Management Craft

WHERE ARE THE GREAT COMPANIES?

Here is a guest post from Jim Champy, author of Outsmart: How to Do What Your Competitors Can't. The title poses a great question. I agree with Champy about the importance of focus and think many of us and our organizations have this tendency to chase shiny objects off our path. Sometimes a diversion is wonderful and puts us on a new path. But many times, diversions will pull us away from our core strengths. Enjoy.

WHERE ARE THE GREAT COMPANIES?

By Jim Champy

For years I have been searching for great companies. What I have found is that there are none. Greatness is an aspiration – a very honorable one. But no company is perfect, even if it performs well year after year.

Greatness, like, many objectives, is in the eye of the beholder. One simple test for greatness is how a company is experienced by its constituents – its customers, its associates, its owners, and business partners. In my most recent research, I looked at over a thousand high-growth companies and found many companies that are very good. They treat all of their constituents well and, in their own unique ways, aspire to greatness.

My search was driven by a desire to find companies that have new business models, delivering new products and services to customers and executing in new ways. I have written about my discoveries in OUTSMART!, my latest book. Although I could find no single formula for what creates a good – or great – company, I did find some shared characteristics.

Ambition: The leadership team of every good company has a great ambition for the company – usually one that addresses an unmet customer need. The ambition is not one of personal greed; it’s about building a company that delivers on its promise and does it with a unique quality. My experience over the years is that it takes a great ambition to create even a good company. I was inspired in my research by a company called Minute Clinic, whose ambition is to change how healthcare is delivered, for the benefit of everyone involved in the healthcare system.

Customer: Every good company begins by meeting a customer need. That need is often deeply understood by the company’s founder because they, themselves, experienced the need – and saw how that need was not being well met. Sometimes the founder hands off the leadership of the company to someone else who operationalizes the idea. But that wasn’t the case in the example of Sonicbids, a company that saw the unmet needs of thousands of independent musicians and performers and whose founder has led the company to a unique position in the music business. This music business for independent performers is a 13 billion dollar a year market, that no one saw or had the appetite to organize until Sonic bids came along.

Focus: Good companies stay focused on what they know and can do well. When companies search for new ideas, they often drift into unknown territory and get in trouble. Good companies just keep growing and expanding into familiar territory. Shutterfly is a wonderful example of a company that’s growing, but it grows by expanding within the social expressions business, helping communities of people share photographs in hundreds of ways. Niches can be very large markets.

Execution: Satisfying a customer requires relentless attention to execution. Building a company’s capability to deliver makes the difference between turning a great idea into a business or failure. But execution is not just about delivering a product. It’s also about service. Over the years, I have observed that technology companies are particularly bad at recognizing and responding to the service needs of their customers. Counter intuitively, high-tech requires a lot of high-touch. Partsearch is a company that knows what it’s doing with customer service, helping customers find what they need in an ocean of millions of parts and accessories for consumer electronic products. Partsearch has tamed chaos in its industry.   

Inspiration: Smart companies engage all of their associates in building the business, from idea creation though delivery. Ideas don’t just come tops-down; they also come bottoms-up and from every other direction. Everyone in the company feels that they own a piece of the action and are accountable for how the company performs. The inspiration for a company starts at the top, but good leadership drives that inspiration deep into the company by engaging people broadly in decision-making. People are more than mechanical parts of the enterprise, and the more they are allowed to see customers, the better their business sensibilities.

These are some of the behaviors that I have found in the good companies I have studied. My ultimate test of the quality of a company is whether I would like to work there. The good news: I see many high growth companies where I would work. They are smart companies, in multiple industries, that are operating quite brilliantly.

Author Bio
Jim Champy is one of the leading thinkers in business. His first book, Reengineering the Corporation: A Manifesto for Business Revolution, helped transform the corporate world. His global best sellers also include X-Engineering The Corporation: Reinventing Your Business in the Digital Age; Reengineering Management; and The Arc of Ambition. He is the Chairman of Perot Systems' consulting practice, and the company's head of strategy. For more information, please visit www.jimchampy.com

Leadership - Art or Science?

Check out this post from Slow Leadership called, Don't Be Fooled, Leadership is NOT a Science. As the title suggests, Adrian believes that leadership is an art. I agree. I love this line:

Leadership is an art, not a science. It depends mostly on sensitivity to circumstances, courage to face reality and a continual willingness to do whatever it takes to bring others along.

Ah, yes, sensitivity to conditions - one of the elements of chaos and certainly a good thing to think about when discussing leadership. How do we interview for the ability to be sensitive to circumstances? There's a nice challenge. This post draws heavily on the notion of complex systems (which human systems are) and chaos theory and it is a good read. Check it out.

Shrink Not – Adjust the sail and seek The New Gold Standard of Leadership

Here is a guest post from Joseph Michelli, author of The New Gold Standard. If there is any company that I would take service advice from, it is the Ritz Carlton. I do have one beef with the Ritz - and it is a bad trend at many of the upscale hotels - which is their high prices for internet connections and not having wifi in every property (although this may have changed). To me, wifi is like bed sheets, it ought to be standard. Other than this, the Ritz is tops. I love their slogan: Ladies and gentlemen serving ladies and gentlemen. They were great to me when I was on my motorcycle tour and I stayed at the Ritz in Atlanta (much more modest hotels for the rest of the trip). Figuring out how to park and secure a motorcycle in the middle of a city is a challenge and the bell staff at the Ritz were great.

Shrink Not – Adjust the sail and seek The New Gold Standard of Leadership

By Joseph A. Michelli, author of The New Gold Standard

Soaring gas prices and the US credit crunch have many business owners scurrying to reduce costs and “do more with less.”  But this natural and reflexive approach to economic uncertainty is often the worst path a business leader can take.   In fact, while researching my recently released book The New Gold Standard: 5 Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company, Ed Staros, a founder of the modern-day Ritz-Carlton Hotel Company noted that during difficult economic times in the 1980’s many hotel chains were cutting back on flower arrangements in the lobby and not placing mouthwash in guest rooms.  Ed shared. “We always believed that economic challenges didn’t mean that people didn’t need or want mouthwash.  It meant we had to raise the standard in a quality efficient way.”  So, how do business leaders decide when to pull-back products or service versus expanding them, particularly when business begins to slow?  For example, many marketers suggest that the best time to advertise is in a tight market, namely because fewer people are doing so (allowing you to position your product with less clutter) and because it is the time when customers need most to be reminded that you are still there.

While cost cutting may be inevitable in tighter economic cycles, I gained key insights during my conversations with the leadership at The Ritz-Carlton Hotel Company about how to avoid a scarcity mentality in challenging times:

1) When consumers face economic challenges they often place a greater emphasis on value.   While many customers will “pinch pennies” and “clip coupons” to address financial hardships, they will still look for opportunities to “treat” themselves.  When consumers do spend money freely they will want to experience true quality and not a watered-down or corporately scaled-back version of quality.

2) Focused excellence prevails.  If cutbacks are necessary, companies can and should reallocate resources toward their core areas of excellence.  To be “excellent” means resisting the urge to overreach into areas where your products or service will be mediocre.  Doing a few things expertly beats doing many things adequately.

3) Inspire staff to focus on purpose and outcomes, not fulfillment and procedures.  I have long believed that all business is personal.  This is particularly clear in the world of luxury hotels and resorts.  While most hotel companies that compete for this market segment have exquisitely clean and well-appointed facilities, the primary driver for guest loyalty emerges from the personal attention and caring of staff.  From the onset of their employee selection process, leadership at Ritz-Carlton looks for underlying talent in service characteristics.   They then train and certify the skills necessary for the new hires to do their jobs while constantly linking job function to the overarching purpose of the business - namely to provide for “the genuine care and comfort” of their guest.

4) Empowering the front-line saves money.  While many business leaders talk about their empowered workforce, few put money behind the hype.  At Ritz-Carlton, staff members (referred to as the Ladies and Gentlemen of The Ritz-Carlton) are given the authority to spend up to $2,000 per day per guest, without seeking the approval of their supervisors.  This authority allows front-line workers to immediately resolve service breakdowns for guests or simply engage guests by doing something unexpected that will make the hotel stay memorable.  The cost-saving nature of this seemingly risky level of financial empowerment is derived from the morale and loyalty of employees, the clear cost savings of resolving problems immediately, and the impact that this type of empowered workforce has on customers.  Essentially, empowered employees consistently transform otherwise satisfied customers into fully-engaged brand loyalists that spend more and refer family and friends to the business.

In my book The New Gold Standard, I identify 5 key business principles that have allowed The Ritz-Carlton to continue to be a recognized leader in product quality and service excellence (two time winner of the Malcolm Baldridge award for service excellence).  Rather than contracting or adopting a defensive posture during economic uncertainty, The Ritz-Carlton leadership stays the course with these five principles:

Define and Refine

Empower through Trust

It’s Not About You

Deliver Wow!

Leave a Lasting Footprint

While concepts like empower through trust have been alluded to earlier, concepts such as “define and refine” and “it’s not about you” warrant further exploration.  By clearly “defining” the core components of the company’s values, quality standards, and service tradition, Ritz-Carlton constantly communicates the path by which a guest’s experience can be elevated, how the staff member can purposefully add value and the means by which the company will thrive.  By having every staff member take time every day at every hotel worldwide to  participate in a process called line-up, Ritz-Carlton leadership re-engages staff in a discussion of the overarching mission they all share.  Further, by being attentive to the need to “refine” the brand so that it remains relevant in changing economic times, for evolving customer segments and in diverse international markets, leadership builds on their well-defined culture.

The “It’s not about you” principle reflects the disciplined practice of listening to staff, customers, vendors and all stakeholders to constantly assure that business does not principally serve the needs and preferences of leadership.  By adopting a penchant for listening to stated and unstated needs while maintaining a passion for service, great leaders produce businesses that endure.  From the customer’s perspective, these businesses are extensions of themselves and not commodities.

While none of us can control the winds of economic change, taking a few lessons from The Ritz-Carlton Hotel Company can help us adjust our sails to arrive at our desired destination.  I welcome your thoughts about the journey…..

ABOUT THE AUTHOR

Joseph A. Michelli, Ph.D., is an internationally sought-after speaker and business consultant whose clients include Bridgestone Firestone, Nokia, The Hartford Insurance Group, UCLA Health System, and USMC.   Michelli has vast media experience, including television programs such as “The Glenn Beck Show” and CNBC’s “On the Money,” and has conducted hundreds of radio and print interviews.

When to lead.

We spend a lot of book time and class time and blog time and conference time discussing what leadership is. I think we should also spend time - much more time than we are - to discussing WHEN to lead.

Leadership ought to change with the situation. In other words, at each meeting, each topic at each meeting, and each conversation, different people can and should lead.

Many people err on the side of asserting leadership TOO much. This leads to dependancy and does not develop the capacity of the organizational to lead when needed (very important, because we are NOT there all the time or in all places - leadership needs to happen without the manager around).

Other people err on the side of letting more assertive people lead. This leads to an unlearning of our abilities and a disconnection from our work.

And some people don't know how to follow. We all need to follow most of the time. Are you a good follower? What does it mean to follow? You are NOT following if you:

• Let someone else "run" the meeting but constantly chime in with your opinions and make all the decisions.
• Are using the word empowerment to describe what's happening. When we empower, we are still the one "in power."
• Verbally pat someone on the head afterward and tell him or her what a great job he or she did leading. Followers don't patronize people, they just follow. The best reinforcement you can give someone is to follow.

Do you know how to follow?

Why worry - Execute!

I love this post by online pal Raj Setty called Stop worrying about your idea and start focusing on execution. His diagram is great so check it out. As I type this, I can't get the Mark Knopfler song out of my head called, Why worry?

Why worry, there should be laughter after pain
There should be sunshine after rain
These things have always been the same
So why worry now

Management Craft - One of the Best Leadership Blogs?

I am pleased as a chocoholic at the Willy Wonka factory to announce that my little blog, Management Craft, has been named a finalist for the 2008 Best of Leadership Blog competition hosted by Kevin Eikenberry at the Remarkable Learning blog.

He and his readers have narrowed the field of blogs down to 10. Here is the list:

Management Craft: Lisa Haneberg
Leading Blog: Michael McKinney
All Things Workplace: Steve Roesler
Leadership Made Simple: Ed Oakley
Lead Quietly: Don Frederiksen
Extreme Leadership: Steve Farber
Slow Leadership: Carmine Coyote, Peter Vajda, John Fletcher
Tom Peters: Tom Peters
Leadership Challenge: Various Authors
Personal Leadership Insight: Rhett Laubach

I am not a competitive person.... Heck, I am pretty competitive and I would love your vote. This is a great list of bloggers, but I have noticed that I am the only biker chick among the group (that ought to count for something, right?).

Cast your vote for Management Craft here.

Thanks to Kevin and his team for doing the work to bring together leadership bloggers and sponsor this effort.

Below is a reprint of the most popular post about leadership I have done on this blog. It is called Leadership is Just One Thing and it continues to get hits every day after three years (I posted this on 2/12/05).

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Leadership is Just One Thing

 

About a week ago, I offered my perspective on the differences between Leadership and Management. You can read this post here. I don’t often write about leadership, but I have been thinking about how I would articulate leadership.

When we say someone is a great leader, we often are saying he or she is a great leader, manager, and coach. When I peel away the management and coaching elements, I see what is pure leadership.

Leadership is just one thing.

Leadership is like the horseradish in the sauce I make for raw oysters.
It’s like the wasabi in my sushi.
It’s the lime leaves in my Panang curry.
It’s the Bombay in my martini.

It’s something special that makes a big difference. So what’s the one thing?

When we demonstrate leadership, we exude a proactive thrust. It’s about taking the initiative to makes things better.

The one thing is proactivity.

That’s not precisely it. There’s also a tinge of charisma (even introverted charisma) to the proactivity of great leadership.

So the one thing is proactivity with a tinge of charisma.

That’s still not quite right. Great leadership feels compelling - we are moved in some away.

So the one thing is proactivity with a tinge of charisma that feels compelling.

It’s getting there, but something is still missing. When we lead we are serving others. There’s an altruistic and service oriented purpose behind leadership.

So the one thing is proactivity with a tinge of charisma that feels compelling and is at the service of others.

This is starting to feel right but there’s a bit more in there. A demonstration of leadership is also an acknowledgment of ownership and accountability. When we are leaders, we are owners of outcomes.

So the one thing is proactivity with a tinge of charisma that feels compelling, is at the service of others, and that demonstrates ownership of results.

Real close now, but still missing something. Leadership answers just the right call. When we lead, we understand what’s needed and what will make the greatest difference.

So the one thing is proactivity with a tinge of charisma that feels compelling, is at the service of others, demonstrates ownership of results, and is targeted to provide the greatest benefit.

I think that’s it, but there is just one more thing missing. Those who follow us willingly determine when we are demonstrating leadership. Our best efforts will be in vain if we have not established trusting and positive relationships. We can be leaders when we have earned people’s trust.

So the one thing is proactivity with a tinge of charisma that feels compelling, is at the service of others, demonstrates ownership of results, targeted to provide the greatest benefit, and that is delivered by someone we trust.

This really is just one thing. Like a nine-layer dip - it’s complex, but just one flavor. Like a fine wine, there’s a lot going on, but one overwhelming impression.

Leadership is the special energy we put to our work that makes a powerful difference. Leadership can be applied to every aspect of work. Many people who fail to demonstrate leadership don’t have their hearts in it. Leadership requires much more than being smart and in charge.

Anyone can lead if they do just this one thing.

Fireside Chat with HL Arledge - Perpetual Teams

How can you build strong teams that do great work together?  Check out this podcast!

During this 22 minute podcast, I chat with Decade Software Development Manager HL Arledge about the Perpetual Teams concept for improving team performance. Before HL's team started down the perpetual teams path, 65% of their defects had been open for two years. Today, they strive to allow no defects. Every 30 days, they commit to correcting all know defects immediately. As a result, their open defects average at a fraction of 1%. Between 2002 and 2004, they had delivered 3 product units. Between 2004 and 2008, they delivered more than 80. And this doesn't just work for software development teams.

Click here to read the guest post HL did on Management Craft called, Effortless Perfection. Check out HL's podcast site here.

You can listen to my podcast with the HL Arledge by clicking here:

You can also download an MP3 version of the podcast here.

And just a reminder.....

Here is the Podcast Feed for the entire Fireside Chat podcast series:

To see the complete list of podcasts in this series, select the Podcasts and Webcasts category on this blog or see the list on my main website here.

You can also find this series on iTunes (and several other podcast sites), just search under my last name for Fireside Chat.

How to Hire a Manager - A Time Tested Recipe

Ingredients:

Courage
Independence
Leadership
Followership
Love of Management
Takes the Initiative to Make Things Better
Honey (AKA Relationship Builder)
Self-Aware
Humble
Confident

Preparation: Evaluate the resume and application. Prepare questions about why previous career moves were made as this will tell you a lot about the maturity and motivations of the candidate.

Mix: Get the candidate talking. Are you interested in what he or she is saying or is he/she just dribbling on about meaningless stuff? Dribblers tend to do this after becoming employed, too. Does he/she get what being a manager is all about? XX number of years experience managing people does not make one qualified to manage - or an excellent manager.

For each previous position, determine whether he/she improved the business, and in what ways. Find out how this person made the management team stronger and better. Determine whether he/she left destruction (real or human relationships) in his or her wake. This is the most important thing to determine. You want to hire a manager who will improve your business, so you need to know how/whether he/she improved previous businesses.

Test for fit within the culture. This is a valid job-related line of inquiry. Watch for whether the candidate seems connected to the organization's culture and mission and look for chemistry with the hiring manager. You can determine fit by observing him or her and by noticing your comfort level with this person. Do you want him or her around?

Do not rush this recipe. Sometimes it takes a short period of time, an hour, to bake up the right manager. Sometimes, you need to spend several hours. You can add more ingredients to your selection process, but do not need to.

Serves: The entire organization.

Check out this Webinar!

My pal, Wayne Turmel (the Cranky Middle Manager) is hosting a webinar called The Freedom to Manage: Guerrilla Managing Remote Teams on June 26th, 11am Eastern time. Check out the details here and plan to attend - it will surely be a good one! Here's a description from the post:

Are you tired of waiting for approval from the folks upstairs for budget to manage your remote team the way you want to manage it? The nice lady from HR won’t approve your training request? We’re going to look at 4 ways managers of remote teams can take control of things and help their team work better at little or not cost.

Why Managers Fail

I have come to the belief that so many management challenges can be conquered if we chill out and be flexible. I am not saying we should not be strong. But I have noticed that managers who do not succeed are often taken down by their own interpersonal rigidity.

Management, by it's very nature, is a people-centric job. People, by their nature, do not want to be bullied or belittled.

So why is it that we can get so stuck in our ways?

Are we defining success as being right versus enabling people to do their best work together?

I have never - really never - had to let go a manager because he or she did not have the technical skills needed to do the job.

I have never let go a manager because he or she failed to be obnoxious enough.

I have never let go a manager because he or she was a slacker.

The top Five Reasons Managers Lose Their Jobs:
#1 - Fail to build positive and trusting relationships.
#2 - People don't like working for him or her (micromanagement the #1 complaint).
#3 - He or she does not get things - the right things - done.
#4 - Is uncoachable. We try to help but they don't take help.
#5 - Is full of bull - does not have the courage to be honest about what was going well and where things were not going well.

And yet, in interviews, I still have managers who will tell me how proud they are to be micromanagers. I still have managers who tell me that their analytical ability is most important (always wrong). I still have people who think it is OK that they end up cleaning house wherever they go (sure, some assignments call for personnel changes, but if it happens again and again, I look at the manager as the cause).

I had a wake-up call several years back. I was told that I was not a good team member. This feedback was a gift because it enabled me to get off my imaginary high horse and get on the bus with all the other smart, hardworking people.

An aside:
Have you noticed fads in interviewing? Recently, I have noticed that everyone I am talking to is emphasizing how collaborative they are. But when I ask what that means, the answers are often shallow remnants of what collaboration really is.  If you tell someone you are collaborative, be ready to explain this, because there is a good chance the interviewer is hearing it again and again.

Hi, my management style is collaborative.

Yeah, right, if we had as much collaboration going on as people tell me they do, we might have a shot at world peace and the end of hunger.