7 Steps You Need to Take to Develop a Strategic Plan…And You’ve Already Done One of Them

7stepsI had been hired by the tourism department of a large Native American Tribal government to help them develop a strategic plan. They had a largish budget and had raised the visibility of tribal lands and attractions but there was no rhyme or reason. They engaged public relations firms and bought airtimes and ads on whims.

So we met and for the period of two days we worked through the process of developing some systematic strategy for reaching the department’s objectives, for marching toward the vision. As the intervention concluded, a follow up meeting was scheduled. The participants then retreated to their respective offices.

At the follow-up meeting I discovered that no one had retreated to their office or cubicle to work on plans or schedules to implement the strategic plan. No, indeed. They had retreated there to write a report on our meeting. The scheduled follow-up meeting was the occasion to discuss the reports written about the previous meeting. Their forward movement had become a backward look. I wish I could report that the follow-up rehashing of the previous meeting was a one-off event, but it wasn’t. It seems they preferred reports over action, a paralysis that afflicts many organizations.

Strategic plans are a bit like vision statements. They tend to get momentary hype and visibility then die a slow death in someone’s file cabinet. Look at W.T. Grant, Minnie Pearl’s Fried Chicken, or Branff Airlines. All three companies are gone and, at the time of their demise, all three had 3 common factors – they didn’t manage the company strategy, the corporate organizational policy did not function, and they perpetuated failure until it was completely fatal.

Contrast that with IBM which has undergone considerable transformation since its beginning as a business machines company. General Electric, Xerox, Mazda, and IBM all share the opposite 3 factors – effectively managed strategic planning, a corporate organizational policy that works, and success.

There are 7 steps for developing your strategic plan…and you’ve already done the first one (or at least you should have by now).

  1. Develop your vision statement.
  2. Develop and define your values.
  3. Examine and assess your situation.
  4. Develop and define goals.
  5. Develop, define, and schedule objectives (they are not the same as goals as I will explain).
  6. Develop the devices, systems, processes, and methods for achieving objectives and reaching goals.
  7. Develop and implement a feedback loop to systematically  evaluate progress, highlight problems, and implement solutions

See there, nothing exotic or excruciating. You’ve already done the first one because I’ve been discussing it for several days. I’ll begin with Step #2 on Thursday.

Think strategically, act deliberately

 

courtesy FreeDigitalPhotos.net
courtesy FreeDigitalPhotos.net

The vision you and/or your company or organization have articulated sets up the target. How you get there is up to those in positions of leadership and management. However, it is not entirely up to you. It requires the agreement, cooperation, and participation of everyone.

The vision will not create itself. What is done today directly impacts what happens later.

-Colonel Bruce B.G. Clarke, in his paper “Strategic Vision,” delivered at the Carlisle Barracks: U.S. Army War College, 1994, wrote that:

“Strategic Vision is a mental image of what the future world ought to be like. (The prophet’s view). Development of a strategic vision is preceded by forecasting the actual, matter of fact, realistic and pragmatic future to create an estimate of what the future is likely to be. In doing this, the strategist looks at history, the current situation, and trends. Strategy is the crossover mechanism for moving from the world as forecasted to the world of our vision. Strategic vision provides direction to both the formulation and execution of strategy. It makes strategy proactive, rather than reactive, about the future.”

 Note the last sentence. “It makes strategy proactive, rather than reactive, about the future.” It is not a wait and see what happens approach. Not at all! It demands that we as leaders take the initiative and develop over-arching plans that will move us, the company, and/or our department toward that vision we’ve so carefully articulated and so fervently embrace.

 Proactivity reigns over reactivity. The military often admonishes that “hope is not a valid strategy.”

 So what is?

 Think strategically but act deliberately.

 Jack Welch, former head of General Electric said that,  A strategy is something like, an innovative new product; globalization, taking your products around the world; be the low-cost producer. A strategy is something you can touch; you can motivate people with; be number one and number two in every business. You can energize people around the message.

 If you haven’t done so already, begin to see your role from a military perspective. You have an objective of what your world will be like when you win the war. Now, how are you going to win it?

 Simply lobbing shells out there somewhere or throwing soldiers at the public is not nearly enough. Neither will positive thinking slogans work. To do so is to substitute hope for strategy.

 It takes far more careful consideration of how to win the battle which should be done…and redone…and redone as time passes. But no action should be initiated nor should it be maintained in the “hope” that somehow someway it will get you to the goal.

 Leadership is a proactive responsibility. I am going to guess that too many who read this are, when they examine their daily tasks, reactive. They go from one problem to another, solving one crisis after another, and putting out fires. The question is, does it make sense? Does it mesh with the overall strategies you’ve enacted? Solving problems can be good if those problems have arisen in the hand to hand combat of daily implementation of your strategic plan. But solving problems can be bad if those problems have not arisen from the tasks (Tactics) used to implement a strategy. If that’s the case, you’re living in the fantasy world of hope. Short-terms thinkers think and work by what rises and falls each day. Long-term strategizers deal with incidents as they arise but they maintain perspective. They know which targets to shoot at and which to leave alone.

 Think strategically. Act deliberately.

Look forward but work backward

basic diagram strategyI’m filling in my by-now-famous diagram from the wrong end. Actually it’s the right end, but since all the words are on the right side, it is technically backwards. And I’ve done so for a reason.

Vision is a forward look, an articulation of what the future should be. That’s relatively easy. The challenge is getting there. I’ve started with this because I believe it is necessary to begin at the end. No journey should be planned until you’ve settled on where you will end up. Pleasure trips may have the leisure to simply see where the road may take you. Business does not.

The great business guru Winnie the Pooh said “Pay attention to where you are going because without meaning you might get nowhere.” This is where leadership becomes especially critical. Having a destination is indeed absolutely critical. Building structures that will get you there is too.

“Strategic Vision is a mental image of what the future world ought to be like. (The prophet’s view). Development of a strategic vision is preceded by forecasting the actual, matter of fact, realistic and pragmatic future to create an estimate of what the future is likely to be. In doing this, the strategist looks at history, the current situation, and trends. Strategy is the crossover mechanism for moving from the world as forecasted to the world of our vision.

Strategic vision provides direction to both the formulation and execution of strategy. It makes strategy proactive, rather than reactive, about the future.”

–Colonel Bruce B.G. Clarke, “Strategic Vision,” appendix 1, part 1 in Strategic Vision and Strategy Formulation: Capstone Exercise. Carlisle Barracks: U.S. Army War College, 1994, p. A-2.

So, we need to look forward, but work backward.

Peter Drucker’s admonition that “the best way to predict the future is to create it” is spot on. It demands the implementation of strategies that will make that wonderful vision real.

But, hold on. Don’t just engage in any tasks, even those that might be familiar. Planning and implementation of activity requires strategic thinking. Max McKeown argues that “strategy is about shaping the future” and is the human attempt to get to “desirable ends with available means”.

Therefore I define strategy as:

“The science and art of conducting a campaign on a large scale; a plan or technique for achieving some end.”

  1. Strategy is not a task list. It is large scale, long-range planning and development.
  2. Strategy is why and what not how and when. How’s and when’s must come AFTER strategies have been developed.
  3. A strategy is a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully. Doctrine is used here, of course, in the non-religious sense. Doctrine is a set of beliefs and values that shape who we are, what we do, and how we will be known. Doctrine shapes the nature of our business and influences motivations and methods alike. More about that in coming posts.
  4. Strategies therefore vary from place to place and from time to time. Before borrowing another’s strategies wholesale, be careful to determine if the circumstances there match or closely match yours here. A better practice is to extract the principle and make a personalized application. The American marketplace is different from others. Even within the US therea re differences that need to be considered.
  5. Because they never lose sight of the objective (vision), effective strategies usually (but not always) originate from leaders. The principle of line of sight (read more about that here) applies. Leaders see farther and more clearly (at least they’re supposed to. If they don’t one must question whether leadership actually exists within them) and are therefore better equipped to determine strategies.
  6. A strategy is only an expedient, a means to an end, and is therefore expendable. Methods, systems, process, activities are devices employed to move the company or organization toward the vision. Don’t carve them in stone and never place them on an altar to be worshiped.
  7. A strategy is important but not too valuable to be adapted.  Vision is. Once you’ve set your eye on the prize, never vary from your commitment to be faithful to it and strive for it. How you get there can and will vary. No strategy, regardless of how well it is thought out, how carefully contingencies are planned for ever survives contact with the real world without alteration because it is subject to unforeseen events and the independent will of others.

Vision is a forward look. But your work begins by working backward. Once you know the ultimate, what has to happen before that? And then what has to happen before that? Before that? And …well, you get the idea.

Creating the future

contrctor_blueprints“The best way to predict the future is to create it.” Peter Drucker

Vision, as I have defined, illustrated, explained, and elaborated upon is the number one critical component of an effective leadership dynamic if, and I mean a big IF, IF it is coupled with decisive deliberate intelligent relevant action.

Way back in the early posts for this series I said that we are caught in tension between the forms, products, systems, and processes we as leaders have inherited and our constituents increasing lack of response to them. Let me add another qualifier. Sometimes the activities that fill our days have no relevance whatsoever to the vision so proudly posted upon our walls and promotional publications.

Their irrelevance might be due to technological obsolescence. They were important at one time and technologically necessary but are no longer. The driver’s license office in the U.S. Virgin Islands still collected passport size photos long after they had been replaced with new digital cameras and printers. When I asked what they did with the photos, I was told they simply stapled them to the paperwork and sent them to the main office. When I asked why they still collected them I was told it was because it was on the checklist of things required and tasks to do for each applicant.

Their irrelevance might be due to too tight a focus. Blockbusters comes to mind.  They thought they were in the video and DVD business and let that too narrow focus blind them from the real business, that of in-home presentation of movies and games. As a result, Blockbusters is gone, Netflix is here, Amazon Prime and those offering downloadable entertainment are here.

Vision, once it is properly thought out, defined, and articulated, is paramount. It becomes the standard by which anything and everything within the boundaries of the company, organization, or department is measured and either qualified or disqualified.

This is where the next component in the curriculum of my series comes in. The vision must ever and always be implemented in real time. However, if vision and its objectives, and the targets you erect remain vague enough, no genuine or quantifiable measure is possible. Thus, any movement in just about any direction can be deemed to be progress. This actually satisfies a great many leaders who’s comfort with being busy crowds out the imperative to be prudent.

Consequently, movement or activity itself becomes the sought after activity. Whether one advances toward the vision or not becomes irrelevant. Perilously, anyone who dares challenge the activity’s validity as measured against objectives becomes the issue, not the lack of progress. We shoot the messenger because s/he’s brought the irrelevance of our commitments to light.

It happens over and over and over again in all kinds of organizations – big and small, profit and non-profit, religious and secular. Once a slate of activities becomes established it is very likely you will encounter resistance, sometimes significant objection and sabotage should you decide change is necessary.

“The best way to predict the future is to create it,” said Peter Drucker. I began with the quote and I’ll finish up with it. The future cannot be neither readily created nor expeditiously implemented without a fervent commitment to continual evaluation. Creation demands a creator.

That is you and that is your job. The mantle of leadership requires a creator’s attitude and perspective.

Beginning with the next post I will reveal the two elements of effectively implementing vision. Until then, let me ask of you one thing. Between now and Monday, take a careful look at the vision to which you are committed and then examine the daily, weekly, monthly, and quarterly tasks you and your staff complete and see how well they measure up.

 

6 secrets to keeping your team working for the same goals.

road closedDoes your right hand know what your left hand is doing and why it is doing it?

In assisting organizations, businesses, and individuals in developing and implementing an effective vision one of my first questions is what is your vision for this company? After hearing their definition, I will ask the department heads, the associates and assistants the same question.

It is seldom the same answer. But it should be. The right hand knows not what the left hand does or why.

This is the inherent problem with vision statements. They tend to arrive from somewhere up the chain, migrate onto a plaque or posters hung on a wall, and fade from memory.

Why am I harping on this?

Because the people who work for you and with you are, for the most part, intelligent, conscientious, ethical people. (I know, I know, there are some low level employees who seem incapable of processing anything so far-sighted as a vision statement, but I’ll address that condition later.) The people you’ve recruited and hired are responsible and you have every right to expect them to honor their sense of responsibility. They deserve to know what the vision of your company is, will better serve the company when tey know it and what it means, and are better served by the company when there is consistency between what you claim to be and what you actually do.

So, processing the IMPLICATIONS of a vision statement is not unrealistic if, and it’s a big if, those implications are defined and explained in real terms.

So here is what I recommend:

  1. Take the vision down off the wall and burn it into the collective and individual consciousness. The vision cannot and must not be a mere corporate or organizational document relegated to the archives. It must be something every person who makes up your organization understands and can connect to real work and life in the company. Repeat it often, apply it always.
  2. The vision must become part of your brand. They don’t call it branding for nothing. The brand, which in cowboy circles in burned into a cow’s hide so anyone and everyone who sees it know whose it is and what it represents. There must not be disconnect between what you say you want to be and what you are. This causes cynicism to displace enthusiasm. The brand becomes confused.
  3. Do not displace the vision with platitudes. It seems that every industry and every organization, even religious ones, develop their own dialect and promote the use of jargon. “Bringing the whole world to the foot of the cross” sounds so noble but is not anything everyone can grab onto. Platitudes and jargon often deliberately keep the relationship between the vision and the activities that make up the day fuzzy and indistinct. As you will learn the next several posts, the vision directly impacts what everyone does and why they do it. Effective leaders are scrupulous about making the connection and making sure everyone understands how this job relates to that statement.
  4. Find ways to regularly determine if everyone on your team is on board with the commitment to vision you’ve made. If not, why not? Do they not understand it? Do they not agree with it? Check out this blog post where I explore this more.
  5. Restate the vision in other than its written form so others can see how comprehensive it is. When a customer found the window coverings specialist at Lowe’s, that specialist was discussing her department with the assistant store manager. The customer complained that his order was complete and installed except for one small part which was still not installed even though it had been 5 weeks since he reported it missing from the original order. “Take care of your customer,” the manager said to the specialist. “Lowes takes care of its customers.” This is incarnating the vision in everyday activity and relationships and it is the primary venue wherein that glorious sounding statement on the poster meets real life.
  6. Celebrate incremental advances toward the vision. This is one of your most powerful tools as a leader. When you connect what an employee or associate does and make the celebratory connection to the overall objective it powerfully displaces cynicism (see #2 above) and replaces it with a sense of success. Everyone wants to be part of a winning team. Keeping score lets everyone know just how well they are doing (another reason I hate 6 month performance appraisals if that 6 month interview is the primary time you talk to your people). Read Ken Blanchard’s One Minute Manager if you want to see how this is done.

It’s time for your own personal performance appraisal. How well are you doing each of the above 6 jobs? If you thought your job was primarily with numbers and forms, how does knowing these 6 things change your perspective about your work and how does it alter your task list today?

There are a lot of things you can measure. Vision is not one of them.

basic diagram Vision onlyVision can be qualified easily enough, but I think it is a mistake to quantify it. Let’s go back to Lowe’s vision statement, one I referred to in earlier posts in this series:

We will provide customer-valued solutions with the best prices, products, and services to make Lowe’s the first choice for home improvement.

There is no counting device or mechanism anywhere in that statement that one can measure. There are, however, targets that one can shoot for. “Best Prices” can be analyzed at any time and indeed should be because markets are never static, always changing. Indeed, I know for a fact that managers and specialists from Lowe’s visit Home Depot’s stored every day as do Home Depot’s reps at Lowe’s. There is nothing wrong with that. Price matching has a long history in American commerce.

“Best products” and “best services” and other targets have qualitative but no internal quantitative measurements. That’s because a company’s vision is something to be moving toward but never reached. We strive to get there but never want to say we have attained it. Thus, effective vision statements use qualifiers like best but not quantifiers.

However, do not think that measuring is irrelevant. It is not. One must, as mentioned above, determine what best means and when to determine that one’s prices, products, and/or services are indeed the best. Thus a vision should not say to sell $500,000,000 of product in one year. That is a goal best left to sales and accounting, an entirely different slice of the managerial and leadership function.

So what does one measure? Progress toward the vision and just how well the activities that make up the jobs actually do propel the company or organization toward it. Many times, too many times it does not. See illustration #1 above, an illustration I will use for the next several posts and fill in the blanks as we go along. The company vision defines the values we strive for, the attitude we manifest, and the position we wish to occupy.

Effective leaders then find ways to get there and that is what and how I will discuss in the next posts in this series. Vision tells you where you are heading and, as you have discovered, that is the easy part. The tough job is making certain that all the many things you do every day, all the many avenues you explore and projects you pursue, actually do move you and everyone else in the right direction.

The principle of risk management

riskLet’s say for the purpose of this article that you have a position open and a slate of applicants who possess approximately the same list of qualifications, what do you do?

You start looking at qualities. Certain qualities are important in almost any job but particularly critical when working in a service industry or in a group. If you’ve been reading my blog for very long, you might remember one article where I recounted the story of a highly skilled woodworker who applied for work in my shop but who was also not hired because of a reputation for being impossibly difficult to get along with. I wanted abrasiveness only in sandpaper, not in personnel.

So the catch phrase here is

Hire for attitude, train for skill.

Yes, aptitude is important. Yes, credentials are vital. And yes, education and experience are critical components. Assuming the applicant has the proper educational qualifications required and the necessary certifications if any are required the deciding factor should be in attitude.

I don’t want to discount education, certification, and/or experience because you cannot train someone to do a job if they lack the basic skill sets necessary. Education and experience will validate that. Attitude, however, cannot be easily taught.

Now the reason I even bring this up in a series on motivation is the principle of risk management. Hiring someone is a risk for the company. Going to work for someone or for a company is a risk for the employee. Motivation is so personal, emotional, and psychological. It is a feeling. It simply becomes next to impossible if there is not a good fit.

Risk management demands an assessment ahead of time and on-going assessment over time.

A sense of community, a neighborhood in which employees and associates fit, exists at a very local level, within the confines of a very small area. Loyalty is decided and played out in a relatively small group.

This brings up the problem of employee turnover. This is costly in all businesses, can be nearly fatal in small ones when one upon whom a large portion of the income producing potential of the business rests, leaves the business.

There are 7 costs to be considered:

  1. Reduced productivity – the employee or associate was doing something (if there is no loss when the person leaves, either the person was not contributing or the position was unnecessary). If they were doing something, they are not doing it anymore so output is reduced.
  2. Overwork that now falls to others – this compounds demotivation because they feel resentful at being expected to pick up the work without a commensurate raise in pay.
  3. Knowledge that has walked out the door – experience has value. The person that is now gone had knowledge about the way things work. All the training you invested in them has walked out the door and it must be done again.
  4. Connections that are now broken – this is especially true in sales positions and in positions where the person had developed expedient relationships with vendors, officials, suppliers, contractors, anyone who made the machinery work more smoothly. It gets worse. The left person may well take customers with them. That’s money that has walked away, too.
  5. Severance, benefits, unemployment insurance costs. Administrative costs to modify benefits, COBRA notification, stopping payroll, and all those forms that are usually completed to cover all the potential liabilities.
  6. Training that now must be done again – see #3
  7. Recruiting and hiring costs – including advertising, interviewing, researching, background checks, drug checks, and other incidental costs.

Drake International has created a Cost Calculator you can access here (there is no charge to use it.)

Risk management permeates the very fabric of an organization. High employee turnover signals a problem somewhere. High employee turnover among key personnel is almost always a sign of a problem somewhere in the management or leadership personnel. If an employee leaves because of a personal problem 0 they are moving to another city or state, a health or family issue, or something that can be directly and definitely attributed to a reason OUTSIDE the company, the issue is probable not motivational. If they are leaving because they screwed up on the job, the issue is probably not motivational although it could well be a problem somewhere in the management or leadership of the department or company. If they are leaving because the company is downsizing in general, the problem is not motivational. If they are leaving because of any other reason, the issue is motivational.  Do what you can to make sure an employee’s departure is not your fault. It costs too much.

Hire for attitude, train for skill, never ignore the risk.

The principle of systems and controls

helpTwo nights ago we went with some friends to a local burger joint. It is not a fast food place like McDonalds but it is part of a chain. It was the dinner hour and the place was quite busy. After being seated, we settled in to wait, quite a long time as it turns out.

When the waiter did arrive she took our orders, writing each one down, and reading them back to us. However, it appeared from her nervousness that she was new on the job. Since we did have a scheduled event to follow dinner we didn’t have all night. But we’d allowed ourselves plenty of time, we thought.

After quite a while not even our drinks had arrived back at our table. It was obvious from the commotion all around us at the other tables that things were going very wrong. When the orders did arrive, they were all incorrect. Every one of them.

When I looked at the check, a computer generated account of what’s been ordered, I discovered that our specified orders had not been entered. But from her general demeanor and the general flurry all around, it seemed obvious that the waitress was not incompetent, she needed training.

When I took a job at Lowe’s, I sat in a training room for almost a week working through a series of computer generated training modules the intent of which was to prepare employees for work on the sales floor. I soon discovered that what was in the training modules had little resemblance to real life. After I finished the modules, the HR man took me to my desk, pointed to a computer and said, “You’ll catch on.”

Tom Peters and Robert Waterman discuss a particular management style they call “Let alone zap.”  It means employees and associates are left alone to fend for themselves until something goes wrong, then a manager intervenes to harshly and suddenly reprimand.

But I am in the middle of a series on motivation called Flipping The Switch and in a mini-series within that series using principles of banking and finance as guides to effective motivation too.

So what does all this talk about waitresses and Lowes have to do with the topic? You may recall in the article on demotivators, a major one is when an associate or an employee feels overwhelmed. It may mean the skill sets required for a particular job are not there or it might mean they need more training.

In restaurants an experienced waiter usually accompanies a novice until they learn the ropes. There must be in place a system of systems and controls so that all aspects of the business are covered at all times. I am not suggesting that managers and leaders must maintain omnipresence. They can’t. What I am suggesting is that managers and leaders know precisely and exactly what has to be accomplished (the objective), how it happens (the process), and who will do it in what manner (the personnel).

In a list form it is these things:

  • The objective(s) to be reached.
  • The process by which we get to them.
  • The people who will make it happen and what needs to be done with them to get them to be able to do it.

Too often the whole thing is too fuzzy. “You’ll catch on” is not an effective strategy.

In the world of finance, records and reports enable managers to determine what is going on. In the world of people management, the same principle applies. Those reports can be written, verbal, or both. The critical factor is that the reporting be taken seriously.

Those who make the reports see a connection between what they do and what they report. They must never feel that the reports are irrelevant. Demotivation sets in when there is not seen a correlation between what they do and what they report on. The numbers or analysis must have a personal meaning.

Those who survey the reports know what they’re reading, what to do about what they read, and then do something about it. If the reports are good, celebrate. If not, then what?

Remember the difference between discipline and correction. Disciple reprimands for behavior not up to standards. Correction acknowledges behavior not up to standards but instead of merely reproving, it uses the incident to provide training and redirection.

Systems of reporting and control have one more benefit. (NOTE: There’s lots to be said about this subject so do not assume that what’s written here is all I have to say about it. This post is limited to the subject of motivation and manipulation.) One key motivator is autonomy. People feel they have at least some degree of self-management.  But, autonomy is one thing, abandonment and indifference is another.

The waiter I mentioned above looked abandoned to me. She will soon become highly demotivated because success breeds success but nothing advances failure like floundering. Learn quickly when to intervene and when to not.

Systems and controls motivate because it lends the sense of control to everyone involved. Motivation is an emotional and psychological effect reached and advanced in part by mechanical and procedural methods. They provide tools, structure, and one more big component – perspective. Systems and controls put everything in focus and in balance.

That’s why coaching is such a valid vocation. It puts a trainer (that’s you) in the position of seeing the end from the beginning and enabling your associates and employees to get from here to there successfully. Winning players tackle problems more enthusiastically, overcome challenges more creatively, and win games even more often.

The principle of promissory note

broken eggYou see them too if you ever scan the listings. I am talking about the jobs sections of Craigslist. You can make thousands of dollars working for an unnamed company whose application address is a blind one.

This is a common theme of mine.

The setting was a private school. The newly installed headmistress faced a tall pile of unresolved challenges. The school was not a wealthy one but did allow for some reduction in school fees in exchange for volunteer commitments from parents. Therein lay a problem.

The new headmistress was confronted daily with parents who simply did not show up at their scheduled times to shoulder their promised responsibilities. Most didn’t even telephone in to say they weren’t coming. When the headmistress began to hold those parents accountable, one of them said something incredilble.

“We’ve never had anyone who actually expected us to do what we said we would do.”

Keeping promises is critical in every relationship. You cannot build a solid team on unreliable people.

In fact, a national poll released just this week (December 2, 2013) shows that most American do not even trust each other. So bad has it become that we not expect to be misled and let down more than we expect to be told the truth and given promises someone will actually fulfill.

In the first installment of this mini-series, I wrote about the principle of good faith, that law that assures people who work with us that we are worthy of their trust. A relationship, even those on the job, are like banking, loans, and bank accounts. They are built on the unexpressed but nonetheless vital principle of mutual trust.

Whenever I hired people for my businesses I would tell them that I hire people to solve problems not make them. I had no need to pay people to create problems for me because I am more than capable of creating ample quantities on my own. I also warned them that I had a zero tolerance policy for no shows. “If you don’t show up and if you don’t call me, then don’t come back.” If people I hired could not keep that simple requirement then they could not earn wages from me. And I enforced it.

Here’s why.

When you do what you say, others learn that you mean what you say. Never promise what you cannot deliver. Never make rules (like my “don’t show up” rule) and fail to enforce it. If you do, others will learn the very first time that your word in meaningless. Motivation drains away when that happens.

Keeping promises you make and holding others to promises they make synergizes to make a key ingredient that is mandatory for long-term relationships – RESPECT. The esteem and regard held by others towards adds to our line of credit. They grant us greater authority. If there comes a time when you cannot keep your promise, do not simply ignore it. Speak clearly and honestly to those affected and never try to BS your way through. It will only make it worse. When we have respect for those who work for us and with us, we regard them too highly to do anything less than be completely honest.

This principle is called promissory notes because it communicates the image of obligation. Indeed, the fabric of civilization is woven with the threads of personal responsibility and fulfillment of obligations.

The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office. Dwight Eisenhower

The principle of foreign exchange – 6 mistakes motivators make

foreign exchangeIn the first article in my Flipping the Switch series, I wrote about a sales manager frustrated with a top performer on his team (article here). The problem came about because the sales manager and the salesperson in question were after two different things.

The article immediately before this one (the Principle of Positive Balance) I likened a working relationship to that of a bank account. Leaders and managers build a positive balance in their associates and employees by what they do. I admit, a prime objective of this is so we will have a reserve to draw down  in the event of a problem, emergency, or crisis. Too many of us try to function with a near zero balance, always at risk of overdrawing, which places undue and unnecessary stress on the relationship.

The Principle of Currency of the Domain means that you are making investments in things that are of perceived value to the associate, staff member, and employee. The operative word here is perceived. It is simply not enough that we offer incentives, rewards, inducements, values, or anything else intended to incentivize the people who work for us.

It is their perception that matters, not just yours. Oh sure, you can mandate that someone respond to something we offer, but don’t be deceived that they will feel the same way about it just because you say they should. Trying to do that is tantamount to announcing that the beatings will continue until morale improves.the-beatings-will-continue-until-the-morale-improves

In 2012, Lowe’s Home Improvement Centers suddenly eliminated spiffs and commissions for their sales specialists. Especially hard hit were the appliance people. For most of them  their take home income dropped by tens of thousands of dollars. The store explained the sudden change like this:

We know that having an irregular income can be challenging for you to manage because you do not know what each pay check will be. So, to make it better for you we’re eliminating those pesky spiffs and commissions. We will take the total spiffs and commissions you earned for the past 12 months, divide that amount in half, then divide the sum by 26 and add that amount to your pay. After all, we all have to sacrifice for the good of the enterprise.

When the new wage structure was explained to the sales specialists, the manager of more than one store said it was “a positive move going forward.” Large numbers of experienced, productive sales specialists summarily left the company. Why? They did not perceive it as a positive move going forward.

You must reward people in the currency of their domain. It must be something they value, something they can understand and appreciate. In one episode of MASH, the American TV series about a mobile army hospital in Korea, Dr. Charles Emerson Winchester tried to pay a debt with a porcelain vase. The good doctor saw it as a valuable antique piece from an ancient dynasty. The man he owed the money to saw it as a simple dime store pot. What one placed a high value upon the other saw as virtually worthless.

When people work for us, we are indebted to them. They work BEFORE they get paid so we are always in arrears to them. But the curious thing about working is that workers put in more than time. They invest talent, skill, personal worth, and long-term viability with us. When we motivate them we can never forget he sovereignty of THEIR domain and the need to conduct transactions in “currency” acceptable as a medium of exchange in their kingdom.

We have given a lot of thought and written millions of words on the subject of empowerment. It became a corporate mantra for a while with managers and leaders falling all over themselves to assure everyone that they were committed to empowering their people. Sadly, few considered the currency of the domain. FYI – This is a major problem with marketing too. We package and present products we think the customer ought to like. Manipulative people are really, really guilty of this and resort to a number of devices to get people to do what they want those people to do, all along chanting that this is being done for the good of those people. Politicians are particularly inclined to this.

So, what and where are the pitfalls? I have listed below 6 mistakes we make to remember when setting up a foreign exchange bank in your head.

  1. Assuming education equals ability. You may have an advanced degree but that does not make you smart enough to manage people. If we are not careful, advanced years of formal education can blind us with an intellectual elitism. We tend to think of employees, associates, and staff as less intelligent, less perceptive, less understanding. We tend to expect them to allow us to determine what’s really best for them. We must replace that with a higher degree of respect for those who work with us. If we do not we can never understand why they are not as motivated as we think they should be if only they would listen to us. We might then be genuinely convinced that “this is a positive move going forward” when we’ve instead seriously impacted their health and well-being.
  2. Ask people to sacrifice their advantage for your benefit. Sacrifices are for real battles fought for country or for noble causes in charity, religion, and non-profits. Even then the individual must perceive some value and reward. For most of us, the people we employ need a job. They’ve probably believe they’ve made enough sacrifices and are looking to a positive cash flow.
  3. Assume they are stupid. They aren’t and can see through it. When Lowe’s made its decision they apparently never assumed that people could readily and cynically see through the gloss to the bitter reality that while the suits in North Carolina would get more, they were going to get less.
  4. Try to rationalize. See #1. It only makes us look stupid when we try to do so. Just tell it like it is, empathize with those for whom our actions will have an impact, and do the best you can to fix it.
  5. Forget that the reward or incentive must mean something and continue to mean something. Never be guilty of neglecting to build the future on the foundations of the past. If you have a top performer, it does not hurt to continually laud achievement. Too many managers and leaders neglect that communicating instead that “I know you had a good week last week but what have you done for me today.” This does not motivate to do more. It communicates that one has never done enough. Our associates and employees will not keep reaching for the carrot just out of reach inconsequentially. At some point they need a bite.
  6. Failure to personalize everything. They are not going to do things “for you” for very long. Eventually they will personalize everything. Americans are particularly independent. Call it self-centered if you want, but it is human nature to seek out personal advantage. Remember WIIFM – What’s In It For Me. Associates must know that somewhere there is a personal benefit. If not, your efforts are only attempts to manipulate.