Leadership

Soundness, profitability, or growth. Pick any two.

In everything there is a choice and in everything there is a tradeoff. There is an old adage in bicycling that highlights the choice/tradeoff decision: “Light, strong, or cheap. Pick any two.” When buying parts you can have them light and strong (but it’ll be expensive), strong and cheap (but it’ll be heavy), or light and cheap (but it’ll be weak). It’s up to the individual to decide what’s most important to them.

The same is true in business, even though it goes largely unrecognized. We can just as easily say: “Soundness, profitability, or growth. Pick any two.” We can be stable an profitable (though growth will be slow), profitable and fast growing (at the cost of soundness), or sound and growing (but won’t have much left over as profit). The challenge is, that because we don’t recognize this tradeoff, we try to create a business that is stable, has great profits, and is quickly expanding. Trying to maximize all three at once is impossible – at best one (or more) of the three will suffer, but be hidden. For example, the business may be highly profitable and expanding nicely and appear stable, until that first bump in the market highlights just how overleveraged the company is. At worst, the business is neither sound, nor profitable, nor able to grow.

Correct me if I’m off base here, but it seems that Wall Street rewards maximum profitability and growth, generally at the expense of soundness. Yet, the truly enduring companies (whether we’re talking about a sole propritership or multinational giant) – the ones that survive the cycles of recession – are the ones that best understand this tradeoff and keep soundness in the mix, switching focus on profits or growth as their strategy warrants.

In business, as in personal life, it always comes down to opportunity costs. By understanding what you really want, you have a much better handle on the strategy to pursue. As wonderful as it sounds, it’s a recipe for disaster to try and create soundness, profitablity, and growth simultaneously.

That’s the theory anyway. I’d love to hear about examples that poke holes in the theory (I sure can’t think of any).

why are your employees leaving you?

A friend posted this on Facebook recently: “People don’t leave because things are hard. They leave because it’s no longer worth it.”

I tried unsuccessfully for three or four seconds to track down the source, but it seemed to be anonymous. Most of the places I found it were using it as relationship advice, but the first thing I thought of was leadership and employee turnover.

It’s not hard work or tough situations that causes good people to quit. It’s rare that people find easy, simple work satisfying or fulfilling. Think back to the times when you were most satisfied and fulfilled at work. Chances are you had recently earned a hard fought success, pressed hard, stretched your abilities, and just generally kicked booty. Think back to the times when you were just coasting along – how satisfied were you? People don’t leave because work is tough. People leave because the upsides don’t balance the downsides.

They leave because of fire drills, knee jerk reactions, lack of appreciation (or even acknowledgement), thankless efforts, frustrating co-workers, stifling bureaucracy, arbitrary decisions, favoritism, patronizing attitudes, harassment, and even apathy. When people leave because of “more money” it is often not about the money. The extra dollars are nice, but what they’re really saying is, “I don’t get rewarded enough to put up with this job (and/or my manager). This new job looks like it won’t have these headaches and, even if it does, I’ll at least be paid more to deal with it.”

If you’re experiencing unwanted turnover, the question to be asking is: “What would make it worth it for people to stay?”

 

 

how to ruin a business (and an athlete)

In business, learning and development is often viewed as a necessary evil or even an expensive distraction. In sports, on the other hand, athletes spend an enormous amount of time learning, practicing, and improving.

Imagine if you owned a sports team. It would be absolutely ridiculous to hire great talent and then not develop them further. Would you say, “I already spent millions on them, why should I spend more? They need to just get out there and play.”? Would you save money by not allowing them to practice? Would you worry that if you invested heavily in training them, they might someday leave for another team? Would you hire an athlete who wasn’t willing to spend most of their career getting better? Would you tell them that you can’t afford to develop them and they better just do their best?

Absolutely not! It would obviously be insanity. If you took that approach, your team might do well occasionally, but would be crushed in the long run. Luck and residual talent will only get an athlete so far. All great athletes know that the competition is always gaining and if they aren’t continuously improving their game, the competition will soon pass them by.

Are you letting the competition pass you by? How much of a learning (read as: performance improving) environment do you foster with your team? How much do you hold people accountable for continuously developing and improving their results? What about for yourself? Are you a business athlete on autopilot, hoping that what you learned years ago will carry you through? Or are you forever looking for ways to step up your game?

when training doesn’t make sense

I am passionate about personal and professional improvement, firmly believe in investing in employees, yet recognize that training doesn’t always make sense. Here are a few of those situations:

  • Your company is hyper-focused on quarterly results. Training is a long term proposition. If you only look at immediate performance, investing in tomorrow is counterproductive. Unless you think you’re going to want the business to get better a couple of quarters from now, training is pointless.
  • Your company is more focused on saving money than making money. Training is expensive and an easy way to save costs. You can also save a few more bucks if you fire your maintenance staff and never upgrade your equipment. After all, the corresponding decline in individual and organizational performance will take time to show up. Two years from now, when you are in steady decline and your competition blows past you, you can blame the economy. If you try hard enough, you can save yourself broke.
  • You like mediocrity. Not everyone wants to improve their results. I get that.
  • You cannot handle the idea that some of your best performers will leave. Yep, if you really invest in your people, some of them will be lured away. If you want to keep the completion from eyeing your employees, be sure to hire underperformers and keep ‘em stupid.
  • You are so behind because of perpetual fire drills that you can’t keep up with today, let alone think about tomorrow. Don’t worry, once the company goes under, you’ll have plenty of free time.
  • Your employees hate training and complain loudly. Don’t bother wasting training dollars on them. They won’t learn anyway. Good job on selecting people who will save you money by refusing to improve. Maybe you can hire some more just like them – then you’ll really be profitable.
  • You can’t afford high performers. High performers cost more to hire and cost more to keep. They tend to want to get better and be attracted to organizations that will invest in them.

So you see, training and development really only makes sense if you want individuals, teams, and an organization that performs well and improves over time. If you don’t want that, you needn’t bother with training.

Great Leaders Use What They Have to Their Advantage

In a perfect world every one of our employees would be great employees. They’d be committed, motivated, super skilled, etc., blah, blah, blah. In the real world, they are not. Every person, even the best of employees, has their strengths and weaknesses that they bring to the job.

Poor managers gripe about the weaknesses; great managers figure out how to realistically utilize each person in a way that plays to their strengths and minimizes their weakness. Everyone wants to be successful and a few are fortunate enough to have a leader that enables them to be their best.

One leader I know was working as an electrician, doing contract work for the maintenance department of a small manufacturing plant. The maintenance manager had an employee – Brian – that appeared to be all weakness. He was kind of spacy, a bit of a burnout, and consistently did mediocre work. Brian was one of those employees who just barely good enough to keep on the team, but was an ongoing headache. The maintenance manager took the opportunity to get Brian out of his hair for a while by assigning him to help the contract electrician.

Most in the electrician’s position would have been very frustrated to be “gifted” a problem employee, but he wasn’t. He took the approach of “I have him, so how can I use him to my advantage?” He looked (hard) for the strengths and discovered that Brian used to do electrical work on airplanes was extremely detail oriented and very good at following directions. In fact, given very clear instructions he was able to do meticulous, high quality work. (You see the problem, right? He was extremely literal and did what he was told. His manager did a poor job of giving well thought out directions so he was unable to do a good job. Garbage in, garbage out.)

Once the maintenance manager saw the quality of work that this problem employee was capable of, given proper guidance, he suddenly needed the employee and couldn’t spare him any longer.

When was the last time you sat down with your employees and asked them what they thought their greatest skills were, which tasks they enjoy the most, what skills they would like to use more on the job, or what skills they would like to develop? Who was their best boss or mentor and what did that person do different from all their other bosses?

The World’s Shortest Lesson on Being a Great Manager

Being a manager is a tough, tough job and there are many things a manager needs to be able to do. But, if you want to put yourself above 90% of the managers out there, focus on developing your skills in four key areas:

  1. Selecting people who are a great match for the job and the company. You are responsible for their results and if all goes well they will be with the company for years to come. Plan your effort accordingly.
  2. Giving your people a clear vision for their role and clear understanding of your performance expectations.
  3. Investing time, energy, and resources into developing your people so that they can perform at the level expected. This includes coaching, training, advising, and giving feedback.
  4. Holding your people accountable for delivering results.

Enough said.

Leadership Advice From My Dad (Happy Father’s Day)

My dad mentioned something to me one day when we were talking about business. He said, “The best managers treat their people as though they need their people more than their people need them.” Of course, the flip side of that is the epitome of poor management: treating their employees as though they are unnecessary and unwanted.

Over time, managers get the team they deserve. Great managers nurture, develop, and create great teams. Poor managers end up with poor teams. Want to do a quick assessment of the quality of a manager? Look at the quality of their team.

I remember a manager who was very resistant to attending leadership training (remember, kids: those who need training the most want it the least and those who need it the least want it the most). He didn’t see why he should have treat his employees with respect, or provide clear instruction and follow up, or try to develop them, etc. He spent the class ranting about all the idiots and slackers he had working for him.

I don’t know his team and never observed his leadership in action, but I can imagine what happened. If he was as abusive, hypercritical, and condescending towards his team in person as he was in the class then any employee with talent, options, and self-esteem would have transferred out of his department or quit the organization. So who’s left? Those without options. Those without talent or work ethic. Those without enough belief in themselves to get another job. The more he abuses them the worse the team becomes and the worse the team becomes the more he feels he has to abuse them to get any work done. A vicious downward spiral. I’m confident that he was surrounded by idiots and slackers but only because he had driven everyone else away.

This doesn’t mean that every employee is a great employee. But the best managers are able to take what they have and bring out their best. They can take shortcomings into account and look for ways to develop and bring out the best that is there.

The easiest way to do that is to approach it from the mindset that you need your employees far more than your employees need you.

The #1 Secret of Great Leadership

Pay attention leaders. I’m about to share the #1 Secret of Great Leadership. Countless books and articles have been written about leadership secrets and here I’m about to share it with you. I’m not even going to charge you or make you sit through a seminar or anything. Even though it’s free, it’s still a Truth that could determine the trajectory of your leadership learning curve and even your career. You might want to write this down.

Ready? The #1 secret of great leadership is – [drumroll, please] – there is no secret.  No, this isn’t the answer to some sort of Zen riddle, just a common sense truth. Leadership is always on display 100% of the time (even and especially when we might wish our own leadership wasn’t). We’ve all seen and experienced the good and bad, the miserable and the inspiring. We all know what makes for a good leader and what we’d never wish on another human being.

I’ve trained business leaders in the US, Canada, Europe, and Australia and one part of several different programs was to have people list the traits of the best leader they ever had and the traits of the worst leader. You know what? Across hundreds of leaders, across blue and white collar jobs, across industries, across cultures and countries, the answers were remarkably similar.

Notice, though, that the question isn’t a theoretical, “What are the qualities of great leadership?” but a very practical, “What were the traits and characteristics of your best leader – what really set them apart?” This isn’t an abstract question; it’s a question about your personal experience. In fact, I’m confident that you could answer that question right now and it would be very comparable to what everyone else says.

You don’t need another book or conference or weekend workshop to learn how to be an effective leader. Get a small group of people, individually answer the questions about your best and worst leader, then compare and compile lists. Take the list of the worst traits and DON’T do those anymore. Take the list of best traits and START doing them immediately.

Class dismissed.