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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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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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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Zappos’ Holacracy—A Brilliant New Idea or Not Necessary?

Did you see the news that Zappos announced it is abolishing bosses? Zappos refers to their “new” approach as holacracy, and it’s already being heralded as tech’s latest new management craze. In summary, holacracy is management by committee with an emphasis on innovation—even the CEO formally relinquishes authority by agreeing to a constitution and reorganizing everyone into decentralized teams that choose their own roles and goals.

The objective of holacracy is to unleash the potential of every employee to behave like a Chief. While I am a huge fan of Zappos CEO Tony Hsieh, in my view this organization design is not new, nor is it required to unlock employee potential. Here’s why.

Holacracy is Not New

I recall a sales review I did almost 20 years ago as a Regional Vice President at Unisys Corporation. During a forecasting session, a sales representative told me he had no idea when a computer sale would close because his customer made all decisions by committee. That’s when I first learned about a company named W.L. Gore.

The sales rep told me that founders Bill and Vieve Gore started W. L. Gore & Associates in 1958. The company initially served the electronic products market. The company’s 1969 discovery of a versatile new polymer led to the development of many new applications in medical, fabric, and industrial markets.

What distinguished Gore from its start in 1958 was its innovative management structure. Specifically, it has never utilized traditional managers, titles, or budgets, and it has always been very wary about economies of scale. Amazingly, their CEO has never been appointed by the board, but instead has been chosen by peers. The Gore culture expects every associate to act as a Chief. As a result, what has Gore accomplished?

Today, Gore is one of the 200 largest privately held U.S. companies with 10,000 employees (called associates) and more than $3 billion in revenue. In 2014, Gore retained its position as a member of the U.S. “100 Best Companies to Work For” list, as one of the few earning this distinction every year since the ranking was initiated in 1984. Gore has been granted more than 2,000 patents worldwide in a wide range of fields, including electronics and polymer processing, and has had more than 35 million of its medical devices implanted, saving and improving the quality of lives worldwide.

If it’s so successful, should every company move to holacracy?

Holacracy is Not Necessary

In my experience, neither Zappos’ holacracy nor Gore’s committee structure is required to enable companies to create a culture of Chiefs, in which individual potential is unlocked. I have personally worked in a wide range of companies and company structures that delivered great results with cultures that enabled every associate to act as a Chief. For example, an internet startup facing a market crash grew revenue from $1M to $11M in just a year, and a multinational tripled its revenue growth rate from 5 to 15%, growing to $5B while facing intense market competition. In each case, both employee and customer satisfaction reached new levels.

The keys to success can be found in Jim Heskett’s and John Kotter’s book Corporate Culture and Performance. First published more than 20 years ago, it provides great insights on how any leader in any company can build a culture of Chiefs.

Heskett and Kotter offer specific, research-based advice on how to create performance-enhancing, change-adaptive cultures where Chiefs lead at all levels. They focus on actions (discipline, support, and creativity) and attributes (insight and values) that unlock employee potential, drive innovation, and lead to sustained success:

10 Specific Ways to Build a Culture of Chiefs in Any Company

  • Establish a vision for the organization that emphasizes consistent tactical adjustments
  • Communicate consistently and broadly
  • Display an “outsiders” propensity to embrace change and new ideas
  • Reinforce the importance of innovation
  • Build and maintain an “insiders” credibility
  • Establish leadership or the ability to produce change as an important focus at all levels
  • Decentralize decision making where possible
  • Promote carefully, and demote when necessary
  • Operate as a servant leader

The bottom line: success comes from an engaged employee group in which individuals at every level are empowered to act as Chiefs. This culture can be created in any organization with the right attention and intention.

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A New Measure of Business Success

We are currently facing some of the most difficult global challenges in a generation: inclusion, recession, and depletion.

Inclusion: nearly three billion people will enter the global middle class in the next 20 years.
Recession: the global economy is still feeling the effects of the 2008 financial meltdown.
Depletion: the climate is warming, which is straining our resources and depleting nearly two-thirds of our ecosystems (e.g. soil, fish and forests).

But there is good news.

While these problems are escalating worldwide, there has been a growing movement in the business community toward “triple bottom line” solutions—those that focus on people, profit, and the planet. Triple bottom line solutions actually enable companies to solve customer problems while driving increased profitably and improving society.

Sound too good to be true?

There is an increasing body of research to support this claim. For example, R. Paul Herman’s Human Impact + Profit (HIP) methodology tracks, rates, and ranks companies’ quantifiable impact on society, connecting “doing well” with “doing good.” The research from Paul’s 8-year old company shows consistent improvements in results with triple bottom-line strategies. While Paul’s ground-breaking book The HIP Investor is targeted at current or prospective business owners, the HIP Scorecard is also a management system that shows how business leaders can benefit from doing the right thing, the right way.

Simplification is almost always a good idea, particularly when you are attempting to focus a large group to act on complex global challenges. Since research supports exponential returns with this approach, I offer this equation as the new measure of business success:

Responsibility3 = people + profit + planet

Want even better news?

There is a dramatic increase in the number of business leaders who are working together and taking a Responsibility3 focus. Networks of these enlightened leaders are quickly growing around the world, and they include small to medium sized companies (the American Sustainable Business Council has over 200,000 members) as well as some of the world’s largest companies (the World Business Council for Sustainable Development has over 170 multinational members). These networks also include more established groups that are adding Responsibility3 to their existing charters (the Young Presidents’ Organization has over 21,000 members worldwide). These groups are all focused on exponential vs. incremental change.

Building on this momentum, several of these powerful networks recently chose to align. As a result, the Business Alliance for the Future was formed. And while work is underway to determine how best to measure progress in all three areas, this alliance of networks has chosen as its motto: “The future of business is making the future its business.”

The bottom line: Business is increasingly taking responsibility for a truly sustainable future.

That’s really good news.

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Business Growth from the Inside Out with Mindfulness

Employee engagement is a constant struggle that seems to be getting worse. The New York Times described the problem, yet again, just last month in an opinion article on employee burnout. The article reports that Harvard Medical School psychiatrist and assistant clinical professor Srinivasan S. Pillay surveyed a random sample of 72 senior leaders and found that almost every one reported some signs of burnout. As workers worldwide are reporting that they “lack a fulfilling workplace,” companies have an opportunity to get a better return for their investment in human capital and drive growth.

As it turns out, employees are more satisfied and productive when four of their core needs are met: physical, emotional, mental, and spiritual. According to the Times article, the more effectively leaders support employees in meeting these needs, the more likely employees will be to engage, be loyal and satisfied, and exhibit positive energy, increased productivity, and less stress at work.

The answer is right in front of you. Or more specifically, within you. When you take a mindful approach to business—that is, when you engage in mindfulness meditation practices that develop your ability to remain attentive to the present moment—your performance at work improves. Mindfulness is a state of active, open attention to the present. It involves observing current experiences without judgment. Mindfulness allows you to more fully participate in the moment in which you find yourself. When you are in a mindful state, you are ready for anything. You respond rather than react. And you create more space in your mind for insight—where your best ideas come from.

Although mindfulness is a hot topic these days, it’s hardly new. Harvard Business School professor Bill George reports that the company he led as Chief (Medtronic) had a meditation room almost forty years ago, thanks to the vision of founder Earl Bakken. A major proponent of mindfulness meditation, George has been meditating himself since 1975. Two years ago we learned about the wildly successful Search Inside Yourself (S.I.Y.) mindfulness meditation course held at Google and taught by Chade-Meng Tan, Google’s 107th employee. Tan teaches emotional intelligence via a practical, real-world meditation that can be used anywhere. This practice encourages participants to be aware of feelings without acting on them as a way to more accurately understand one’s circumstances. Google clearly sees this investment as a valuable part of their growth strategy.

Jon Kabat-Zinn is responsible for much of the popularization of the secular practice of mindfulness through his mindfulness-based stress reduction (MBSR) program initiated in 1979. MBSR is the most widely studied mindfulness practice, although some would point even farther back to the groundbreaking work of Norman Vincent Peale, who wrote The Power of Positive Thinking back in 1952. Since that time, clinical studies have documented the physical and mental health benefits of mindfulness in general, and MBSR in particular. Programs based on MBSR and similar models have been widely adapted in schools, prisons, hospitals, veterans’ centers, and other environments. As relates to business, mindfulness meditation practices have been found to increase productivity and creativity as well as reduce burnout and increase growth.

In short, more businesses need to support mindfulness practices by employees. I view it as an effective investment in human capital that consistently delivers great returns. Chiefs at every level stand to benefit from this simple, yet profound practice.

For more information, you might enjoy:
Mindfulness is Spreading, But Here’s What’s Missing, Real Leaders
The Mindful Revolution, TIME magazine
Thrive, a book by Arianna Huffington

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Building Trust from the Inside Out

Building trust is central to building a great business. For companies to grow they need to earn the trust of their clients, partners, and the community at large. Unfortunately, many companies are failing to earn that trust, and confidence in business integrity is at an all time low. In fact, recent reports calculate that fewer than 26 percent of individuals have trust in the financial systems at the foundation of business.

Despite the downward trend in building and maintaining trust in business, there are plenty of examples of how to get it right. Warren Buffett made news recently when he and Charlie Munger revealed hiring trustworthy leaders is a central component of their growth strategy at Berkshire Hathaway (BH). Given the collective size, diversity, and success of their portfolio of companies, BH offers many company leaders a path worth following.

Buffett and Munger clearly understand the simple and powerful truth—trust is built from the inside out.

BH companies build a culture of trust among their employees who then extend that culture to clients, owners, and the community. Once hired, BH steps back and lets these trustworthy managers do their job. Working from the inside out, this approach is in stark contrast to many companies that “double-down” on centralized compliance measures that slow decision making and increase costs. All too often, centralized compliance strategies fail to produce cultures of trust and integrity. The lack of trust eventually extends to customers and the community at large.

On a daily basis, we see examples of ethics issues in business. Recently, the public learned that Snap Chat was dishonest to their customers about images saved on their servers. This latest example joins the growing number of ethics violations by financial companies, who now are paying record fines for illegal activity.

So what can business leaders do to build a culture of trust? In addition to hiring trustworthy people, leaders can take the following steps:

  • Set clear expectations and regularly reinforce integrity as the basis of all activities
  • Ensure proper and adequate training
  • Have zero tolerance for any activity “close to the line” on ethics
  • Include values in performance management tools
  • Align compensation plans with values

I believe Buffett and Munger’s success stems as much from who they are as what they do. Specifically, I believe they have developed a deep level of self-understanding that enables both leaders to build trusted relationships and set the tone that fosters trust in their companies.

In the book Building Trust, authors Robert Solomon and Fernando Flores offer an insightful view on what they call authentic trust. They assert that the ultimate question is not who to trust, but how to trust. They contend that the ability to trust comes from inside an individual.

To Solomon and Flores, trust is “an emotional skill, an active part of our lives that we can build and sustain with our commitments, emotions and integrity.” The key to building the capacity to trust, they say, comes with self-understanding.

So how can business leaders develop self-understanding to build a culture of trust? In my experience, this insight comes when we make five choices:

  • Be present and focused on the here and now
  • Be generous with others
  • Be grateful for the opportunities in front of you
  • Be accepting of the reality of what is
  • Be still and learn to listen to your own voice

Creating a culture of individual accountability—through the development of insight—is the key to rebuilding trust. When individuals throughout an organization are hired, recognized, trained, compensated to act ethically, and trusted with authority to make decisions that are connected to their values and who they are, they operate with an elevated level of intensity and commitment where speed and quality are the byproducts and growth is the result.

A culture of trust is the key to building a great business and it must be built from the inside out.

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Where to Look for Role Model Chiefs?

Where can Millennials look for role model leaders in business?

Last week CNBC released yet another list of top business influentials. Their list, the “First 25,” includes many Chiefs judged to have had the most profound impact on business and finance in the last 25 years. The top three positions on the list were held by Steve Jobs, Bill Gates, and the executive team at Google. You might think this list would be a great place to look for role model Chiefs.

Ironically, at the very same time last week, many media outlets reported on a settlement between employees and Apple, Google, and two other Silicon Valley technology firms for the illegal restriction of movement of engineers between the firms. Emails directly linked Jobs and then Google CEO Eric Schmidt to the case. Clearly, the settlement will lessen the publicity that Apple, Google, and the two other firms would have received had the litigation gone to trial. Reports of ethics violations among companies viewed as today’s most admired are not the type of visibility that these companies want, but they can teach us something.

It strikes me how much the media influences our collective view of “good” and “bad” Chiefs and how very little we really know about the people who make headlines. We rely on others for information to build impressions and views about people based on what little we read. At a time when confidence in business to do the right thing is low, particularly on Wall Street, we need to Millennials to help reestablish the trust that has been lost. Business schools are increasing their focus on ethics, but Millennials still need role models to follow.

For example, while I do not know Bill Gates personally, there is no doubt his success at Microsoft and his subsequent philanthropic focus with his foundation cause me to believe he is a true role model. But his life and choices may be difficult to follow for most people.

The question remains: where can Millennials look for role model leaders in business? The answer is closer than you may think.

In my experience, the best role models are people I live and work with on a daily basis. They are the people I encounter who are disciplined, supportive, creative, and insightful. Their values shine through their actions and words. These real Chiefs teach me to act with honesty and integrity, and to work hard to connect what I do to who I am. They teach me to serve others and create fully while always using my values as my best compass. They may not have Chief titles, but they are every bit Chiefs by my definition.

Millennials need not look too far for the right role models. Often, the most influential people in our lives are the ones we truly know and not the ones we think we know based on what we’ve read or what we’ve heard.

Lists are fun, but when it comes down to it, there is so much we don’t know about the people we find in these lists. Given this limitation, we must be thoughtful about whom we choose to emulate. Admiration might best be saved for those we truly know. Perhaps we can turn our focus to the real Chiefs among us common folk. Who are the Chiefs in your life, and when was the last time you let them know it?

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Companies without HR—A Big Mistake

Recently the Wall Street Journal ran an article titled “Is It a Dream or a Drag? Companies without HR.” Authors Lauren Weber and Rachel Feintzeig describe companies that attempted to operate without traditional human resource departments under the assumption that good people management should be everyone’s job. They conclude the idea is a big mistake.

The article highlights the experiences of consulting firm LRN Corp., landscaping company Ruppert Landscape Inc., Outback Steakhouse, and marketing agency Klick Health. For different reasons, after attempting to go HR-less, three of the four highlighted companies added back employees to focus on people issues. I was not surprised.

In my view, a good HR department is a critical asset in any organization because its sole focus is on human capital—the number one issue CEOs face around the world, according to a recent survey released by The Conference Board. An investment in human capital (as opposed to financial capital) often yields the best return for an organization.

I have consistently witnessed million and billion dollar organizations triple their growth rates by focusing on critical HR issues like recruiting, performance management, compensation, recognition, and communication. In one case, by placing much of our attention on these areas, I had the opportunity to work with a team who tripled the growth rate of a $3B organization, growing from 5% to 15% and holding that growth rate for three years. I can tell you first hand, strong HR departments are critical to growth.

The WSJ authors highlight another big reason why eliminating HR departments is a bad idea. Subject matter expert Steve Miranda sums it up by saying, “Whenever you consider eliminating portions of HR you have to think of the financial risk, [and] the strategic risk.” There is no doubt companies increase risk when traditional HR support for employees is cut. Examples cited in the article include exposure to lawsuits, inability to attract employees with needed skill sets, mediating employee disputes, and increasing the cost of effectively handling a workforce.

Companies want to cut costs, and they want their leaders to be more involved with their people—I get that. Both of these opportunities can be addressed while maintaining an HR presence. Tactical HR functions like benefits and payroll administration might very well be outsourced, but strategic HR functions must be retained.

HR can also be held accountable for key leading indicator metrics around recruiting and productivity. The business of business is measured by numbers—a successful HR department will need to be measured. In his book The New Human Capital Strategy, author Bradley Hall describes the award winning metrics based approach we implemented at AT&T in 1999.

Finally, I must admit my own bias. My Dad chose a career in personnel, a precursor to human resources and organizational development (OD).

At the kitchen table growing up I heard stories of how his group provided invaluable services to a mid-size machine tool manufacturer, bridging the needs of management and the workforce. Beyond ensuring a safe environment, Dad’s group enabled success by bringing skills in recruiting, training, performance management, recognition, comp and benefits, and employee development.

Companies without HR are making a mistake. Doubling down on a well-funded and strategic HR department is the way to go. That’s what Dad taught me.

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