sizes of organizations. I like to tell people I have two types of clients, the inspired and the desperate. Unfortunate there are too few inspired and far too many desperate.

In my business I am constantly looking at programs and tools available to small and mid-sized business leaders. There is no shortage of information and products to choose from. What must be considered prior to buying a product or service is what is the desired outcome? Clearly sustainability is an issue in the majority of companies regardless of the challenge. The statistics above prove that.

 A seminar on quality, or motivation usually lasts as long as it takes for the participant to get back to the office and get hit with “business as usual”. The only thing that drives true change is spaced repetition of a new concept and accountability.

True change management starts with a clear vision, is supported by a documented plan that aligns people and processes to support that vision, and is sustained by leadership and accountability.

There just isn’t any other way.

Follow the link for a free whitepaper “How to Recession Proof Your Business “