Archive for the ‘Management & Leadership’ Category

On values-driven change management

Every business leader knows businesses must adapt to their environment or become discredited and irrelevant over time. But how do you do this as quickly and painlessly as possible?

While there are many leadership styles, the odds of a successful transformation improve when a leader’s values and behaviours are congruent with the mandate of the company, and are seen as aspirational.

Maurizio Bevilacqua, the mayor of Vaughan, Ont., is spearheading significant cultural change, transforming operational productivity, enhancing service levels and improving employee engagement while bringing newfound respect to city politics. His values-driven approach to leadership offers many lessons for people tasked with leading major transformation in any organization.
The mayor is no stranger to the public sector. He has served in government for many years, including as a Member of Parliament for Vaughan for 22 years. In 2010, he left federal politics and was elected mayor of the city. From the get go, Bevilacqua adopted a different leadership style from a typical politician. His approach relies less on command and control management and more on setting the right example and instilling in the culture aspirational, humanistic values.

Values-driven leadership is not new in the private sector. Many of the world’s most successful business leaders — Steve Jobs (Apple), Herb Kelleher (Southwest Airlines) and Jerry Greenfield and Ben Cohen (Ben & Jerry’s) — have imprinted similar values in their companies with great results.

Bevilacqua’s values-driven leadership is demonstrated through a variety of practices and programs. For example, positivity, servitude and goodness are regularly invoked as guiding principles from strategy development on down to personal actions at Vaughan City Hall.

The mayor believes in improving employee engagement through small but personal gestures such as praising the dedicated efforts of employees both privately and publicly, placing a personal phone call for special occasions or simply saying thank you. The commitment isn’t just lip service. He and the members of council provided written commitment to the Vaughan Accord — a 12-point document that defines the principles of public service — a promise of responsible, co-operative, transparent and effective governance.

So far, the mayor’s approach has paid off in spades. Vaughan is now among the top municipal performers in Canada in voter satisfaction, economic development and staff excellence. To wit, a recent Citizen Survey revealed that 90 per cent of Vaughan residents are “very” or “somewhat satisfied” with city services overall, while 95 per cent rated quality of life “good” or “very good.” These numbers have all increased during the Bevilacqua’s tenure.
Furthermore, a fresh, business-friendly environment has led to a 18.3 per cent increase in new business creation since he assumed office. Similarly, his values-driven change has had a positive effect on staff excellence; employee engagement and demonstrated leadership competencies are up 13 and 17 per cent, respectively, compared with 2009.

Mayor Bevilacqua’s leadership style and methods are congruent with other best practice change practices:

  • Develop an inspiring narrative and values Leaders need to appeal to their staff’s spirit as well as logical brain using a simple message communicated regularly;
  • Engage all stakeholders Ignoring some groups, especially skeptics, may short change the effort and create unwanted opponents;
  • Model desirable behaviours Credibility is everything. If leaders talk the talk, they need to walk the walk;
  • Support your staff Nothing slows momentum faster than a leader who does not help their team overcome roadblocks; and
  • Be patient Real change takes time, courage and perseverance

Without a doubt, Mayor Bevilacqua is on the right track to transforming Vaughan. Yet, he should be mindful of the sage words of Pericles, Athen’s leader during the Peloponnesian War. “What I fear more than the strategies of our enemies,” lamented Pericles, “is our own mistakes,” a warning all leaders should heed.

To discuss this topic please email me at mitchell.osak@ca.gt.com

Why do smart executives make bad decisions?

Why do seemingly intelligent and well-meaning executives make bad business decisions?

As consultants, it’s a question that organizations task us with answering, often through postmortem reviews of failed strategic initiatives. The idea is to develop a better understanding of how and why pivotal (and ultimately poor) choices were made in hopes of not repeating the mistakes.

We look at the analysis undertaken, the managerial deliberation and how the final decisions were made. In each case, we discovered that the root cause of the bad choice(s) was not the decision-makers themselves — i.e. stupidity on the part of management — but rather a dysfunctional process for making decisions.

Optimizing the decision-making process can go a long way to improving the level of analysis, managerial buy-in and the quality of the decision. And — perhaps most importantly — it could spare your organization from being responsible for the next Edsel or New Coke.

Worst practices

Rigid silos
Whether purposefully, a product of geography or a matter of culture, employees in many organizations are “siloed” in discrete units or departments. Rigid silos restrict the flow of ideas, hampering the collaborative process required for developing sound analysis and making informed decisions.

Executives who possess a siloed worldview — i.e. “empire builders” — can be particularly toxic. Unlike lower-level managers, these individuals have the power to inhibit the allocation of necessary resources and the development and implementation of strategy that serves the interests of the larger organization.

Excessive politics
Politicking is inevitable when any group is gathered to make an important decision. The trouble occurs when politicking gets out of control and supersedes sound logic. This sort of dysfunction breeds and emboldens bias and ago, which can hijack the process and lead to lousy decision-making.

Common examples of excessive politicking include: prioritizing departmental or career goals at the expense of corporate ones; keeping key stakeholders in the dark through the widespread use of back-channel communications; and overemphasizing consensus building or “what will fly” over what makes the most sense.

Muddled processes
Most large organizations assert the importance of strategic problem solving and retain scores of managers who possess this skill. However, many of these firms fail to create and follow the right practices for guiding and empowering these individuals to reach their full potential.

The process — if it even exists — often follows inadequate preparatory work and is too brief, under-resourced and devoid of key stakeholders. Worse, the individuals who are in the room often possess a shared analytical framework thus and lack the skills, expertise and vision required for distinguishing between a good idea and a bad one.

Best practices

There is no silver bullet for creating and sustaining an effective decision-making process. Every company and situation is unique. However, getting the organizational fundamentals right can go a long way toward mitigating and eliminating many of the aforementioned issues. Generally speaking, best practices include:

  • Developing and implementing a systematic decision-making methodology and process
  • Encouraging open and frank discussions about all options, assumptions and scenarios
  • Providing access to high-quality and actionable data
  • Using practical and coherent criteria for evaluating decisions
  • Having engaged and impartial leaders overseeing the process

For more information on our services and work please visit Quanta Consulting Inc.  Follow me on Twitter @MitchellOsak or connect through email at mosak@quantaconsulting.com

What business leaders can learn from the Seattle Seahawks

Now is probably not the most fashionable time to praise the Seattle Seahawks. Last weekend’s Super Bowl saw the team give up their lead with 2:02 left on the clock and proceed to come up just short of winning by throwing an interception in the last minute. But individual failures do not make of break a team. The long game is what matters, and the Seahawks have demonstrated two years running that they are among the most elite, dependably top-performing franchises in the league.

Below, I’ve outlined some characteristics of the Seahawks’ formula. No doubt, the team’s philosophy can seem a little hokey, but there is no denying that their transparent, competition-driven approach works. These insights should be of great interest to business leaders looking to maximize productivity at the lowest possible cost, and the lessons therein applicable to firms looking for better ways to find and manage talent, develop a supportive culture and align their organization around a central mission.

Recruiting talent

During recruitment, companies talk about their values and expectations — but often in an ad hoc or incoherent fashion. This is because many firms do not invest sufficient time and energy in identifying what kind of organization they are. As a result, new hires often discover they’ve been sold a false bill of goods. This can result in reduced engagement and performance and, worse, increased turnover.

The Seahawks recruit differently. Here’s an excerpt from the brochure they provide to prospective players. According to Coach Pete Carroll,

“We wholeheartedly believe in competition in all aspects of our program, and the only way to compete is to show it on the field. We’re dedicated to giving all of our players a look to find out who they are and what they’re all about so we can field the best team possible.”

This document details a philosophy of competition that is clear and direct. It sets an accurate tone from the original point of contact, letting every prospect and their agents know what will be expected and how they will be measured. This simple step helps to mitigate the likelihood of unpleasant surprises down the road.

Managing talent

The fact that more and more can be measured now — both in terms of productivity levels and strategic success — can put managers under a microscope. This inevitably results in an adversarial, “what have you done for me lately” management style and a general risk aversion when it comes to decision-making. Needless to say, this in turn can lead to diminished long-term competitiveness, poor morale and, again, increased turnover.

Seahawks management takes a different tack. Despite poor play for much of the final game, Coach Carroll never wavered from his season-long game plan and reliance on all players in his line-up. He stayed loyal to key players such as Russell Wilson. And, he was not shy about using new players like Chris Matthews. While Mr. Wilson was mediocre during most of the first half, he did lead the team back strong in the late 2nd quarter to the end of the game.Mr. Matthews led the Seahawks in passing reception yards in the final game, despite not catching a pass for the entire season and being a shoe salesman not too long ago.

Rewarding talent

Recruiters tend to bring certain assumptions to the table regarding what kind of person is best for a certain job. These biases often include a preference for candidates from a certain school, possessing a certain degree or having had certain work experience. These assumptions usually go unchecked because many organizations lack the performance measurement systems necessary to uncover what actually works — and what doesn’t. This can result in qualified, and often less expensive, talent being overlooked. Just as troublesome, it can result in weak performance being unwittingly rewarded in terms of hires, promotions and salaries.

The Seahawks, on the other hand, are hard-nosed and pragmatic in their approach. Everyone must compete for their positions every day, regardless of where they come from or what salary they command. Crucially, the Seahawks aren’t afraid of putting un-drafted and untested free agents on the field. These players tend to put in their best effort in exchange for the opportunity. For example, they signed Russell Wilson, who many teams passed up on because he was considered too small, for less than $1-million per year. He went on to be an all-star quarterback. This not only provides the Seahawks with more affordable talent, it motivates their big guns to avoid resting on their laurels and to continue to demonstrate why they deserve to be on the field.

For more information on our services and work please visit the Quanta Consulting Inc. web site.  Also, please follow me on Twitter: @MitchellOsak

Digitally disrupting your company

Disrupt or be disrupted. This is the stark choice with which many senior managers are faced as emerging technologies and corresponding behaviours continue to reshape the marketplace.

Given the choice, most would understandably choose the former. The problem, of course, is that many organizations are crippled by organizational inertia. Market leaders and public companies are particularly vulnerable, as they tend to possess deeply entrenched operational structures, revenue models and cultural values. Either they don’t see the change coming or, more likely, can’t muster the organizational willpower required to do anything about it.

Case study: OLG

Five years ago, Ontario Lottery and Gaming Corp. found themselves in this position. Senior management observed that Millennials are less interested than previous generations in gambling the old-fashioned way. Natives of the Internet and accustomed to the conveniences afforded by smartphones, many were turning away from corner-store kiosks and toward online poker and other “casino-style” games that can be found easily, if illegally, on the Internet.

At the same time, the OLG found itself struggling to hold on to its existing customers. Not only were fewer Americans visiting their casinos, U.S. competitors were also making inroads in luring Canadians south of the border. Both trends spelled a slow slip into irrelevance for the crown corporation.

So they decided to do something about it.

Rather than merely mitigate risk, senior management sought to develop a digital strategy that would enable them to capitalize on these trends. They began by asking the following questions:

  1. What business are we in?
  2. What business should we be in?
  3. How can technology facilitate this transformation?

What they concluded was that they are in the lottery and gaming business, not (merely) the casino and scratch-card business. “OLG’s goal is to provide the games our customers want to play where they want to play them,” says Tom Marinelli, OLG’s acting president and CEO. “As we transform, our advances in technology are giving us a new opportunity to continue to be relevant to our customers.”

In response to changing customer needs and demands, the OLG began work on an online lottery and gaming hub. Set to launch this year, PlayOLG.ca will provide online gaming and sell digital lottery tickets. The idea is that by matching or exceeding the experiences offered elsewhere on the Web in a manner that is both secure and legal, the OLG will be able to attract younger adult customers and fend off illegal international competitors.

The execution strategy for PlayOLG.ca was informed by paying close attention to how the Internet and mobile technology are affecting the gaming and lottery business at large. In doing so, they identified and implemented a set of best practices. Here’s what they came up with:

  • Place technology-savvy leaders at the forefront. For the OLG, this meant selecting Mr. Marinelli, who has a background in both IT and operations, to lead the transformation.
  • Consider change holistically, involving all stakeholders. Because the lottery and gaming industry is highly complex and regulated, all aspects and implications must be considered when implementing any kind of change. The concept of “responsible gambling,” for example, must be applied to all customer-facing products.
  • Communicate plans regularly to employees. With up to 30% of the OLG’s 8,000 employees unionized, poor communication could very well spell disaster.

Even with these pivots, the future of the OLG is uncertain. Currently they’re seeking new ownership, with both Bell and Rogers rumoured to be potential buyers. But whether the OLG stays public or goes private, going digital will surely go a long way toward ensuring the long-term viability of the organization.

Takeaways

Many of the lessons learned by the OLG can be of value to other organizations similarly faced with disruption. To undertake a digital transformation initiative of your own, you should begin by asking yourself the following questions:

  1. How can a new technology help improve operations or better serve customers?
  2. How difficult will deployment be, and at what long-term cost?

To answer these questions, you’ll need to develop a 360-degree view of both your organization and the market in which you are situated.

  • Where are we going as a company?
  • What capabilities and organizational model do we need to adopt in order to capitalize on the new technology?
  • How will customers and other channels be affected by the new technology?
  • What is the potential economic impact of the new technology?
  • What can we learn from other firms’ experiences?

Regardless of what your answers are, any digital transformation of a scope similar to that of the OLG will require the following: support from the board, enterprise-level expertise in adopting and managing emerging technology, a clear understanding of where profitability comes from and a functioning capital and resource allocation process. Above all, however, a successful digital transformation requires just two things: strong senior management and a willingness to change.

For more information on our services or work, please visit the Quanta Consulting Inc., web site.

5 steps to rebrand your business

The successful rebranding and strategic pivot of Tangerine, formerly ING Direct, was the product of strategic insight, thorough analytics and diligent planning. Just as critical was the firm’s ability to pull off a complex transformation in a time of market uncertainty and regulatory change. With 70% to 80% of change initiatives ending in failure, Tangerine holds many lessons for companies looking to strategically reposition themselves or undertake other change initiatives.

“Managing change can be both challenging and rewarding,” says Peter Aceto, president and CEO of Tangerine. “Since we all perceive change differently, it is a journey that must be met with honesty, regular communication, reassurance and, above all, a positive attitude.”

ING Direct was purchased by Scotiabank in 2012. The new entity had two ambitious goals to be achieved by 2014: first, to rebrand under a new name and identity (soon to be Tangerine); second, to expand beyond the firm’s core positioning (tagline: “Save your money”) to include new services and products relevant to their Web-based customers (tagline: “Forward banking”).

Execution missteps, such as ignoring cultural issues, poor planning or lack of management follow through, make real change very difficult to pull off. The challenge for a 1000+ employee bank like Tangerine is to execute major change initiatives with existing resources without compromising existing revenues, service levels or regulatory compliance.

“While it definitely had its challenges,” says Mr. Aceto, “I can say that we’ve come out stronger than ever before while staying true to our core values and the brand that Canadians know and love.”

Tangerine’s leadership deserves credit not only for formulating the right strategy, but also for executing on that strategy — arguably a much bigger challenge. The company pulled off the repositioning without missing a profitability beat or alienating its parent company. Since announcing its name change, Tangerine has exceeded its profitability and custom acquisition goals without compromising its image.

What best practices for managing change can other companies learn from Tangerine?

Start at the top

Successful change requires cross-functional involvement by senior leadership throughout the entire transformation process. Management accountability ensures appropriate focus, ownership and resources, as well as providing timely attention when unexpected problems arise (as they inevitably do). In alignment with Scotiabank, Mr. Aceto personally led the brand transition from the initial discussion through the planning and execution. He was also active in removing resource and organizational roadblocks when they occurred.

Create a narrative

A “change story” should be developed at the outset, connecting the change with who you are as an organization, how you generate consumer value and where you are going. Where cultural change is required, management needs to deploy detailed programs outlining target behaviours, processes and practices. Tangerine expended a considerable amount of effort developing a positive narrative for its customers, employees and partners — namely, that the acquisition was the best way of enabling future growth beyond the core business.

Communicate regularly

The likelihood of misinformation, rumour and uncertainty is quite high during transitions. To avoid these traps, leaders must regularly communicate to all stakeholders in a direct, honest and succinct fashion. Initially, key messages should articulate a desired end-state, a high-level roadmap and the benefits and risks associated with the strategy. Once the transformation has begun, communications should reinforce the narrative, acknowledge positive role models and provide progress updates.

Pay attention to the human element

Management actions early on signal to workers the priority and tenor of the change initiative, as well as what life will be like post-change. Successful change pays attention to each employee by creating individual metrics and adjusting priority lists. While plans and processes are important, ignoring the human dimension can scuttle buy-in and morale and increase business risk. When necessary, Tangerine’s managers undertook the “tough” conversations with employees in the spirit of mutual respect.

Don’t mess with success

Tangerine’s leadership, planning and execution were vital to ensuring the transformation happened in fewer than 18 months. However, credit must also be given to the role played by Scotiabank. Many acquirers feel compelled to take charge and be highly prescriptive in their oversight. Scotiabank’s post-acquisition leadership team understood much of what they were buying was a unique culture and aligned early on with Tangerine’s senior team to avoid over-managing during the transition or in ongoing operations.

For more information on our services and work, please visit the Quanta Consulting Inc., web site.

6 traits of great cultures

Several studies confirm the correlation between corporate culture and financial performance, employee engagement, levels of innovation and customer satisfaction. Companies such as P&G, Southwest Airlines, FedEx and Starbucks have been able to differentiate and excel in highly competitive markets in part by developing and sustaining healthy cultures. By the same token, the toxic cultures of firms such as GM, Blackberry and Air Canada have contributed to declining market performance.

In short: culture matters. But what exactly is culture?

A culture can be defined as the norms, practices, history and values of an organization — in other words: “how things are done around here.” The health of a culture is generally quantified through employee engagement scores, with Canadian companies averaging 40-50% engagement.

These days, companies are looking to enhance their organizational life without turning their company inside out. While the differences facing each firm often call for unique approaches to cultural renewal, best practices cut across different sectors and organizational structures and are always based on inspiring leadership and skilled management. Below, I’ve identified six tips for developing a highly successful corporate culture.

Lead by example
Leaders don’t work on culture, they work in it, tracking it, modelling the right behaviours and communicating core messages. Savvy leaders look beyond yearly employee surveys to regularly gauge sentiments and enlist feedback during weekly chats or informal events. David Agnew, CEO of RBC Wealth Management Canada, undertakes frequent branch visits, meets directly with clients and regularly and directly communicates with all of his team, as well as rank-and-file employees.

Tell your story
Every company has a story. Great leaders capture and articulate this story in an inspiring way in order to develop a powerful mission or ethos that serves as an organizational “North Star” (or guiding principle). A good example of a North Star is Google’s inspiring mission to organize the world’s information and make it universally accessible and useful.

Provide purpose
In a healthy culture there is an implicit — if not explicit — awareness of the connection between mission (what value you deliver), values (what inspires your activities), actions (what needs to be done day-to-day) and behaviours (what becomes second nature). Employees within these cultures tend to strongly identify with their company’s purpose, values and goals, improving both engagement and satisfaction.

Solicit feedback
Internal practices, tools and policies play a vital role in promoting or hindering desired behaviours. These practices need to be regularly reinforced and tweaked as necessary to ensure high performance and adaptability to new conditions. Some proven steps include having monthly town hall meetings, encouraging interactions outside of work and utilizing knowledge management systems.

Inculcate and reinforce
It is easier to attract and build an esprit de corps and promote the right behaviours when the firm has effective mechanisms to manage human capital. RBC Wealth Management Canada has extensive on-boarding and training programs for new hires, culture-reinforcing performance management systems and ongoing practice management for seasoned professionals. “It really helps us to attract and retain the industry’s best people,” says Mr. Agnew.

Embrace differences
Healthy cultures are not homogenous. Numerous studies have demonstrated that higher organizational performance and innovation come from diversity, not uniform workforces. Though RBC has a dominant ethos, it does not seek out one specific kind of employee, believing diversity of talent and style can help contribute to continued growth. “There are no shortcuts to establishing and maintaining a positive culture,” says Mr. Agnew. “It requires an investment of time, effort and resources at all levels of the organization.”

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Social business replaces social media

Busy managers should be excused if they are not current on every development in the social media world. In discussions around digital transformation, one question regularly comes up: “Where is social media heading?” Based on our research and project work, we have identified four emerging social media trends. Overall, social media is morphing from a communication tool to a larger social business enabler.

1.  It is not just for the marketers

Marketing no longer has a monopoly on social media programs. Other groups like HR (for external recruiting), product development (for innovation) and customer services (for product support) are increasingly driving usage on these platforms and delivering business value.

2.  Content strategies are evolving

Most marketing efforts “push” content out more than 90% of the time. Marketers (and other departments) will progressively become more social, seeking a balance between pushing information and engaging their customers in dialogue around the content. Moreover, visual content will likely become more prominent in these social and collaborative conversations. Expect new social apps to better support the embedding of visual content (including live video) into conversations to better deliver sales demos or technical support.

3.  Resetting the community button

Many attempts at community cultivation are failing due to a lack of resources and mismanagement. Equally important is the dearth of dialogue-fostering social elements in the content, such as relevance and uniqueness that cater to specific interests. “At its core, social media is about being social. Your social strategy should be designed to deliver an interesting core message that wants to be shared,” says Marilyn Sinclair, president of communications company All About Words. Companies are steadily getting serious about building focused communities that emphasize social sharing.

4.  The rise of social analytics

To better target business problems, understand customers and generate enterprise-wide ROI, firms are beginning to analyze, listen and learn from customer experiences, and tap into the social pulse of customers, advocates, influencers and their collective networks. These learnings will improve the quality and quantity of social media interactions.

Social business initiatives are all about enabling workers to collaborate with customers through social media to solve problems or capitalize on opportunities. To do this, participant conversations will need to cross functions, locations and devices, blurring the barriers between the internal and external roles. This transition won’t be easy for every firm. Gartner, an IT research firm, predicts, “Through 2015, 80% of social business efforts will not achieve the intended benefits due to inadequate leadership and an overemphasis on technology.”

The following success factors can help a firm exploit the trend towards social business:

  • Make strong leadership and expert change management a priority

When it comes to leveraging IT, the corporate Achilles Heel is often internal adoption. All senior leaders — and not just the CIO — should prioritize social business initiatives, model the right behaviours and deploy the right change resources and tools to drive employee acceptance. For example, some CEOs are appointing Chief Digital Officers to drive digital adoption across the organization. In other cases, companies have created senior, cross-functional steering committees to secure alignment, focus and investment. Technology is merely the delivery system

  • Establish a clear and compelling purpose for social business from the outset

Most organizations look at collaboration as a technology platform issue not as a solution to a specific business problem. Having a platform view isn’t necessarily wrong from an enterprise perspective but it frequently leads to band-aid approaches that don’t get to the root cause of problems and typically get bogged down in organizational inertia.

“Organizations fall in love with the newest ‘thing’ and they want to be cool, but they forget that their objective is to compel an audience to do something specific. Clear, consistent and compelling messaging that address social business needs across all platforms is key,” says Sinclair. “Technology is merely the delivery system.” Social business is best enabled when the business problem drives all key decisions including technology choice.

  • Consider systems and cultural tweaks to support social business

Many companies today are not well organized to conduct social business. For example, community management and customer-service efforts often lack sufficient capabilities including tools, people and skills to deliver credible programs that address customer needs. In other cases, a firm’s organizational dynamics (e.g., siloed structures, and oblique processes), performance measurement tools and culture norms do not promote free flow communication let alone collaboration.

Companies can maximize the value of their social media investments and efforts when they shift from a marketing-centered, “push” approach to an organization-wide, problem-solving strategy that engages both the community and firm. The first step in leveraging social business comes from exploring how a company can meaningfully talk and listen to their customers and stakeholders to collaboratively address their needs through the right business solution.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Re-introducing character in hiring

Warren Buffet once relayed the wisdom of another business leader that when looking to hire, managers should look for three qualities: integrity, intelligence and energy, and that if the first one isn’t present, the other two will kill you.

The current business climate has never been tougher on senior managers. Based on executive turnover statistics, many managers do not seem up to the task.  Perhaps organizations are too impatient, they cannot attract sufficient talent etc. Or, there is another reason.  The hiring process is ignoring a fundamental tenet of effective management — character.  You don’t need to go far (Dennis Kozlowski of Tyco and Jeffrey Skilling of Enron quickly come to mind) to find examples of how character deficit has seriously harmed a company. Fortunately, firms can bridge this character gap through better selection criteria and recruiting processes.

Every job description and recruiter talks about character but few actually account for it in a meaningful way.  Character describes a series of positive personality traits such as integrity, honesty and courage; it is a prerequisite for effectively dealing with people and their environments — in other words management. Maximizing the amount of character by person or group can help drive financial and organizational performance, including fostering effective leadership, encouraging communications and problem solving.  This can be especially true in difficult operating environments.

The character gap

Poor character has been cited as a major reason for high levels of turnover. In his research for the book, Hiring for Attitude, author Mark Murphy found that among the 20,000 new hires he tracked, 46% failed within 18 months.  About 90% of the time, the turnover could be attributed to attitudinal reasons such as low emotional intelligence, motivation and temperament. Addressing this character deficit is tough.  Herb Kelleher, former Southwest Airlines CEO has said, “we can changes skills levels through training, be we can’t change attitude.”

The impact of this turnover on organizational performance and cost should not be minimized. G.H. Smart, writing in his well-regarded book, Who, says “the average hiring mistake costs 15 times an employee’s base salary in hard costs and productivity loss. Hence, a single hiring blunder on a $100,000 employee can cost the company $1.5 million. “

Successful companies understand how important character is to business success.  Like Warren Buffet, Jim Collins, author of Good to Great, found that:  “The good-to-great companies placed greater weight on character attributes than on specific educational background, practical skills, specialized knowledge or work experience.”

Why does character get short shrift? The fault lies in the typical recruitment and evaluation approach:

Incomplete selection criteria: The usual job description includes a laundry list of needs that are weighted heavily on skills and experiences. Intangibles like character, if they appear, are often at the bottom of the description reflecting their lower priority and scant consideration. Worryingly, when an organization is under stress, their leadership may abandon character requirements altogether, adopting a “tough times call for desperate measures” approach.

One-dimensional assessment:Evaluators often focus on the tangible aspects of a candidate. Rarely, are questions around character posed.  Paul Bruner, a partner at McCracken & Partners Executive Search says, “Boards and Search Committees, for example, often feel uncomfortable exploring issues of character with senior-level candidates.  There is a tendency to assume because an individual happens to be accomplished in their field that they’re naturally a person of strong character.”

Transactional process: Although people-intensive, hiring by its nature is a transactional, time-sensitive and expensive process — especially when pricey recruiters are involved or a major role needs to be filled quickly. Unsurprisingly, the process can easily skip over “soft” issues like character.

Reemphasizing character

Use independent evaluators

It is natural for organizations and evaluators to have bias.  An objective and experienced recruiter can directly probe a candidate’s character, drill deep into references and provide an independent view.

Employ a character “lens”

Target character head on.  Ask specific questions that get to character like: Describe your three biggest work mistakes? Or, list your three core values? Firms can also use role playing to illuminate a candidate’s integrity in an ambiguous situation. Where possible, have two interviewers in the room, with one person posting challenging (but ethical) questions and another reading body language and taking notes.

Optimize the process

Some hiring decisions are mission critical. Bruner advises, “Organizations need to treat key hires like a major investment and undertake the necessary due diligence that includes undertaking multi-person, in-depth interviews and 360-degree reference checks.  Success comes from investing the time and asking the right questions.” Using psychometric testing can also provide deeper insights and confirmatory feedback.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Bridging the new-old marketing divide

In many organizations, two factions within marketing are grappling over a core question:  should their role and plans fundamentally change given the emergence of digital technologies and the multi-channel universe? One team considers social networking merely as another tactic within a larger marketing mix.  The other group sees these same technologies as game changers that will redefine the marketer’s role and programs. At issue is the direction of the marketing plan and the funding & resources that enable it — and ultimately the performance of the business.  Truth be told, both viewpoints are critical for success and need to be inculcated into daily thinking, practices and planning.

For simplicity sake, we can reduce this battle for marketing’s soul down to two competing stereotypes:  Mike is an old-school marketer whose mindset emphasizes control of message and channels, and focuses on traditional research techniques and conventional metrics like customer awareness, acquisition and retention. Managers like Mike are comfortable with a “ready, aim, fire”  broadcast model that relies on studio-based agencies to develop creative and push it out through media buys. He recognizes the potential of new technologies but needs to see tangible ROI, proven success stories and strategic fit before committing a substantial amount of his tight budget and time.

At the other end of the spectrum is Lynn, a new-school” marketer in her early thirties. She fully embraces the ubiquity and power of mobile computing, social networking and rich media, because she lives it. Her Millennial-focused strategy looks to engage web-powered, trendy audiences on a 1:1 level wherever they are.  Lynn’s digitally-focused tactics look to leverage user-defined content, community-building and sharing.  A consummate experimenter, Lynn is challenged determining the ROI of new technologies and getting her programs funded in mature companies.

According to best practice research and our experience, marketing performance will be maximized when both Lynn and Mike’s thinking are part of the whole team’s DNA and practices. The key is to find the right balance between their approaches and get them to work collaboratively.

Advice for Old Schoolers

Open up the creative process: Great ideas and content can come from anywhere.  Marketers need to open up their broadcast-content model and consider more of an editorial approach to developing and managing their message in conjunction with customers and influencers.  This requires them to adopt new skills like brand story-telling, facilitating and integrating multi-channel conversations and fostering shareability, tailored to each digital platform.

Engage the customer: Millennials and other customer segments can quickly change their buying behaviour (think mobile commerce), habits and beliefs as a result of technological developments.  For example, many of these people are using new technology to skip advertisements.  Instead, many consumers look to be part of an entertaining, meaningful and authentic conversation where the brand is part of the context and not necessarily the focal point.

Embrace speed: The traditional slow and plodding approach to developing and implementing marketing programs is becoming anachronistic.  Old schoolers need to figure out ways to get their creative and programs out quicker (even it is not polished), more broadly and tightly integrated across all channels.

Experiment regularly: New technologies and methodologies give marketers an unparalleled ability to quickly and inexpensively test new ads, creative and promotions as well as refine existing programs and websites.  Marketers should prioritize continuous improvement initiatives as well as explore breakthrough innovations.

Advice for New Schoolers

Be analytically rigorous: You don’t jettison proper financial and consumer analysis because Facebook offers new functionality or Instagram suddenly takes off. As digital marketing moves beyond the novelty stage, its programs should be expected to demonstrate hurdle-rate ROI and be aligned to the consumer and marketing strategies.

Use the right metrics: Many of the popular digital metrics like re-tweets and Likes cannot be linked to real business results. New schoolers should measure the impact of social sharing by using innovative metrics like ‘positive-neutral-negative’ ratings.  These can provide a more accurate picture of program success and word-of-mouth impact and better link to strategic goals.

Consider context: Without a doubt, content is important.  Increasingly, brands will also need to take into account the digital context of where they will live and propagate. Marketers need to leverage the right context for consumer conversations and content sharing. Companies like Virgin Mobile and Coca-Cola do a great job of producing interesting content and brand stories tailored for the characteristics of the platform.

Heed the Old Schoolers: Remember that marketing was around long before the Internet. New Schoolers would be wise to study the lessons of pacesetters like Michelin Guides (original content marketers), Harley-Davidson (community cultivators) and Disney theme parks (pioneering experiential marketers).

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

The best way to motivate employees

Unraveling this mystery has challenged companies in every industry for decades.  Managers can utilize “carrots” (e.g., increased pay, promotion), “sticks” (e.g., censure, demotion) or insecurity (e.g., threaten recession-induced layoffs) to increase performance.  However when it comes to some individuals and cultures, these strategies often fail to yield the desired results.   New research summarized in Harvard Business School’s Working Knowledge newsletter outlines a better approach.  The study’s author, Professor Ian Larkin, believes that firms can better motivate employees by leveraging the desire for peer recognition. 

Keeping up with the Joneses

You don’t have to be a psychologist to know that people instinctively measure their own standing, satisfaction and performance relative to others.  In a variety of studies, Larkin found that this trait is the most powerful workplace motivator.  According to Larkin, “…in deciding how hard we work and how well we think we’re performing, social comparisons matter just as much [as financial incentives].” Comparing themselves to their peers incites employees to work harder in order to be recognized or to maintain prestige. Absolute compensation does matters, but only to a point.

Follow the leaders

Larkin studied the impact of social comparison at a large enterprise software firm.  Hundreds of salespeople were offered one of two reward choices.  One option was to defer receiving a commission on a sale till the end of a financial period.  Deferral enabled the salesperson to receive a bonus payment but prevented them from recording a sale for a “Club” membership, a select group of the highest performing sales people. The other option was to record the sale and commission right away.  This choice disqualified the salesperson from the commission bonus but improved their chances of attaining “Club” membership, which though prestigious, carried no meaningful financial benefit.

The findings were telling.  Salespeople would forego the opportunity to make extra money if doing so would earn them positive recognition from their peers. Specifically, a sales representative was willing to give up nearly $30,000 in bonus (approximately 5% of their pay) to join the “Club.” Larkin believes club members “were not more likely to be promoted, leave for a better job, or make higher commissions in the future. It really was all about the recognition of and comparison with their peers, and many of them were willing to pay for it.”

The downside of comparison

On the other hand, social comparison also can lead to insecurity-driven cheating. Larkin studied author behavior in the large Social Science Research Network, an academic paper archive where authors can track statistics on how many times their paper has been downloaded, cited and viewed.  Researchers found that authors were more likely to download their own papers repeatedly when a colleague’s paper was performing especially well on the site, or when a very similar paper to an author’s was newly released and received significant downloads. “Again, what was surprising to us was how little we found in terms of the economic reasons for doing this,” Larkin says. “By far, the biggest predictor of this behavior was fear of being socially inferior to one’s peers.”

Management implications

This research has significant ramifications for talent management.   Companies need to more deeply consider the important role of peer comparison – now supercharged thanks to social networking – when designing compensation and measurement plans.  Paying each employee solely according to his or her performance can backfire, since it can lead to resentment or unethical behavior by workers who believe they are underpaid compared with their colleagues. In order to better motivate employees, firms may want to consider more uniform and standardized salary scales, combined with ancillary incentive programs and contests that exploit the positive effects of social comparison.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.