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Category: Leadership

the realities and joys of being in leadership and management roles

Photo Credit: "Andy Grove" (CC BY 2.0) by jurvetson
Thoughts on KPIs from High Output Management

Thoughts on KPIs from High Output Management

I am a strong advocate for the power of key performance indicators (KPIs).  These indicators help guide and focus departments, act as leverage when requesting resources, and provide insight when diagnosing trends before they become significant problems.  They apply as much to a personal level of accountability as they do for a department or company.  I am re-reading Andy Grove’s book, High Output Management, and he has an excellent chapter covering KPI concepts.

In chapter 2, there are many pearls of wisdom for managing with the power of KPIs.  Mr. Grove’s thinking about this area has influenced me greatly over the years.  I do not agree with all his positions, but I am significantly aligned with his methods and have tweaked some of his concepts to meet my needs.  Take about six hours of your life and sit down with this book and a notepad.  His book is a quick read and worth every minute of your time.

Personal Key Takeaways from High Output Management by Andy Grove

Performance indicators provide specific focus points for people and elucidate elements of the highest value operations.  We are awash in information overload, and just because something is trackable does not mean it should.  A good performance indicator should focus on supporting organizational goals.  This may be done from a preventative position such as monitoring equipment performance to detect quality issues before a system failure occurs or maintaining expected levels of performance.  Andy Grove reminds us that indicators draw our attention, so we must be careful in our selection process, so we do not become myopically focused or blinded to other business factors.  He advises that indicators should be paired together to help prevent too narrowly focusing our attention.  This is an outstanding idea and naturally flows from using performance indicators to paint a story of operations.  Additionally, he goes on to discuss the concepts of leverage around the highest steps in the production cycle. This is an area that is simple to think about but often forgotten. The first letter of KPI is “Key.” Leaderships’ attention to the highest value elements of production is import and KPIs help keep attention where it belongs.

Mr. Grove advocates for the measurement of outputs as a more efficient indicator because results are what matters the most.  I differ here as I feel that both activity and production are too closely related in many industries and should be tracked as a pair.  For example, sales calls to the right customer targets are strongly correlated with sales performance.  Furthermore, salespeople activity should be monitored as a leading indicator of sales, potential diagnostic of marketing messaging, evaluation of sales training, and as a diagnostic for industry access trends for the customer base.  Again, we need to look back at his warning about focus and attention.  Managers need to pay attention to the right things.  What we track will become the focus of the team so a balance must be made to ensure that people do not go through the motions to make the KPIs look good while the underlying performance begins to falter.

Key performance indicators are hugely beneficial when combined with actions.  This is a straightforward concept but not often followed.  Mr. Grove cautions that performance indicators are useless if we are unwilling to take action based on the indicator’s signal.  If we are resistant to do what is necessary to keep our KPIs within acceptable ranges, then we either have the wrong KPIs, or we need to alter our management practice. It takes great fortitude to make changes when things look like they are going well on the surface, but the KPIs are beginning to tell us a different story.

Adjusting during the good times is often more challenging than making adjustments during the hard times.

If you have not guessed, I have great respect for Andy Grove.  He is one of the leaders I have admired for years, and I feel that his legacy will continue to shape management thinking and the technology that he helped bring forward.

Photo Credit: "Congressional Simulation Exercise" (CC BY 2.0) by West Point - The U.S. Military Academy
Engage in Small Talk to Reach an Easier Agreement

Engage in Small Talk to Reach an Easier Agreement

It is a common practice to build rapport before entering into a deeper conversation (Coupland, 2003). Often referred to as “small talk,” it is an opportunity for the parties to get to know each other on a personal level before getting down to a substantive discussion.  It seems that many people engage in this practice automatically as a cultural norm and to get over the initial anxiety of beginning a new conversation.

In a negotiation or other business dialogue, it is a highly advisable practice to begin with some small talk.  It helps establish rapport and a personal connection with the individuals at the table.  There is a significant potential upside that can be gained when s deliberate focus is applied to this early stage of a conversation.  People may be more open to seeking an agreement when working with someone they like and trust (Fisher & Ury, 1991).  We should use the time spent in building rapport to create the most amount of confidence and likeability.

People begin developing cognition-based trust and impressions about our character and motives within the first moments of an encounter (as cited in McKnight, Cummings & Chervany, 1998).  The use of small talk can be used to help foster good impressions in dialog participants (Bickmore & Cassell, 2005). Once these first impressions become established, a perception bias forms which is more difficult to alter in the future.

There are several excellent books on how to create great relationships with other people.  One of my favorites is Dale Carnegie’s book How to Win Friends and Influence People.  It is an excellent read and covers how to establish a positive rapport with other people.

A few key tips that have served me well over the years:

  • Be ready for the meeting beyond just the business terms. Understand who you are meeting with and read their LinkedIn profile.  Look for shared commonalities in their background, earlier work experience, and interests.  Furthermore, learn a little about their firm and industry.
  • Understand and adapt to the cultural norms of the other party. Not all cultures appreciate extended periods of direct eye contact or the shaking of hands.
  • Be punctual, courteous to others, and hospitable. For example, offering a beverage is usually advisable and some cultures expect an exchange of gifts of appreciation.  Be aware and sensitive to the cultural norms.
  • Dress appropriately for the occasion and mimic their formality if possible. People generally like to be around others that they see as similar to themselves.  It is important that dress code is followed and proper for the situation and profession.
  • Have a genuine smile and be enthusiastic. Ask them questions about their profession, company, and safe personal interests. Be genuinely interested in what they are sharing. Keep the personal interest dialogue in the safe zone such as outdoor recreational activities, volunteering organizations, and travel.  This is not the time to delve into politics or religion.
  • Keep them talking as much as possible about themselves. People love to talk about themselves, and when you engage in active listening out of genuine interest, it will translate into likeability, trust, and authenticity.

It is imperative that all emotions, interests, and enthusiasm displayed are genuine.  A person cannot fake interest very long before it is picked up by the other party.  A feigned lack of authentic interest may cause personal disengagement, distrust, and possibly resentment.

Being authentic and genuinely interested in other people’s thoughts and experiences builds a foundation for a strong working relationship.  It must be of genuine interest and not trying to manipulate their emotions as that will work against you.  This is not to say that emotional manipulation does not have a role to play in certain types of negotiations.  It does, but that occurs at a later stage and only under particular circumstances.

I have found that it is much easier to reach an agreement with someone you like and trust than someone you dislike or distrust.

Using the small talk time wisely, I have learned about other people and companies.  It has made a meaningful difference in reaching mutually beneficial agreements and forming strong and lasting working relationships with diverse groups of people.

Photo Credit: freeimages.com/Ruth Elkin
Strategies for Increasing Message Retention

Strategies for Increasing Message Retention

I know that it is troublesome that everyone else, “but us,” have such a terrible memory and inability to remember details. However, there is more going on when we dig into this commonplace challenge. Humans develop mental models, cognitive maps, frames, internal scripts, and other processing methods to understand the environment and situational context albeit with frequent misunderstanding and imprecise perceptions (Tversky, 1993). Even with these accuracy challenges, the automatic use of mental shortcuts is a power element of our existence and helped spur our advancement as a species. The realities of humanity’s unconscious mental information processing mechanisms are the significant loss of the content details from the beginning, middle, and end of an interaction (Edvardsson & Sund, 1998, p. 1). Think about that fact before walking into your next meeting. What we say at the start of a meeting is forgotten as much as what is said during the conclusion.

Remember, most people will not remember the details of communications or interactions. People will primarily remember the themes and generalities of a message (Edvardsson & Sund, 1998, pp. 1-2). To combat this natural loss of informational detail, we must address the issue of content’s significance. Research demonstrates the connection between the level of personal significance an individual applies to the content with the ability to recall the details of that content at a later time (Edvardsson & Sund, 1998, pp. 3-4). As we take part in meetings and exchanges with our colleagues, we need to adapt our messages to how people process and keep meaningful information.

If we desire participants to retain more details and for longer, then the content must possess a high level of personal significant to each member (Holbrook, et al., 2005, 749-752). This requires the content sender to understand from each person’s perspective their internal motivators, desires, and goals and how the information will speak to these factors. Challenging, to say the least, as many people may not be aware of their own motivators and goals. We can start by thinking about Maslow’s Hierarchy of Needs. However, if the retention of details is a lower priority, the focus of the content development should be in the formation of an emotionally connected narrative story, so the participants retain the desirable themes, tone, and impressions.

Both approaches require meaningful forethought, planning, and solid execution. The process starts by taking the time to understand the goals and the level of retention required for the given situation. This is not as simple as it sounds, but that is another topic for another day.

Photo Credit: freeimages.com/Steven Goodwin
Sustaining Competitive Advantages with Synergistic Combinations

Sustaining Competitive Advantages with Synergistic Combinations

Long-term survival in today’s market is always questionable as many of the hottest businesses today will eventually fade away. Firms continually reinvent themselves to stay relevant and competitive (Voelpel, Leibold, & Tekie, 2004, pp. 259-276). Today, many of the old-guard technology firms are moving as quickly as they can to the Cloud. Intel and Microsoft announced less than stellar earnings this week and cited their ongoing efforts in moving their focus to the Cloud. These tech behemoths are confronting enormous challenges in their strategy shift. However, these moves are necessary as they pursue new models for sustainable competitive advantage.

The three most common elements cited for enabling sustainable competitive advantages are business strategies, execution excellence, and an engaged corporate culture. A significant portion of organizational performance is attributed to the synergistic effects of these three components (Heskett, 2012, pp. 19-22). However, a consensus does not exist about the most influential of these elements. Historically, the strategy has taken center stage. More recently, the pendulum has moved towards an engaged corporate culture as the critical contributor to long-term organizational performance.

Strategy is not set in stone
A business strategy encompasses the concepts, plans, and decisions that a firm makes for the purpose of achieving various marketplace advantages (Teece, 2010, pp. 172-194). Before an organization embarks on its business strategy development, It is time to go back to the basics. A serious discussion from the Boardroom to the lunchroom needs to happen regarding the firm’s vision, mission, and organizational values. The vision and mission of an organization directly inform the business strategy (Hart, 1992, pp. 327-351). It provides the basic goals, purpose, and fundamental operational parameters. As the mission and values integrate throughout an organization, it becomes the cornerstone of the corporate culture and tightly interwoven with each other.

A strategy exists in every business, whether it is overtly planned or organically derived. Having a brilliant strategy does not guarantee a competitive advantage or market acceptance. However, the lack of a well-designed and pressure tested business strategy often dooms the business right from the start.

Many of the strategies are formulated during the earliest stages of the organization. Business strategy is not often changed, but then again, it is not a permanent fixture. As businesses and markets mature, the strategy needs to be refined and updated. This process allows organizations to refocus their efforts on remaining competitive in the marketplace. Intel’s comments this week and the shifts saw in the last half of 2015 for both HP and IBM is solid examples of these businesses changing in response to the evolving competitive landscape. They understand the mantra of adapt or die.

Execution does not mean…
One of the reasons that strategies fail arises from breakdowns in execution. This is common sense, but our internal biases often lead people down the wrong path. The 2015 Harvard Business Review article “Why Strategy Execution Unravels—and What to Do About It” by Donald Sull, Rebecca Homkes, and Charles Sull discusses some the execution myths that frequently lead to failures. This is one of the articles that should be on ever leaders must-read list. I will not bore you with a cheap summarization of their excellent work. Please take 15 minutes and read the article. It will change the way you think about execution.

Organizational Culture
An organization’s culture is not static. It evolves in response to the business environment and leadership actions. Additionally, research has shown a positive relationship between long-term business performances and advantageous cultural attributes (Marcoulides & Heck, 1993). When the organization’s culture aligns well with its strategy and execution, the factors that lead to the formation of internal barriers, confusion, and resistance are reduced. A healthy culture with engaged employees experiences higher levels of productivity and greater resiliency when faced with adversity (Damij, Levnajić, Rejec Skrt, & Suklan, 2015). By combining realistic expectations, proper resourcing, and a strong corporate culture, business strategy has the highest chances of being executed successfully and delivering on its goals.

The Answer is the Synergistic Combination of the Three Elements
Sustainable competitive advantage is the amalgamation of strategy, execution, and culture. When these elements are brought together successfully, organizational performance abounds. I am not sure a single central contributor exists for fostering the creation of a sustainable competitive advantage. If one element of the triad is removed, the structure will not stand. Only by combining all three elements do we build the business, foster innovation, and enable the organizational resiliency.