Building Business Value | Corporate Management Strategies

Sharing Your Vision

So you and your leadership team are heading back from your annual leadership retreat.  You've thought deep thoughts, built your plan for next year and are now beginning to wonder about your next steps.  How do you get everyone aligned with this great new vision. Panic and anxiety haven't set in yet, but they're lingering.

How do you create ownership in a situation like this? How do you get buy-in to be more than just a cliché?

A sense of ownership is created when executives are assigned tasks. Tom Morrison, an experienced turnaround executive formerly with Morrison Partners and now with Organic Alliance Inc., uses a leadership concept he calls "share the vision." To make this work, Morrison says your leaders need to have judgment, intuition, and experience, and you must give them the tools and direction necessary to be a part of the action.

Everyone has a specific responsibility, something he needs to do, something about which he needs to be accountable to the board and to other executives. Too often, no clear connection is made between a function that an executive performs and the actual results that action creates. It's necessary to create a "line of sight"-a term Bob Blonchek and I coined in our 1999 book, "Act Like an Owner"-between what leaders do and the value of the enterprise. When executives have responsibilities and clear lines of sight between their actions and the company's direction, you're on your way to aligning the results of your leadership offsite with the direction of the company.

Goodbye panic and anxiety ... hello offsite euphoria.

Five Ways to Build Trust in the Workplace

In their August 10th blog "Trend to Watch: Trust in Business Is Running Out" on HBR Now, Eric Beinhocker & Elizabeth Stephenson discuss the strained relationship between us and the businesses we deal with every day.    They found that "the relationship between business and civil society was showing signs of strain even before the crisis. Since the recession began, there has been a precipitous decline in trust. The Edelman Trust Barometer found that 62% of adults in 20 countries trusted corporations less in December 2008 than they had a year earlier."

But how does that impact the leader of a small or midmarket company?  You are not the bank, broker or insurance company that fed this economic crisis but unfortunately, because you are in business, you're swept up in this potential death spiral of mistrust.

I could not agree more with Beinhocker and Stephenson when they ask "why should this concern strategists? Because a low-trust environment makes everything about doing business more difficult. For an individual company, loss of trust leads to higher transaction costs, lower brand value, and greater difficulty attracting, retaining, and managing talent. Ultimately, it can mean boycotts, negative publicity, and unwanted regulation".

So what can a midmarket leader do to build trust in the place that matters most, their workplace?

Take the word TRUST and create a mnemonic to remind you of just what to do to build a trusting workplace environment.

T stands for TEACH.  Teach everyone in your organization just how things work.  Make it as transparent as possible.  If you want front line leaders making decisions that will make a positive impact on the value of the company, teach them how the place works.

R stands for REWARD.  Make sure your rewards systems are aligned with your corporate values and corporate goals.  I see too many companies rewarding behavior that might have a temporary positive impact on the bottom line, but not create long term value for the company.

U stands for UNCONDITIONAL SUPPORT.  Consider your role as a leader as a position of vulnerability.  Too many midmarket execs feel they have to be perfect and this creates an environment where mistakes are hidden and new ideas are discouraged (they can't be any good if the leader didn't think of them.)  Mistakes should be like tuition.  Get them out in the open and learn from them.  Talk about them and you'll foster an environment of openness and creativity.

S stands for SHARING INFORMATION.  If it's not personal information or the secret to Coke or Pepsi, then get the information out there.  Creating a trusting environment where employees know what they have to do everyday to impact the bottom line means they need to have enough information to make good decisions.

T stands for being TRUSTWORTHY.  As a leader, you'll build trust by making and keeping commitments.  Chances are your emails are being saved and your speeches are being recorded and posted on YouTube so you might as well come clean.  Keep every commitment you've ever made and trust will become viral in your organization.

So there you have it.  Bob Blonchek and I penned these Five easy ways to build TRUST in your organization in our book "Act Like an Owner" and they are needed more now than ever.

Can Incentive Plans Really Motivate? Ask the Rice Farmer!

I had a conversation recently with Ray Schwemmer, CEO of CollabraSpace. Ray and his COO Shawn Davis have been working on a number of new corporate initiatives and as is often the case, the conversation drifted toward incentive plans and did they really motivate the kind of behavior leadership was looking for.

We talked about the new Malcolm Gladwell book, Outliers: The Story of Success.  One of the fascinating stories shared by Gladwell was the work habits of the typical Asian rice farmer.  Having grown up on a dairy farm in Pennsylvania, I was keenly interested in this idea of work ethic and the farmer.  In a nutshell, Gladwell suggests that work can be rewarding to the individual and beneficial to the organization (or society) if it is:

•    Meaningful – a clear connection between effort and reward,
•    Complex – the problem set was sufficiently challenging and
•    Autonomous - decisions are made on your own and coordinated.

So I suggest that any mid-market leader attempting to build incentive plans while ignoring these simple rules does so at his own peril.

Meaningful

Make sure your team understands that the extrordinary effort you are asking for will be fairly and perhaps handsomely rewarded.  Don’t scrimp on this.  Make the reward clear, straight forward and as close as possible to real-time.

Complex

Mundane work will numb the brain.  Innovation suffers in an enviroment where the rules can be overbearing.  Old market rules that once applied will be followed until either the market dries up or you are run out by the competition.  Always encourage your team to be creative in their approach to your business challenges.

Autonomous

Bob Blonchek and I wrote a book called Act Like an Owner with a central theme of creating an ownership culture.  Stephen Covey’s The Seven Habits Of Highly Effective People calls out six levels of initiative with the final being the ability to act on your own.  Teach your leaders the rules of your business and allow them to surprise you.

By the way, if you haven’t had a chance to read Outliers, it should probably be your next book purchase.  Right after you’ve updated your incentive plans !