A Good Economy Hides a Multitude of Sins

They used to say that “a good economy would hide a multitude of sins” in how a business was operated. It was not hard to be profitable years ago when the economy flourished. The business didn’t even have to run very efficiently to make money. All that being said, the economy is still hiding some sins. I would submit that “a poor economy also hides a multitude of sins”. The economy is hiding sins in how organizations are managing its employees. With the job market being tight, and candidates being plentiful, management is no longer worrying about sins in the areas of employee relations. It could also be said that a bad economy is when management shows its true colors.

In these economic times, organizations have been focused on reducing expenses, including the downsizing of the workforce. Many have downsized themselves dramatically, leaving employees with large workloads and low morale. Human capital initiatives have been eliminated as HR budgets and programs have been very low on the list of priorities. The list of eliminated initiatives include employee engagement, talent and leadership development, and succession planning. Of course, eliminating these programs from the budget also harms organizational effectiveness and productivity.

For the last few years, employers and corporations have been clearly in the driver’s seat. Regardless of how companies are treating their employees, turnover has remained relatively low. It could be said that some organizations have used the weak economy as a retention strategy. Organizations are comfortable that their employees are easy to retain or replace, and often corporate management has set aside employee development and relations as a priority. Sometimes management is so focused on short term profits, as well as their own jobs, that the culture turns toxic. Despite all of this, the downturn has kept turnover rates somewhat low.

But the game may be changing for management. The prevailing wisdom is that “turnover intent” is quite high, meaning that there are many employees prepared to leave their employers as soon as the economy recovers somewhat. As a matter of fact, human resources consultants like Deloitte Consulting and Mercer LLC report in their surveys that many employees are prepared to leave their organizations even now. Deloitte reports that overall, 65% of employees are considering leaving their companies, with Generation X leading the way at 72%. The Baby Boomers listed lack of trust in leadership as their top-ranked reason to leave their employer. Mercer reports that only half of the employees they surveyed say that they have been treated fairly by their employer, and only 29% of employees believe that their organization is well managed.

So much for keeping employees satisfied, let alone employee engagement. Many employees are feeling disengaged and disconnected from their organization. They don’t believe that their employer has their best interests in mind. Once the economy begins to recover, the expectation is that the job market will be hit by a “resume tsunami” unlike anything that’s been seen before. Turnover will spike, and organizations will suffer significant losses of talent and intellectual capital. Ironically, at a time when organizations should be benefitting from a recovering economy, their operations will instead by hampered by widespread and the high cost of turnover. With internal operations and service processes in a state of turnover, these organizations will struggle to stay focused on customers. Imagine losing customers to the competition and missing out on market opportunity at a time when the economy is finally recovering.

Are your employees engaged? Or will your talent be part of the exodus?

A Good Economy Hides a Multitude of Sins

Leadership Comes From Personal Power, Not Authority

“Now tell me, what does it mean to be noble? Your title gives you claim to the throne of our country, but men don't follow titles, they follow courage. Now our people know you. Noble, and common, they respect you. And if you would just lead them to freedom, they'd follow you. And so would I.” – Mel Gibson as “William Wallace” in the movie Braveheart.

It was a very powerful moment in the movie. A discussion between Sir Robert the Bruce, the nobleman with titles and authority, and William Wallace, a common man with no title, but who carried enormous personal power. As a result of that personal power, it was the commoner who commanded the allegiance of his countrymen, rather than the nobleman. William Wallace, the farmer, did far more to demonstrate courage and commitment and leadership than did Sir Robert. And so the followers stood behind William Wallace.

There are many examples of this sort of reality everywhere. I’ve observed it many times in corporate America, where the junior manager commanded more respect and trust than did the senior executive. People would rather follow someone they trust rather than someone they didn’t trust, even if they carried a high rank. Someone with rank or title might not actually have the “leadership capital” to actually lead people. Leadership capital is the ongoing scorecard that we keep on each other. We may not think about it consciously, or even acknowledge that the scorecard exists. But regardless, we all keep it on one another. It’s the scorecard that answers the questions: “Is that person trustworthy? How well do I trust them? Do I trust them well enough to follow their lead?” It’s the leadership capital that gives someone an influence that can far exceed the influence from authority.

There are two main elements on the leadership capital scorecard: character and capabilities. These are what we care about when contemplating the individual. Leadership capital is built first by your integrity. It begins with honesty, fairness, and how well your words are supported by your actions. Your actions must be very closely connected to your words. This is true whether on the corporate ladder, the baseball field, or the field of battle. This is what we mean when we refer to “authentic” leadership. After a time, those around you will take notice that you are trustworthy, and they begin to follow your lead. It won’t matter if they report to you, or to someone else. They may not even work for the same company. They might be a friend or business acquaintance. When you speak, they will listen, and they will follow your lead.

Leadership capital is a precious asset, and can be lost very quickly. We all know well enough that trust takes weeks or months to build, but can be lost in a day from a single incident. Once you have that leadership capital, keeping it means always staying the course of integrity, open communication, and commitment to others. When people begin following you, they will expect your support, and rightfully so. They will have an expectation of learning from you, and it’s the leader’s responsibility to come through. Peter Drucker told us “rank does not confer privilege nor power. It imposes responsibility.” All leaders have a responsibility to those that follow them. Leaders have an obligation to motivate and inspire as they lead. They have a responsibility to support, develop and mentor others. Leaders have the responsibility of developing other leaders. I sometimes call it a “psychological contract”, which is both more delicate and at the same time more powerful than a written contract. In the contract, there is a shared mutual commitment in the pursuit of shared goals. The contract silently stipulates that leadership is built around cooperation, rather than coercion.

The finest leaders will never use their authority or rank. They have all the influence they need by virtue of their leadership capital. These leaders will have created a strong team culture with mentalities of trust and cooperation. The team is well motivated, and they are clear on the goals, and committed to the vision. Rank, title, and authority all become irrelevant, because leaders engage others and earn their followers.

Leadership Comes From Personal Power, Not Authority

How to use Personality Profiles to Improve the Recruiting Process

Its no wonder that personality profiles have become a standard assessment tool in the hiring process for many companies. Hiring managers and recruiters know full well that resume screening, interviews and reference checks are not a very reliable or objective means for making hiring decisions. Recent surveys of HR executives show that up to 80% of organizations are now using personality profiles to improve hiring decisions. The same surveys also list performance management and succession planning as top priorities for these organizations. This indicates that the personality profiles are also being used for hiring decisions, and employee development as well.

All that being said, some organizations continue to struggle with hiring, even though they use assessment tools in their hiring decisions. The most likely reason for that is simple: any tool, be it an assessment tool or a hammer, needs to be in the right hands to get the great results. Used improperly, both of these tools can hurt you. The personality profiles are complex tools. And the information they provide are deep and not always easy to interpret. We humans are deep, complex creatures ourselves. To make their tools easier for HR professionals to use, the tool providers have simplified the computer generated reports to improve readability. The down side to simplicity, however, is that simplicity diminishes the depth of information and the power of the tool. Less granular means less detail. This often creates challenges to drawing useful and accurate conclusions that are helpful in the workplace.

The answer is that HR must work with an expert assessments practitioner who has deep experience in the interpretation of the personality profiles, and can effectively impart the valuable takeaways to HR personnel. The practitioner administering the assessments to candidates and employee makes all the difference in the world. They should be certified in the use of the assessment tool, and they should be experienced in imparting insight and value. The practitioner create a reliable profile of the candidate, or an effective action plan for employee development. Some assessments provide many raw scores, some of which may or may not contradict other scores on the same assessment. A certified assessments practitioner will know how to address some of the extraneous information on the computer generated report. In addition, they will be familiar with trends and patterns that indicate certain strengths or blind-spots in the individual. Most importantly, two individuals with very different personality profiles can still both be successful in the same role. The practitioner will help identify these scenarios so that HR does not overlook and miss out on great talent.

There are countless different personal assessment tools available on the market, and they vary significantly in what aspects of the personality they measure and how they measure those. But none of these tools measure every one of the human dimensions necessary to reflect a complete picture of the individual. The reality is that it’s just not possible in a single tool, because we humans are just too complex. In utilizing personality profiles, the goal is usually to “measure” the individual in their entirety. This includes expected behaviors, innate talents, cognitive abilities, decision-making biases, emotional intelligence, motivational drivers, and character. We also need the results to be accurate and reliable. That is a lot to ask from a single tool and a computer generated report. The only way of getting “how” a person behaves, as well as what drives those behaviors, and why they are drivers, is by utilizing more than one tool. The US Department of Labor also recommends a "whole person" approach wherein companies never rely on any single instrument for developmental or hiring decisions.

Personality profiles can be categorized into three separate categories:

1. Analysis of behavioral styles.

Marston’s DISC and Myers-Briggs are two of more popular behavioral assessment tools on the market. The DISC test does more quantifying than the Myers-Briggs test, and has gained in popularity in the last number of years. The DISC test creates a profile of how an individual behaves by reporting quantified behavioral attributes across the four DISC dimensions. This tool to be especially powerful for investigating internal conflicts within teams. Hiring managers will use these results to judge culture fit, but ascertaining culture fit is not as simple as that. Too often this tool is used in the recruiting process as the only profile for candidate assessment, which is not an ideal approach. It’s far more important to measure cognitive skills and talents and motivations than just behaviors. The other challenge is that the results of the behavioral tools can be skewed by the candidate by giving “expected” responses during the assessment process.

2. Analysis of cognitive abilities and talents.

This is one of the most important aspects of the candidate assessment, and is also powerful for employee development as well. These tools are about measuring talent and potential. The best tools will measure how well individuals are evaluating their surroundings, their judgment clarity, and decision-making focus. The result is a strong profile of the person’s communications skills, interpersonal skills, emotional intelligence, work ethic, engagement levels, and leadership potential. These tools are useful for candidate assessment, but even more powerful for talent management and succession planning.

3. Analysis of values and motivational drivers

These tools are invaluable for pre-employment. Some of the best tools are based on the Spranger-Allport work, and they identify and quantify the levels of motivation of an individual across seven motivational dimensions. They provide clarity on where the drive and passion is in an individual, and so it helps ascertain how well a fit someone is for their role and career direction. This is one of the most important assessments to use when trying to ascertain the likelihood for success of any individual in a given role. It is also useful in the midst of the talent management lifecycle to ensure that the individual is on the appropriate career path within your organization.

Respectively these can be referred to as the How, the What, and the Why of employee performance. By measuring each of these domains, one can obtain a very clear and accurate representation of the individual’s behavioral style, as well as a reliable predictor of their fit to a job role and how well they will perform. Best of all, when used in the development/coaching context, these profiles create a strong self-awareness for the employee that facilitates growth and development. But it is very important to note that it is very possible to have two individuals with very different assessment profiles that are both capable of succeeding in the same role. Your assessments practitioner will have the expertise and experience to identify those and ensure great hiring decisions.

How to use Personality Profiles to Improve the Recruiting Process

5 Reasons Why You Need A Really Awesome Recruiting Process

Measuring the quality of your job candidates (and your employees for that matter) is vital for organizational success and competitive advantage. We are no longer in a manufacturing economy, but rather a service/knowledge worker based economy. This means that human capital makes all the difference toward organizational performance and the ability to compete. Successful hiring keeps the working culture healthy and productive, team performance and creativity high, and workplace turnover low. This translates to employee engagement, and there is enough research that shows organizations with high levels of employee engagement perform well in a poor economy. Getting the wrong people, even if they have the right direction, will never result in building a great company. To paraphrase Jim Collins in Good to Great, you have to get the right people on your bus, and the wrong people off your bus. Then you need to ensure that you have the right people in the right seats. Then and only then can you start your bus moving the right direction.

Here are five reasons why a really awesome recruiting process is necessary:
1. Employee salaries represents a significant part of the operating budget for most organizations, usually on the order of 40% to 50%. Given those numbers, its easy to see that there is a lot at stake in hiring only the best talent. It should be a safe assumption that a reasonable return on the salary investment is expected. It should also be a safe assumption that the recruiting process must take proactive measures to minimize the risk of hiring someone unsuitable for the positions that are open.

2. The labor market is flooded with great talent, and also with poor talent. Separating the producers from the pretenders has never been more difficult. Considering the way organizations have leaned out and reduced headcount, there is even less room for error in the hiring process. Those fewer people on the payroll are now dealing with higher management expectations and need to be more productive than ever. That also means that keeping the culture in a good place is that much more difficult. Hiring for culture fit as well as talent is crucial these days.

3. Turnover creates an insidious cost and impact for organizations, and the issue often is not taken as seriously as it should be by employers. Setting aside the recruiting fees, the costs in lost man-hours can be enormous. The lost productivity associated with interviewing and evaluating a replacement for the position, having temporary help to fill in for the position, and disruptions to the operations surrounding the position, is often overlooked. Then there is the training of the new hire, and then waiting for the new hire to come up to speed and become productive. If the role was a customer facing role, it also impacts the customer service operation, including customer service levels and the customer experience. Conceivably, there could also be additional impact from lost customer relationships if it was a key role in customer service. Impact to customer operations is not only visible, but can quickly translate to lost revenue. All in, published research puts the cost of turnover at 35% to 45% of the annual salary for the given position.

4. The consensus is that there is a leadership crisis in corporate America. Senior executives are now acknowledging the weaknesses in their leadership pipelines in research surveys. This is a significant problem as more and more baby-boomers are retired. Identifying leadership potential should begin at the recruiting stage. High potential individuals, upon hiring, should be identified and put into the leadership pipeline. They also need to be designated as people leaders, customer leaders, change leaders, etc. All of this assumes, of course, that the organization indeed has a leadership pipeline that is formally identified, managed and developed.

5. Great hiring practices (as well as delicate firing practices) builds the brand equity. Poor brand equity can drive up the cost of salaries because candidates will prefer to work in an organization with a good reputation for treating its employees well. Also important to note is that reputation influences the customer market as well. The labor market now pays close attention to the reputation and culture of an organization. Social networking and websites like vault.com and glassdoor.com makes this information very accessible to candidates. They now have the ability to learn what the culture and environment are like within an organization before applying for a position. A company like Google Inc., with its powerful brand equity, will be able to attract a higher quality of talent. That talent will be less focused on salary, and possibly settle for less money just to have the opportunity to work at a company like Google.

So all that being said, how can we do better at recruiting? Many organizations have found the answer to an extent. They are using personality profiles as part of their assessment process to make a more objective data-driven hiring decision, rather than a hiring decision based on anecdotal evidence and intuition. Research shows that hiring decisions based on gut-feel carry a high failure rate, resulting in productivity issues, culture challenges, employee disengagement, and eventually turnover. These personality profiles present quantified values and criteria and make for much better predictors for performance and success. As a result, personality profiles reduce the number of unknowns associated with the hiring decision and add a good deal of quality control to the recruiting process.

The bad news is that there are a confusing number of these profiles, and all too often they are used ineffectively, or altogether incorrectly. Later this week, in our next post, we will discuss how to best approach these personality profiles and how to utilize them most effectively to successfully hire top performing talent.

5 Reasons Why You Need A Really Awesome Recruiting Process

Success Begins With Strategic Thinking

Success in any business or profession requires having a clear vision of where you are going, and what your "rules of the road" are. Vision and values is where it all begins. The motivation is having your business or profession "become" something. This is how a business creates long-term sustainable growth, and how a career creates long-term reward and fulfillment.

Strategic thinking means starting from the 100,000 foot level of what your endeavor is to become, and working your way down to the trenches level and identifying individual action steps. One of the most important deliverables of strategic thinking is the business/career plan, and it should answer the question: "what are the priorities and action steps for the next month, quarter, etc?".

Planning out a business/career strategy can be framed into the following steps:

Step 1. Visioning
I am amazed at how often this step is skipped. The result is that many entrepreneurs and professionals will needlessly wander in mediocrity.

An organizational or career vision is a statement of potential, and a statement of direction. A vision statement is a description of what you or your endeavor is to become. Entrepreneurs should ask: "what do I want my company to be known for; and what do we want people to think of when they hear our company name mentioned?". Professionals should ask "What do I want to be known for; how do I want others to remember me?"

Step 2. Strategic Thinking and Planning
The term "strategic thinking" can be defined as the process that determines the future direction of the organization. This is where you give careful thought to what you want and where your passions are. You think about your strengths, and weaknesses, and your opportunities. Where do you have advantage, and how can you exploit that advantage? Very rarely do people actually take the time and energy to do this in a meaningful way. The likelihood for a business plan or career plan to create any success depends on how well and diligently this step is carried out.

Step 3. Documenting the Plan
Writing the business/career plan is the process that actualizes the strategic thinking. During the planning process, your mission is crystallized into specific goal categories. These categories are used to help breakdown goals to identify action steps. In an organization with multiple departments, each will have a mission and business plan which is their contribution to the organization's mission. The progressive achievement of the mission or all of the departmental missions will propel the entire organization toward the realization of its vision.

Step 4. Implementing the Plan
The real key to the success of this process is action. Vision alone does not ensure success. Even the most well conceived plan will not ensure success without action steps and measurement. Without action steps, time frames, and accountability the process is just a mental exercise that does little to create progress, much less success. How many times have you heard of a formal, elaborate business plan sitting on a shelf gathering dust? How about the executive resume that has not been updated for years? Without action, nothing happens, and nothing improves.

Step 5. Review and Continuous Improvement
Be sure that you are measuring your results. Peter Drucker has told us that "you cannot manage what is not measured." Success relies on careful execution and progress needs to be measured and quantified on a regular basis. Success relies on continued learning and improvement of the plan and adjusting the action steps accordingly.

During this step, there will be mistakes and setbacks. But that is not the same as failure! Missteps are an inevitability when innovating and testing new approaches. Challenging the comfort zones and stretching the performance envelope means a little risk, and some lessons learned. History has shown this to be true even for gurus like Warren Buffett and Bill Gates. Turn these setbacks into a positive experience by focusing on the lessons learned and using them going forward. These lessons are a business advantage if you use them that way. Your success will depend on you staying positive and motivated and focused.

Remember: A successful business or career must have a focus on the long term vision. Dwelling on the present, or the next paycheck, or the next quarterly financial statement will only deliver mediocre or unsustainable results. Growth opportunities are difficult to recognize when you lack clarity on your future vision. Planning your vision is not an option. You can take control of your destiny and the destiny of your business, but you must make a conscious decision to assume that control.

Who is in control of YOUR destiny?

Success Begins With Strategic Thinking

Three Things Leaders Do Better Than Anyone

The worlds most successful entrepreneurs and executives use fundamental leadership qualities to achieve success. It’s important to keep in mind, however, that leadership is not about having command and control over people. Successful people focus on having command and control over themselves. By taking a very honest look at their vision and capabilities, successful leaders take more control of their destiny than most of us even think about exercising.

1. Leaders have strong self awareness.

Success is closely tied to an ability to practically and objectively identify their own strengths and weaknesses. They have a strong awareness as it relates to their performance, their passions, and their perspectives. They evaluate themselves in a brutally honest way and with clarity. That clarity allows them to manage their strengths and weaknesses very effectively. They will adjust their goals and approaches to match. They will seek assistance or self improvement in order to achieve success. They know what they can do, what they can’t do, what they should delegate, and when to seek help. Tied into this self awareness is having strong self esteem, which is not the same as ego.

2. Making the most of mistakes.
We all make mistakes. We are all human. However, some of us do more with our mistakes than others. Mistakes are the most important aspect of the life experience. These are the experiences where we glean our most important lessons. Sure, success is more fun, but we do not learn the most important lessons from success. Mistakes are also a strong indicator that we pushed an envelope somewhere, either in a process, or in people. Pushing and moving boundaries are how we create exceptional results, and ultimately success. Leaders use mistakes to learn and grow and motivate.

3. Adaptable and amenable.
Leaders are never emotionally attached to anything. Everything and anything can be changed and turned upside down when the need calls for it. Comfort zones usually don’t last long enough to actually bring comfort. A leader has an open mind and questions everything, including themselves. This is especially true when things are not working as planned or delivering the expected results. This aspect of leadership makes it possible for individuals and organizations to reinvent themselves as needed. Given the pace of change in the world today (socially, politically, economic, etc), reinventing oneself has almost become an essential function. Success is closely tied to being able to quickly respond to the changing realities in the business and market landscapes.

There are other factors and characteristics necessary for success, but I often find these three are among the most common weaknesses in entrepreneurs and business leadership.
How strong are you in these areas?

Three Things Leaders Do Better Than Anyone

Team Building is not Rocket Science

It is amazing what people can accomplish when it doesn't matter who gets the credit.   –Harry S. Truman

Team building is a critical part of organizational success. You would be hard pressed to find anyone that would disagree with this notion. Regardless, it seems that most organizations have yet to figure out what it takes to successfully build great teams. The good news is that it is really not very difficult. The bad news is that it does require a sustained commitment of leadership.

Get Feedback as if they Were Customers: Think of your employees as customers, albeit internal customers. You need to get feedback from them in order to proactively identify issues and disconnects. Employee surveys and feedback are also a great way of encouraging contributions and innovative thinking. Finally, it reinforces the notion that employees are important to the success of the organization.

Relax the Formal Communication: Try to step away from the formal employee-boss interaction to foster a little free speech. Giving employees reassurance that they can speak frankly about issues that might be interfering with success creates opportunity to be proactive. Encouraging open workplace communication will develop healthy and productive work relationships.

Organize Team Building Events: Taking a day trip out for "R and R" can do wonders for breaking through the ice and developing relationships. Some great places to visit are the local Paintball field, or a sports/entertainment complex. Those centers that have the rock-climbing wall are magnificent. End a day of great team building activities with a late lunch. Give out one or two awards at lunch. I have seen this type of endeavor work wonders for a team. The inroads made at these events translate immediately over to the workplace.

The Team’s Success is Everyone’s Success: Make a habit of vocally and publicly appreciating and acknowledging each other’s efforts. Even small celebrations of jobs well done or projects delivered ahead of schedule build powerful relationships and reinforce motivation. Team members are more incented to stay engaged on the vision, and each other.

Successful team building in the workplace translates into success for everyone, including the organization. But remember, it all begins and ends with leadership.
How is your organization building great teams?

Team Building is not Rocket Science