Is there any leadership left in large companies?

 Email Article |  Twitter |  Facebook |  digg it |   delicious |   StumbleUpon |   LinkedIn |  reddit 

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.

Can Small Business concepts work in big corporations?

 Email Article |  Twitter |  Facebook |  digg it |   delicious |   StumbleUpon |   LinkedIn |  reddit 

I read an article in Forbes on-line today by Matt Symonds asking “Can Entrepreneurship be Taught to Big Business”?  It seems that several business schools are trying to find a way to develop a term called “intrapreneurship”, or corporate entrepreneurship.

They see the need to drive small business innovation and flexibility to large corporations. While I certainly see the need to do so I will never believe that most large corporations will ever embrace those qualities with anything other than “lip service”.

Large companies have basically insulated themselves from their customers through cost cutting, and outsourcing. When was the last time you called a large company with an issue and got a live person on the phone without going through a series of maddening prompts? I had an issue with a credit card charge a few months back and was actually given the option of paying a fee for the opportunity to talk to a customer service representative. I have to admit I opted out.

The issues with large corporations go much deeper than the obvious however; the issues are fed by fear of liability, seemingly lack of trust of employees and turf management.

I’ve had experiences with numerous large companies over the years and am constantly amazed that many remain viable.  

One in particular that I’m familiar with is an excellent example of what I’m talking about. It’s a large Fortune 100 company in a highly regulated market. Product sales were historically driven by high quality and name recognition. As is common in most industries new competitors are entering the market putting cost pressures on the market leader.

They have responded by:

·     Increasing sales goals on field reps, while:

o   Cutting costs in inventory for sale

o   Cutting levels of service personnel and spare parts

o   Cutting billing and support personnel

o   Eliminating training and customer education

o   Centralizing all quotes and pricing delegations to headquarters functions, while maintaining almost no customer contact from that level.

In short there are conflicting goals and little or no customer contact beyond the sales reps in the field. To me this is a recipe for failure.

Large corporations whether through fear of litigation or lack of trust have layers of management and hundreds if not thousands of policies and procedures aimed at standardizing everything, where is the room for innovation in this environment?

Many years ago I worked at a senior level of a then Fortune 500 company. The saying there was “nails that stick out get hammered down”. I fear that’s as true today as it was then, maybe just more eloquently put.

I agree that lack of innovation, flexibility, poor communications are issues that are making large companies less competitive and vulnerable to smaller faster businesses. I also think that every company runs the risk of growing to a point that it loses the things that made it successful in the first place.

Only the most effective leadership can address these issues and prevent them or turn them around. That leadership ability must permeate through all levels of the organization. In a small business there are less layers to filter and interpret the message. Large corporations have many more opportunities to block out even the most effective focus and direction.

Until business schools can understand and resolve these issues which are based in human nature I do not see small business concepts being embraced by most corporations.

How do you improve leadership results?

 Email Article |  Twitter |  Facebook |  digg it |   delicious |   StumbleUpon |   LinkedIn |  reddit 

In our book Bottom Line Focus,  we talk about effective leadership being scarce. There are literally hundreds of books written on the subject, with no shortage of ideas and programs. Why then is effective leadership so hard to find?

I think first you have to clarify exactly what does effective leadership mean to you and your organization? In order to improve anything you have to have a clear understanding of three things.

• What does it look like when it’s better?
• Where is it now?
•  How do you measure progress?

So what constitutes and effective leader? 

First and foremost a leader gets results. If he or she doesn’t they may be popular but they won’t be a leader long. The difference between a leader and an effective leader is how those results are attained.

In todays highly complex, highly technical, and global environment effective leaders must learn to make use of all resources around them. This is a change from the days when the top person was expected to know everything and touch everything.

To do that you need to attract and retain excellent people, you need to create an environment that is open to communication and innovation, and you must allow them to fail. Innovation with penalties for failure creates a “don’t rock the boat” mentality.

So an effective leader gets results, develops great people and is an active listener and communicator. They are open minded, non –threatening and just as important non-threatened.

So the next step is where is your organization now? One way to tell other than simply results is to look for warning signs:

Take an honest look inside your organization. How many of these issues are present?

·     Excessive meetings with no agenda and no results

·     Consensus-driven decision making (CYA for all us older folks)

·     Lack of personal accountability

·     Poor communication between entities

·     Reluctance to terminate poor performers

·     Misaligned and uncoordinated efforts (silo effect)

·     Personality conflicts and power struggles

·     Apathetic and unmotivated employees

·     Inconsistent results

·     Poor time management

·     Reactive rather than proactive effort

·     Micro-management

·     Declining sales and / or market share

·     Lack of teamwork

·     Duplication of effort

·     High employee turnover

·     Substandard quality

·     Numerous unresolved issues and postponed decisions

All of these are symptoms of leadership issues.

Effective leadership creates an environment where things get accomplished, employees feel valued and part of an overall team.

If you want to be successful, you must be supported by an energized and competent management team. If you're not, your flow of communications is hindered in two directions. Your instructions don't go down the chain of command the way they should, so things aren't done the way you want. And communications from below don't come up to you in an accurate and timely manner, so you find out about important matters too late or not at all.

In order to be an effective leader of others you must first learn to lead yourself.

American’s job satisfaction falls to record low.

 Email Article |  Twitter |  Facebook |  digg it |   delicious |   StumbleUpon |   LinkedIn |  reddit 

According to an Associated Press article this morning only 45% of Americans are satisfied with their jobs. That’s the lowest level ever recorded and down from 49% in 2008.

The article said there were a variety of reasons:

• Fewer workers found their jobs interesting
• Incomes haven’t kept up with inflation
• Health care costs have eaten into take home pay.

This is obviously a huge problem since job dissatisfaction has direct implications on things such as:

• Productivity
• Innovation
• Product quality
• Customer satisfaction
• Costs in the form of scrap and rework.

I did some research after I read this article to see what the politicians and “experts” were saying as to the cause of this serious issue. There were few reasons cited except money, recognition, or advancement.

I think these things have always been an issue. Everyone wants more money, when they get it it’s a temporary fix. Recognition and advancement have always been in the forefront as well. The survey began in 1987 and at that time nearly 61% were happy with their jobs and I’d bet those three reasons were issues then also.

So what’s different between 1987 and 2008 that would cause a 16% drop in job satisfaction? That’s really the question to be answered.

I think it ties directly to leadership. I said in the preface of my book a few months ago that I think the biggest crisis facing America is the lack of leadership at all levels.

You can take that specifically to the jobsite or factory and look how it ties to employee dissatisfaction. In my role as a business coach I’ve personally seen things such as:

• Employees feel helpless, many feel it doesn’t matter if they do a great job or a mediocre job, the pay / recognition is the same.
• They have no control over their destiny. The economy, cost pressures etc. all affect them directly but the lower they are in the food chain the less they can control it.
• Nobody listens to them, innovation and ideas are held back because nobody asks, or acts on them if they do get heard.
• Poor performers are often kept in place of good performers because of seniority or friendships lowering employee incentive.
• Management often gives conflicting direction with shifting priorities causing employees to be unclear of expectations.
• Managers often don’t take the time to provide meaningful feedback, especially positive feedback.

Leaders must understand that employee satisfaction ties directly to their bottom line and invest time and money in employee development. Lack of leadership weakens and organization in many ways, the most obvious being:

• Lack of innovation
• Poor teamwork
• Increased costs
• Employee turnover

One thing I’ve heard often in the past few years during the economic downturn is “there are no jobs, there is nowhere for employees to go”. That’s only partially true, there may not be a lot of options for average employees to go but there is always somewhere for top employees to go, if not immediately at some point in the future.

Poor leadership often causes an organization to be comprised of average or below average employees due to better employees having options and moving on.