A One Minute Solution to the Biggest Issue Facing Business Today?

What if you could solve the biggest issue facing your business in just one minute?

In my experience, the biggest issue facing business today has been highlighted by Gallup’s research, which indicates that only 13% of employees are giving 100% on the job. That’s a lot of unhappy people and lost profits.

But it doesn’t need to be that way.

In fact, Gallup just released its list of 40 Organizations That Lead the World in Employee Engagement. Collectively, on average these organizations earn the enthusiastic support of 64% of all employees. That’s almost five times more engagement than the average company.

The question is how do they do it?

Gallup’s research shows that 70% of the variance in employee engagement scores across business units is related to management. Clearly, these 40 organizations have figured out how to hire and develop managers who can make that type of a difference.

But what do you do if you don’t work for one of the top 40?

My answer: read The New One Minute Manager by Ken Blanchard and Spencer Johnson.

This new book was just released and is based on the latest research in both medicine and behavioral science while offering an ease of readability that few books can match. It is a completely updated version of the all-time #1 bestseller on managing your work and life that has sold more than 13 million copies.

The book’s power is evident in its simplicity. The New Minute Manager offers 3 simple keys (goal setting, praise, and re-directs) to becoming a great manager. The book’s power is also found in its approach, offering an easy-to-read story to help everyone apply these important concepts. The authors do a fantastic job demonstrating how to have direct, open, and supportive conversations that deliver results.

What could happen if your company matched the top 40, where two-thirds of all employees give 100% each day? Imagine the possibilities.

The original One Minute Manager has been integral to my personal experience working with great teams that tripled the growth rates of million and billion dollar organizations. The New One Minute Manager will not only give you three powerful tools to help you succeed today but it will also help you apply these tools using stories that you will remember. It will be integral to your work, too.

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The ROI of Gender-Balanced Leadership

Many strong arguments have been made by authors Gerzema, Sandberg, Grant, Herman, and others for an increase in the number of women in business leadership roles, including at board, C-suite, and general management levels.

But here are the simple, research-based facts:

Leading global companies like Alibaba make gender-balanced leadership a top priority.

The clear bottom line is that an investment in gender-balanced leadership has a compelling ROI.

Learn more about gender-balanced leadership and do the smart (and right) thing for your business.

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Recruiting Wisdom

The last time the NASDAQ index hit 5,000 I was celebrating my one-month anniversary of leading operations at Opus 360, an internet startup with a compelling vision for the future, a great brand, and plans for an initial public offering (IPO) in the near future. Optimism was everywhere until the index began a slide that it would not fully recover from until earlier this month, one week shy of 15 years later.

There have been many articles written about the lessons learned when the bubble burst, but from my perspective—sitting in the middle of it—I can tell you the biggest lesson I learned was the critical role of employee support in a crisis and the value of recruiting wisdom. As a recent New York Times article points out, certain mental faculties increase with age. Tapping into this wisdom by recruiting experienced Chiefs can make all the difference when markets are under duress.

Background

Ari Horowitz and Carlos Cashman founded Opus 360 to provide innovative workforce solutions. Both entrepreneurs were visionaries who agreed with a view offered in Daniel Pink’s book Free Agent Nation: full-time employment will decline rapidly as companies increase their temporary workforce. These project-based workers act as free agents, capable of filling the needs of an organization by arriving just in time to begin a project and leaving the company’s rolls when the project was completed. Opus 360 had registered the domain FreeAgent.com.

This new view of the world created several business opportunities. First, an exchange, or marketplace, needed to be created to bring together buyers with specific projects (companies) and individual sellers with specific skills (free agents). Opus had initiated a major software development effort with the assumption that descriptive skills standards could be established among many constituents.

Second, the opportunity was created to attract free agents and to market products and services directly to them, supporting their independent lifestyle. Opus had already begun an aggressive advertising campaign to publicize this opportunity to a dispersed, independent community across the country.

Third, increased reliance on traditional staffing companies and temporary agencies created an opportunity for automated solutions to handle the increased workload and improve the quality of the matches. This would require another major software development effort.

Supporting Chiefs

When I arrived at Opus in February, the startup company was severely stretched as it tried to address all three markets. To their credit, Ari and Carlos had attracted a very talented but inexperienced team of Chiefs who were committed to changing the way the world works but who were also lacking discipline and focus. While prioritizing projects was essential to gaining control of the situation, another important part of our strategy was a recruiting plan to bring in experienced Chiefs who could help our existing Chiefs grow. We were in need of some real wisdom.

When the bubble burst and the NASDAQ crash began in March, it was clear we needed to accelerate our plans to support our team.

The plan worked. We were successful in recruiting a number of amazing Chiefs including:

  • Mary Anne Walk from AT&T to support our Chiefs in Human Resources
  • Pete Schwartz from Computer Associates to support our Chiefs in Finance
  • Jeanne Murphy from Cendant to support our Chiefs in Law
  • Tom Plunkett from ADP to support our Chiefs in Information Technology
  • Ram Chillarege from IBM to support or Chiefs in Development

These experienced Chiefs each brought wisdom in addition to critical skills, including the ability to coach and the willingness to learn. Our reliance on a cascade of Chiefs at Opus enabled us to convince our board to go ahead with an initial public offering.

Importantly, the team at Opus achieved the quarterly revenue and cost projections that Ari and I made during our IPO roadshow for the first year in spite of an economic climate in which a majority of our competitors went out of business. We continued to develop products and attracted a merger with Artemis a year later.

The blend of wisdom from our recruited team along with the innovative energy that already existed in this burgeoning young company created a diversity that drove our resilience in a volatile market.

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Aetna’s Unconventional Chief is Setting the Pace

Mark Bertolini is in the process of transforming a once stodgy insurance company into one of the most progressive companies in America, according to a recent New York Times article. Aetna’s Chief is succeeding on all fronts with a foundational approach to implementing programs that offer an unconventional level of employee support.

Bertolini has offered all 50,000 Aetna employees free yoga and mindfulness courses as part of an effort to create a healthier company by creating healthier employees—13,000 have taken advantage of the offer so far. The newsworthy mindfulness program delivers on Aetna’s core mission of “building a healthier world” and demonstrates their values of integrity, excellence, caring, and inspiration.

But that’s just part of the story.

To me the bigger takeaway is the extension of Aetna’s mindful service orientation to all of its constituencies under Chief Bertolini. I share a number of examples here.

For employees Aetna has delivered:

  • Increased pay by 33% for the firms lowest paid employees
  • Reduced out-of-pocket health care expenses for all employees

For customers and partners Aetna has delivered:

  • Leading solutions for—and with—government, employers, providers and individual consumers

For shareowners Aetna has delivered:

  • Industry leading revenue growth (14% CAGR) and earnings per share growth (15% CAGR)
  • Better total shareowner returns than any competitor with a tripling of the stock price

For the greater communities in which they serve Aetna has delivered:

  • Consistent improvement against aggressive targets in areas of land usage, transportation, water efficiency, building efficiency, ozone protection, renewable energy, air quality, and waste management

In short, Aetna’s mindful approach to their employee base is consistent with their service-oriented approach to all involved groups. Chief Bertolini is an unconventional Chief setting the pace for others in his industry, and in many ways, for the many other companies searching for role models who mindfully deliver on their mission.

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HR Skills: Critical for Entry Level Managers to CEOs

There are many routes to the CEO suite, but human resource jobs are often discounted as “not the proper path.” Change may be coming though, and sooner than you think.

Did you see December’s Harvard Business Review article, titled “Why HR Chiefs Make Great CEOs—Really”? The piece focuses on research conducted by Ellie Filler and Dave Ulrich. They analyzed similarities between top performers with Chief titles. The bottom line? The best performing Chief Human Resource Officers displayed traits most similar to those of successful CEOs, more so than high performing CFOs, CMOs, or CIOs. In fact, only Chief Operating Officers, whose roles and responsibilities often overlap with CEOs, displayed higher similarities.

It’s important to recognize the critical skillsets that human resource jobs enable employees to develop: namely, managing human capital to strengthen a company. Leaders at all levels must make HR a primary focus if they want to build a team that can generate sustainable growth.

For any company to succeed, it is critical to attract and retain the right talent. Companies need to organize, compensate, and build a change-adaptive culture. While the CHRO leads these efforts for a company, these keys are the responsibility of Chiefs at all levels, independent of their job titles.

Premier organizations like The Conference Board regularly report on CEO views of top global business priorities. Their 2015 survey results are due in March, but most expect last year’s top five CEO concerns to stick:

  1. Human capital
  2. Customer relationships
  3. Innovation
  4. Operational excellence
  5. Corporate brand and reputation

With Gartner reporting that over 85% of the U.S. workforce is not fully engaged (at a cost of $370B annually), the top priorities for every manager needs to include a focus on human capital and employee engagement.

The Harvard Business Review indicates that companies will increasingly look to executives with HR experience as CEO candidates, following path finders like Mary Barra, the current CEO at General Motors. Hopefully that’s true. But even a powerful CEO can’t fix engagement issues by him or herself.

All companies need to emphasize the human capital element of every manager’s job to increase the success of the organization. Integrating HR assignments as part of the development plans for future leaders is part of the solution.

The bottom line: HR skills are critical at every level to the success of any company—really.

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Suppliers and Appliers: Another Key to Sustainable Success

“If you can’t explain it simply, you don’t understand it well enough.” —Albert Einstein

Does your company understand what type of business it is? In my experience, there are three types of companies. Understanding what type of company you are is a key factor in unleashing your potential for truly sustainable success.

In a previous blog I shared my definition of sustainable success: (1) maintain above average market growth while you (2) earn employee engagement, (3) deliver shareowner value, (4) create customer loyalty, and (5) operate as a conscious and accountable member of the community.

To accomplish these objectives, companies must start by understanding what type of business they are, and must connect their understanding of the company to the priorities they set and the choices they make. There are three types of companies: suppliers, appliers, and combos.

Suppliers

The majority of companies in the world are suppliers. They provide products that meet customer’s needs. The product must match or beat the customer’s expectations in many areas, including specific features, availability, delivery, and quality. The best of these companies make it easy for potential new customers to choose products by selling them either directly or indirectly via convenient means. Accessibility to their product is key for supplier companies.

The best suppliers can also create new products, staying one step ahead in the game. Pricing is nearly always an important factor and profits stay high only for companies with demand or without competition (e.g. patent-protected drugs). One of the biggest challenges for suppliers is maintaining customer loyalty, even when competitors offer lower prices. Suppliers must invest financial and human capital in each of these areas to stay one step ahead of their competitors.

Appliers

Some companies understand a customer’s needs so well that they can become appliers. Using goods and services from multiple sources, appliers install or deploy a product that helps a customer solve problems.

Applier companies understand that their employees are their greatest asset. Investing heavily in human capital is important for appliers. Competition is part of every market, but appliers understand their employees can set them apart by delivering value and building strong relationships. One of the biggest challenges for appliers is to stay up to date on all the products and services in their industry, but appliers who build strong relationships can earn higher levels of customer loyalty and often, higher profitability.

Combos

The final category comprises combination companies, or what I call “combos.” They are both suppliers and appliers. A great example is Home Depot. With their original motto “You can do it. We can help,” Home Depot has generated revenue both as a supplier of goods and an applier of expertise. Another example is Xerox: “Do what you do best. We’ll manage the rest.” Similar to Home Depot, Xerox supplies customers with technology and applies technology to meet customer needs.

Companies like Xerox compete on features, availability, delivery, quality, or price as a supplier and compete on solving customer problems as an applier. Companies that both supply and apply have the challenge to compete against firms that specialize in only one area but also the opportunity for loyalty and higher margins by becoming a true partner with their customers.

Priorities and Choices

Today, there are great companies succeeding in all three categories. This success stems from an understanding of what type of business they are. Does your company understand what type of business it is? Are you a supplier? Are you an applier? Are you both? The answers lead to decisions that will make your business more successful.

As a supplier, do you understand your customer well enough to anticipate their future needs? Who makes the buying decision for your customer? Is it an applier? What part of your value proposition is most important in your market? Do innovations in technology change your relationship with your customer?

As an applier, are you investing enough to keep your workforce current? Are you leveraging your customer knowledge to expand your business? Are you pricing your services to match the value you provide customers?

As a combo, how do you manage both parts of your business to optimize each? When do you recommend your own products and when are you best served to recommend others?

Achieving sustainable success is the objective of every company. In all cases, a clear understanding of your business enables you to make decisions on where to invest resources and where to focus to achieve growth—for the long term.

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Success without Control

The pressure to succeed in today’s market is ever present. In many hyper-competitive work environments, companies are looking in every direction to gain any possible edge. Yet everyone is operating with access to the same information.

Some company leaders respond by attempting to centralize decision making in an effort to gain tight control over the rapidly and constantly changing forces that influence business outcomes. Others have learned a key lesson—centralizing decision making is often the worst thing you can do to improve performance because of one simple truth: control is an illusion.

So, how do you succeed without overreaching for control? Generally, you do everything possible to maximize the probability of success without control. But how? A good place to start to look for tips and best practices is the 2014 list of Most Admired Companies. Great companies do five things, consistently. They:

Increase discipline: Discipline is a critical component of sustainable success without control, and is a key to increasing its probability. First, companies that succeed are meticulous in planning the work and working the plan. But an often forgotten element of discipline is also the ability to adjust. Amazon is a master of discipline. In fact, they have developed a reputation of adjusting before others. Bezos’ ability to envision and adjust ahead of the market is set to be proven yet again. Learn how to adjust before it’s your only choice, and you will be ahead of the game when it comes to discipline.

Increase support: Companies that succeed over the long haul understand that their employees are their most important asset. Accordingly, firms that choose to invest in these assets by supporting their employees will get great returns. Starbucks sets a great example of support by innovating around employee education and benefits policies. Practices such as these attract a motivated, loyal employee base. Informed and motivated employees don’t need to be controlled. Encourage and enable your staff and you, too will unleash talent in your organization.

Encourage creativity: I propose that creativity is actually the ability to manifest, or create, the future. Another key to success without control is for companies to ensure they are aligned in everything they do. Is there a direct correlation between what they say and what they do? Whole Foods succeeds in this arena, by connecting what they say and write with what they do. Their senior leaders have also been very transparent about what they think and what they feel. The Whole Foods team is raising the bar when it comes to paving a new road for how we do business. Is your organization connecting what it says to what it does?

Encourage insight: The development of insight is one of the most valuable investments you can make, both personally and as a business. Confidence comes from understanding who you truly are. Forward thinking businesses are offering mindfulness programs to their staffs. Google’s popular meditation course Search Inside Yourself has been wildly successful. They clearly see this investment as a valuable part of their growth strategy. Offering programs of this sort will help your company tap into a powerful resource.

Reinforce values: Values are the foundation of relationships and of sustainable success without control. When people can connect to their values, and connect their values to their company’s values, the coherence that results can fuel a stronger commitment to the company’s success. CostCo’s focus on a concise code of ethics makes for an easily communicated value statement that shows in every phase of business. Are your organization’s values known to all? If not, consider a new communication strategy to get the message out.

Taken together, these five steps will both unlock the potential in your organization and lead to sustainable success without ill-advised overreach for control. Use this guidance to help make good choices with customers, costs, and financial capital while you stay knowledgeable about competitors and be an active, positive force in your community.

Following this roadmap won’t guarantee that your company will be added to next year’s list of Most Admired Companies, but it will absolutely help your company maximize the probability of sustainable success without control.

It’s the best you can do.

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The Most Important CTO

When I refer to “CTO,” does Chief Technology Officer come to mind? Or maybe Chief Training Officer? How about Chief Tax Officer? You might be surprised to learn that I am referring to another CTO—the most important CTO. In my opinion, the MVPs among CTOs are Chief Talent Officers. Often referred to as CHROs (Chief Human Resource Officers) or EVPs or SVPs of Human Resources, Chief Talent Officers lead teams that can make a sustainable difference in the performance of any group.

Having just returned from a national summit of Fortune 1000 CHROs/CTOs hosted by EVANTA where I was asked to speak, I was reminded again of lessons my Dad taught me over 50 years ago: Results come when relationships come first.

Spending time at the summit with top talent/human resource professionals was enlightening. In the company of the very best in their field, I was struck both by the quality of their respective best practices but also by their willingness to openly share over the course of two days.

Some highlights:

Chief Cynthia Trudell kicked off the session by describing how PepsiCo faces its “talent conundrum” by building a world-wide talent pool that can operate across a complex and evolving global marketplace.

Mark Reid shared some of the great work being done at USAA to earn amazing employee engagement results, unleashing the creativity of its talented workforce.

Susana Suarez and Glenn Gilkey shared Fluor Corporation’s strategy for their Human Resources organization to be its very best, including a strong focus on professional development.

Michael D’Ambrose from Archer Daniels Midland made a powerful case for companies to step up to their social responsibility to support future talent and help the million high school students who do not graduate each year.

Marissa Andrada offered insights from Starbucks where they have established a new relationship with their talent by shifting to a successful partnership that has positively impacted their bottom line.

Jeri Buchholz provided an inside view on supporting innovation at NASA.

Alejandro Quiroz led a great discussion on what it’s like to partner with a great CTO/CHRO organization at Whirlpool where innovative approaches help them with global workforce challenges.

Breakout sessions were led by an equally impressive set of Chiefs including Dean Carter at Sears, John McMahon at Cumberland Gulf, Peggy Pego at PSEG, Regis Mulot at Staples, Shibu Varghese at The University of Texas MD Anderson Cancer Center, among others.

My talk focused on choices each Chief can make to be their very best, even in tough times. I offered my All-In Roadmap to the attendees as a tool for unlocking their potential and the potential in their teams. From their feedback it was clear my message struck a chord, and I was grateful to have served such a distinguished audience.

It is clear that the market success enjoyed by each of these industry leading companies can be tied, in large measure, to their respective focus on talent and their obsession to deliver for and through their employees. I applaud their tenacity and dedication.

CTOs (Chief Talent Officers, including leaders with other titles who focus on talent) rule!

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10 Ways to Set Your Team Up for Success

“Talent is energy waiting to be released through an honest involvement in life.” These words, written by New York Times bestselling author Mark Nepo sure hit the nail on the head. If you view your team’s talent in terms of potential energy, you are sure to find a near-endless supply of innovation, motivation, and problem solving—but only if you do your part.

In my experience, leaders who relentlessly focus on each of the following ten areas unleash the talent (energy) in any organization and deliver sustainable results.

Selection: Hire thoughtfully. Consider not only past experiences but also personality and EQ—emotional intelligence. Will a candidate be able to succeed given the dynamics of the group they are joining? It takes more than book-smarts and experience to effectively operate within a team.

Education: Invest in your people. When employees feel supported while expanding their skills, your whole team will gain the fruits of their learning, and usually, their loyalty.

Communication: Remember that communication is the joint construction of meaning. Always seek feedback to ensure the desired message is getting through. Verbal and written communication is equally important.

Organization: Build to align. How you organize your team will determine how it functions. Strive to create synergies that help to balance skills and personalities across your teams.

Compensation: Pay at market value, and balance pay components to align with your short and longer term strategic focus where you can.

Recognition: Celebrate accomplishments both formally and informally. Positive reinforcement is an effective motivator. A simple, “nice work,” as well as performance bonuses or company-wide award programs will go a long way toward engaging your team.

Promotion: Once you recognize the role models on your team, promote them. Your employees will understand what it takes to move up.

Retention: Never assume your employees will stick around long-term. What can you do to retain your best leaders (at every level)? When others call to poach your best and brightest, employees should have no hesitation as they hang up the phone. You may need to take a closer look at what keeps your employees loyal.

Performance management: Review both the what and the how of expectations and results. Where misalignment exists, be sure to correct for it with effective consequences.

Values: Establish clear values across the team. Reinforce these values on a regular basis by taking them “off the wall” and putting them “on the agenda.” This will set the tone for the organization.

The only sustainable advantage for organizations is people. Tap into this energy—this talent—by recognizing its potential in every interaction and in every project. When a strong focus is centered around supporting the people who make up your organization, their ability to serve your customers, shareholders, and their community will be multiplied and it will be sustainable. With continued attention to these ten areas, the success of your team will be unleashed.

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A New Definition of Sustainable Success

My dad once said that any baseball player can have a good season, but it takes a different kind of focus to be great throughout his entire career. The goal of any athlete should be sustained excellence, Dad said. He also taught me that in business, the same rule applied.

As a career HR professional, Dad taught me that focusing on employees is the key to sustainable success and growth for a business. When markets shift and customers’ needs change while technology enables new solutions, it’s a company’s employees who design, develop, and deliver the services and products that keep customers happy and attract new ones. I learned the key was to create cultures where employees would bring their best to work each day. Employees who fully engage enable companies to thrive, year after year.

When I went to business school, professors helped me expand my notion of sustainable success. They indicated the focus for sustainability should include the shareowner. I learned it’s a company’s shareowners that provide the capital necessary to run and build a business. Shareowners who can count on consistent, long-term growth will likely see improving stock prices and increases in dividends. In turn, capital will continue to flow to the company to fuel growth over time.

During my first job at Sperry Corporation, my notion of sustainable success expanded yet again. In sales, it became crystal clear that a company’s focus should always be the customer. It’s a customer who decides if a company is successful by making a buying decision. Companies must work hard to earn customer loyalty. While a satisfied customer might seek a slightly better product feature or better price from a competitor, loyal customers won’t. Building loyal customer relationships enables a company to enjoy sustained success, quarter after quarter.

More recently, my understanding of what sustainable success truly means expanded again when I learned about the four questions former CEO Sam Palmisano used when he ran IBM. The first three were in line with what I had learned about employees, shareowners, and customers:

1. Why would someone work for you?
2. Why would someone invest their money with you?
3. Why would someone spend their money with you—what is unique about you?

But the fourth question caused me to expand my thinking again:

4. Why would society allow you to operate in their region?

This last question caused me to shift my thinking in two ways. First, it expanded my recognition of the impact of an organization and got me thinking about what measurable outcomes are required to claim success within a specific community. We had employee engagement surveys, customer satisfaction analyses, and enough financial reporting to choke a horse. But being a good corporate citizen in the community includes more than an occasional philanthropic donation for social good or caring for the environment beyond simply not polluting. Sam’s fourth question requires more than a “do no immediate harm” approach; it requires a “make it better” solution.

Second, this new question also shifted my perspective about time. Unlike the first three questions that had an unspoken time frame of “quarter to quarter” or “year to year,” this question shifted my thinking from the short term to the truly long term. Thinking in terms of “decade to decade” or “century to century,” such that it could continue indefinitely, is clearly a new bar.

Taken together, this expanded view of inclusion along with a completely new view of accountability over time forms a new definition of sustainable success. Those companies that deliver truly sustainable growth are focused on all constituencies and a true long-term perspective. Companies that earn employee engagement, deliver shareowner value, create customer loyalty, and operate as conscious members of the community are accountable for the sustainable prosperity for this and future generations.

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