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Sunday, 16 December 2018

Are Your People Coin-operated? Culture Can Beat That Problem!

One of the most common issues facing businesses at this time is the shortage of people with great attitude and specific skills.  With the lowest unemployment rate for decades and the highest level of unfilled vacancies there is a noticeable increase in salary levels being offered by potential employers.

Not only that but good people are being personally targeted daily to accept sometimes vast salary increases to persuade them to jump ship.
Each of the following examples is different but is affected in some way by the coin-operated question:

No 1 example.  Talking recently to a member of my Vistage peer group employing around 300, it transpired that he had three issues with promotion and recruiting new people.

One of his top young team members, very personable, great attitude, had been offered a salary increase of more than £15K over his current earnings to persuade him to move. After discussions he said that he was happy with his job, his colleagues and his career opportunities and had decided to stay.

Example No 2.  The company had made a decision to split one of the major functions in the business and had offered the opportunity of one of them to the present incumbent, a 12 year tenure team member at the same salary while recruiting for the other new role.

He had fulfilled that role previously and very effectively and this  point was stressed. There would be no loss of seniority but he chose to regard it as a demotion and requested a pay increase to compensate.

Example No 3.  Recruitment of a potential team member to fill the other role under the same terms and conditions went ahead. One candidate seemed very suitable, coming from a larger company now in administration and was very enthusiastic about the potential and the culture of the company.

However he came back a week later to say that he had another offer for a short term appointment at 20% higher salary.

Example No 4. In a professional practice a highly regarded team member gave in his notice having been  offered a position at a higher salary plus a car. The new company was a contractor and the conditions of employment would b manifestly different from those of the professional practice. He persisted however and left the practice.

None of examples are unusual in this climate. A very good friend of mine always believes , somewhat cynically perhaps, that people are coin-operated and higher salaries will always get the best people.

I beg to differ. If an employee moves for enhanced income then we need to ask ourselves a few questions. For example, what differential has persuaded him/her to move?  Are we paying market rates? What are the true career prospects? What are the reasons for looking for a new position in the first place? What effect would keeping him/her on a raised salary have on the other people in the business?

There is no doubt that a proportion of good people will move to increase their income and that has to be accepted. However if the other features of their employment are sufficiently significant to them then salary becomes less of an obvious feature.

It is said that motivation by salary lasts for one month (or even  week). After that change is not noticed unless it is exceptional. Other factors such as intangible rewards, recognition of performance, self-achievement, and a positive culture are far more persuasive.

Leadership guru Dan Pink suggests that leaders need to offer three features to the team as follows:

Autonomy.  That which allows, indeed demands, that people are sufficiently trusted to do their jobs without the need to be micro-managed

Mastery.  The freedom to develop from being adequate in performance to being exceptional

Purpose. Knowing where one is going, knowing where the business is going, and knowing that they are a trusted factor in the ultimate success of the organisation.

Offering those factors to your existing and potential employees can have a material effect in mitigating the salary issue.

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Sunday, 9 December 2018

Writing a Report, Sending Out a Message? Keep It Short and Simple!

There is a story about a woman whose husband was just about to make a speech at an important dinner, when she passed a note to him that just read:


A friend who saw the note commented that it was a very sweet and supportive thing to do whereupon the woman snapped:

Don’t kid yourself – it means Keep It Short, Stupid!”

There is a case for an amended version in business which is still KISS but this time it can be construed as:

“Keep It Short and Simple”

There is far too much complexity in our lives in just about every sense and we do tend to take that complexity into the workplace (and back home again if truth be told).

For example and many long years I have been propounding the concept of the Five Line P&L which looks like this:

         -Cost of Sales
         = Gross Profit
         -Fixed Costs
         =Net Profit

Simple, and tells you pretty well all that you need to know about the profitability of the business.  Drill down a little and see that Sales comprise a combination of volume and price, while Cost of Sales is generally a mix of direct labour and materials plus stock if appropriate.  All of that information can enable the leader to take action without necessarily micro-managing the situation

I recall a Finance Director who became rather tired of sending out enormous and completely comprehensive monthly management accounts to around six regional Managing Directors, so he sent a marker pen with one set of accounts and asked the MDsto mark the places in the accounts that they found of value.

The result was that he subsequently sent out management accounts on two pages with the offer to drill down if anyone wanted it.

Take a look at some of your emails, letters, memos, reports and so on, and ask yourself: What is of true value in this to the reader and what is frankly extraneous padding, commonly known as “stuff”.?

When I was producing 250 page market research studies, I used to start off with an Executive Summary of no more than two pages and bullet points that listed the salient findings of the study, all the relevant backup detail being included in the body of the report.  If anyone wanted to see them then all they had to do was drill down and there it was.  It didn’t, however clutter the situation by expecting everyone to read everything.

We waste an inordinate amount of time and effort in producing epics of such stunning complexity that only have the effect of engendering glazed eyes in the reader.  Our attention span is no more than a few seconds before boredom sets in – not a good thing but it is realism.

It isn’t patronising to keep your communication short and simple.  It is realistic and just means that the reader is more likely to take action and not expire from boredom from the resultant inactivity.  Even worse, complexity can lead to interminable discussion and argument neither of which are conducive to useful and productive action. 

Perhaps I should have read through this epic and used KISS rather more.

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Sunday, 2 December 2018

Shall I or Shan’t I? It Is All a Matter of Conscious Choice!

From time to time someone says something and you realise that it has significant resonance and, gratefully, for me is a topic for the blog.

We had the pleasure of hearing the brilliant Kate Marshall speak at my Vistage Key Executive peer group this week and among a myriad of insights she mentioned choice and how significant it is in our businesses and lives in general.

Having done some limited research as a consequence I am in awe that this little word can have such a defining impact on us, each and every day.

The generally accepted wisdom is that the average adult makes 35,000 decisions a day and given that will not include sleep time, it equates to almost 2,200 an hour or an extraordinary 36 a minute all resulting from choices that we make.

We make a  vast proportion of these choices without thinking about them. They are an integral part of what we do and how we do it.  For example if we are sitting and decide to stand up it is a natural movement and we do it subconsciously. We don’t need to have an internal discussion about it.

However, the next phase is the one that starts off the need for choice. Do I want a gin and tonic or a beer to cheer me up watching rubbish on TV?

There is, of course, a simple process, an algorithm, that we go through in order to come to a decision and it all starts with the choice we make.  

The questioning process is :

  • What is the precise description of the issue?
  • What is the ideal desired outcome?
  • What are the alternative options open to me?
  • What is the cost, financial and other, for each option?
  • Which option seems to be the most desirable?

Make a decision  and take action. (The best solution is to join a Vistage peer group, of course)

All of this process can be collapsed into a simple binary choice, shall I or shan’t I and these comprise most of the 35,000 a day. It is the rest of them that cause us to be more analytical.  

But are we always analytical?  How many times do we say that we have a gut feel about something and make a decision that, on the face of it, could be construed as perverse?

And what about the decision on based on opportunity?  I recall meeting someone at an exhibition many years ago and after a very pleasant conversation he gave me his card and said that if ever I felt like a change I should give him a call.  He turned out to be the Chairman and/owner of one of the biggest companies in Italy with a global reputation. In fact it was a binary choice in the early stage. Do I contact him or not? Foolishly I didn’t.

Shakespeare in Julius Caesar wrote:   There is a tide in the affairs of men which taken at the flood leads on to fortune.   The key to this is “taken at the flood” which implies that some conscious thought has been given to the choice to be made.

Great leaders seem to have an inbuilt ability to cut through all the “stuff” that accompanies a need for a decision and to focus on the desired outcome. Then the choice becomes easier even if the risk element has not been reduced.

In the end we make 35,000 decisions every day and that means that we will get a lot of them right and presumably one or two that could have been better.  It is a matter of choice and thinking about it so that we improve our decision making.

It is largely an unconscious exercise.Try it out.  First thing every day when we get up choose to have a great, productive  day and remind yourself about that choice during the day. It really does work.

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Sunday, 25 November 2018

What Do Our People Want? It’s Autonomy, Mastery and Purpose!

Many years ago I went to a presentation in London by the renowned Professor of Marketing at Harvard, Theodore Levitt.  One of his maxims has lived with me ever since:

“If you don’t know where you are going, any road will take you there.”

I thought this to be brilliant until I recently fell across the following:

“If one does not know to which port one is sailing, no wind is favourable.”

This was said by the Roman philosopher Lucius Amaeus Seneca (4 BCE - 65 CE) so there isn’t much that is new under the sun.

It is perhaps self evident that if we start on a journey either physically or metaphorically, to a geographical destination or an objective of any sort it at least makes sense to have an idea of the shape of the final outcome.

I frequently hear members of my Vistage CEO peer group discussing how to motivate their people or at least some of them. The quick answer is that you can’t.  The best that you can achieve is to provide an environment in which people can motivate themselves should they so desire it.

Coincidentally I am currently listening to the audio version of an amazing book, “Drive” by Dan Pink (https://www.amazon.co.uk/Drive-Daniel-H-Pink/dp/184767769X/ref=sr_1_1?ie=UTF8&qid=1511438548&sr=8-1&keywords=drive+by+dan+pink)

He demolishes the long held methodology that makes sense to encourage and reward good performance and punish poor performance.  We all know that it is sensible to motivate people by offering some sort of reward to encourage them to work harder or more effectively.  Right?

Wrong.  A myriad of experiments have been conducted to show that frequently this is just not the case.  

However, and it is a very big however, if there is only a small need for some sort of cognitive input to accomplish a task then the science shows conclusively that not only do financial incentives not work but they can actually have a negative response.

This is counter-intuitive.  We can live with the idea that people are coin-operated because it seems to be logical but in fact, it just isn’t true.

Dan Pink proposes the concept, repeated by many eminent psychologists worldwide, that intrinsic drivers are far more effective than extrinsic or those imposed from outside inwards.

We all want and need three outcomes to give us satisfaction in work, play and indeed life itself:

  • Autonomy
  • Mastery
  • Purpose

Autonomy says that we much prefer and operate more effectively if we have control over what we are doing with the freedom to check and perhaps ask for assistance as necessary.  It has been said very sagely that it is demeaning to expect people to accomplish other people’s objectives.

Mastery means that we all want inherently to become expert at something whether at work or play, whether it is relevant or not.  Typical is the person who is learning to play the piano. They don’t normally expect to become a virtuoso but are doing it for pleasure and for another step on the road to mastery.

Purpose results from the achievement of autonomy and mastery.  We all need some purpose in our lives and not necessarily through the adoption of pure objectives.

Leaders can take great lessons from this book.  Instead of continuing to use the sterile methods that intensify the need for “management” of people we need to give our people the respect that they deserve by offering them autonomy in their working practices, the ability to achieve further steps to mastery and to encourage them to have purpose in their lives.

Be astonished.  Read Dan Pink’s book, “Drive”.  Take a look at the YouTube video, “RSA Animation Dan Pink” and start to change your life for the better.

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Sunday, 18 November 2018

Driving Excellence in the Business? It’s More About Driving Change!

In the early days of my career I was allocated to the Inspection Department of my employer, a major aircraft manufacturer in Manchester. My tasks consisted of checking random components against the appropriate specification and either passing or failing them.

Depending on the failure rate we could then either pass or reject a whole batch of items.

It was very simple but it did give me an insight into the need for quality across the board.  Obviously if a component on an aircraft failed the results could be catastrophic.

We used all the old type equipment, surface tables in cast iron or granite and a wide range of physical measuring equipment like height gauges and callipers that had to be calibrated against a regular schedule to ensure consistency.

Everything was laboriously recorded to set up a paper trail so that we would have a record if anything went amiss.  How things have changed.

My early experience was in inspection leading to quality control and the responsibility for compliance rested with the inspectors whose word was law.

The system was reasonably effective albeit cumbersome and inefficient and as time passed there was a realisation that random batch inspection was not an acceptable method.

Both manufacturing methods and measuring equipment improved enormously and it became feasible with advanced technology to ensure that as components were manufactured, they were automatically inspected and the machine adjusted itself if necessary.

This was a new departure called quality assurance in that batch checking was no longer necessary as every component would be compliant.

In the early days of QA I heard a story of a UK company that ordered number of components from a Japanese supplier and stipulated that the failure rate must not exceed 1%.

When the shipment arrived there was a separate bag included carrying a number of components and when this was queried the buyer was told that they were the 1% rejected items that had been specified.  We only supply correct items that are cleared to 100% of specification, they were told, so we had to make the incorrect ones separately.

Perhaps this story is apocryphal but it does emphasise  the changes in attitude that spread throughout manufacturing.

Attitudes can be catching be they negative or positive and it is no longer sensible or even feasible for a manufacturing section to operate in an ineffective and inefficient organisation.

The consequence is therefore is that quality, per se, or preferably excellence becomes one of the most significant values espoused by a business and needs to be at the centre of everything that the business projects to its stakeholders.

We must dedicate everything that we do to the constant drive to achieve excellence in all aspects of the business, small and large.

Renowned US consultant and spacer Tom Peters, says:

Excellent businesses don't believe in excellence, only in constant improvement and constant change.

The point is that excellence, like perfection, is unattainable so  we should embrace the need for constant improvement brought about by change.

The pursuit of excellence is a journey not an objective.

We live and work in a competitive environment and this must never be equated to price.  There are many other criteria that persuade people to deal with us and price is only one of those reasons.

Check how excellent are you in terms of customer service for example, how quickly is the telephone answered (no more than three rings) , do your people tell the truth (I’ll call you back in an hour and then don’t).

The best people to ask about our service are our customers.  Check on how your people relate to them, what changes do they (the customers) want from us, how satisfied are they with us.

Send them a regular three-question survey (like Amazon) and then send them the results and any action you propose to take.

Remember, we don't have to be sick to be better so we must constantly embrace constant change to achieve an ever higher level of excellence in everything we do.

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Sunday, 11 November 2018

Forecasting the Future? You Can Only Be Wrong or Lucky!!

One of the most contentious issues that leaders encounter is that of forecasting, both financial and generally commercial.

Leaders in business are bombarded on all sides by learned so-called experts with their  strictures on the absolute necessity to plan for the future and no sensible argument can be found against it.

Going blindly into the future is not a very bright idea but it must be accepted that there is a significant difference between planning and forecasting.

Planning involves the generation of an amount of data relevant to the business in the relatively short term, considering it in total and then making some assumptions that can lead to a reasonable level of confidence.

It should be noted that planning and the setting of objectives is done with intention; that is, an intention to give the business a structure for the future however short or long that might be.

The word ‘objective’ in my lexicon implies that which we intend to achieve and is not a forecast except in in a limited  descriptive sense.

The planning process therefore includes assessments of potential sales and income, possible changes in costs of supplies generated from scrutiny of published information, and possible effects of PESTLE (political, economic, sociological, technological, legal and environmental) changes that are outside our control in the wider sense.

It is perfectly feasible, for example, to look at the past performance of the business covering as long a term as makes sense and then use spreadsheet technology to calculate the average change using linear regression analysis.

This will overlay a straight line growth or decline average on the plotted graph and this can be extrapolated to give an indication (and no more) of what might happen in the near future.

The problem then arises as to how much further can this be expected to be realistic.   In general terms given, say, a 3-4 year monthly rolling annual plot of sales it would not be sensible to assume much more than a few months.

Good planning for the future makes absolute sense but it must be constantly understood that the underlying results will always be based on uncertain information, that is, what will the future look like?

On the other hand, however, the very process of forecasting is based far more on PESTLE criteria and as a consequence, is subject to much more uncertainty.

My great friend and top Vistage speaker, behavioural economist Roger Martin-Fagg says with much perspicacity that when we forecast there are only two alternative outcomes; either we are wrong or we are lucky.

Most of the polling organisations in the UK use a weighted sample of around 1,500 respondents to come to what they cheerfully would call a conclusion about voting intentions.

Sampling theory is a science on its own or at least within the science of statistics and it can be shown that after a certain time and number of responses, there is virtually no change in the results.

The clues are in the words”weighted” and “virtually”.  The weighting of the sample covers age, gender, socio-economic considerations and much more and it is obvious that a very minor variation in the assumptions could lead to a major variance in the results.

Accordingly most polling companies publish their finding without mentioning that there may be anything up to +/- 2% error.  Is it any wonder that their conclusions can be viewed with some scepticism.

We are being battered on all  sides by so-called experts pontificating on the malign (they are always malign) effects of what is going to happen in their estimation but once they have pontificated, no-one remembers what they have said and in truth doesn’t care very much.

If I hear another gloomy prediction about the dreadful consequences of a no-deal Brexit I shall have to be very cautious not to want to put a brick through the TV.

Treat every forecast, considered or otherwise, with the respect it deserves.  Remember that it is only guesswork in the end.

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