Investing in ‘listening’ has financial returns

RECENTLY, I was talking with a potential client about what he expected from his people as they headed into a very difficult quarter.

The company has spent lots of money on software training, on lean processes and on time management. So far, he has yet to see any bottom line impact, so he reached out to RapidChange to see if he was “doing something wrong.”

When I took my seat in his office, it was clear he was convinced there was no correlation between a company’s cultural health and its profit.

THE CEO WAS RELUCTANT TO GIVE AN INCH.

“The problem, Dan, is that my people just need to grow up.”

“But what is it that they should grow into?” I asked.

“Spare me the psychobabble,” he said, sharply. “… I’ve been consistent in delivering our message. Telling them again isn’t going to make a difference.”

“Perhaps we can try something different,” I offered. “How about if this time you just listen …”

LISTEN FIRST, THEN SOLVE, THEN MAKE MONEY.

The benefits of listening to what employees need to get their jobs done efficiently and profitably often takes a back seat to the emergency of the day. This CEO’s executives always look really busy. But they are busy putting out fires. That gives everyone a sense of accomplishment each day, but it doesn’t mean you’re making any money.

I know it takes numbers to get our attention. So here are some numbers to consider:

• Recent research by Towers Watson found that companies with low employee engagement scores had operating margins under 10%.

• Companies with high traditional engagement scores had a 14% margin or higher.

• Companies with the highest “sustainable engagement” scores had an average one-year operating margin of 27%.

The differentiator was pinned on a question that asked how well an employee’s manager and the company’s top leaders were perceived at “listening.”

Not enough to convince you?

Gallup’s research shows just 19% of American workers are fully engaged in their jobs. You can read the data and see that few organizations have made it a priority to learn and model the leadership practices known to produce high employee engagement. That could mean that you are harnessing just a fraction of the intellectual capital you are paying for.

Still cynical?

Jerome Dodson, the founder of Parnassus Investments, has the additional role of portfolio manager for the Parnassus Workplace Fund, a mutual fund that invests exclusively in large American firms proven to have outstanding workplaces.

Since the fund’s inception (April 2005-January 2013) it’s had a 9.63% annualized return. This compares to the S&P Index which has earned just 5.58% during the same period. “Treating people well and authentically listening to them does lead to far better business performance. We proved it works,” Dodson said.

Another compelling statistic buried in the Parnassus prospectus: Over the past five years–the height of the Great Recession–the average annual return on the Workplace Fund was an incredible 10.81%.

More? Really?

Top Workplace Fund, started in October 2008 by WorkplaceDynamics, tracks companies that rank among the highest in employee engagement in the United States. To date, the fund dramatically out-performs the S&P 500. (see graph at top)

Supporting your workplace culture to be as healthy as possible just makes common sense. Bad habits become business practices that lock you in place; poisoned relationships create bad decisions; paper-thin internal support winds up costing us external customers.

Compared to investing in new equipment, new software, new continuous improvement programs, investing in your people’s ability to solve their own problems and settle their own conflicts is cheap. And, as the statistics show, the return on investment is positive and it is measurable.

So was the CEO swayed by the numbers? I’m still listening. I’ll let you know …

RapidChange Tools bridge the chasm between generations

In my new book, “Decades of Differences,” I distill the top 10 messages from the Millennial generation, based on surveys and her interviews. What are you doing to prepare your workplace for this new generation?

1. We’ll hold only productive meetings.  Meetings are important but it is rare when they should take more than 60 minutes. A long drawn out meeting really means “we have no idea what we’re doing.” These time suckers actually halt productivity and stifle creativity.

2. We’ll shorten the work day.  We spend 10 hours a day “at work” – meaning commute, lunch, breaks and work. To truly balance work and life, you cannot mess around and waste time at the office. We’re productivity machines; we will figure out how to get work done is six or 7 or we’ll be paid by the project not by the hour.

3. We’ll bring back administrative assistants.  Back in the day, nearly everyone had a secretary. Now even the CEO shares one. Sure, this saves the company a bunch of money, but it is a terrible waste of resources. Two extra hours a day spent filing paperwork, mailing checks and following processes adds up to 500 extra hours spent either not on projects or not with family.

4. We’ll redefine retirement.  Retirement is dead. We realize that there will be multiple mini-retirements and we are beginning to arrange our savings, finances and lives in that direction. We will take multiple mini-retirements instead of calling it quits a few years before we croak. Maybe we’ll take a few months off to travel in our 20s, to parents in our 30s and then when the kids leave maybe we’ll take a year off and launch our fourth career.

5. We’ll find real mentors.  Enough with assigning us to people at random and not giving them any advice, training or guidance on how to guide, advise and train us. We’ll do it on our own. We’ll teach our older co-workers about new technologies and the power of online communities. They will respond by guiding us through the insane office politics that exist everywhere.

6. We’ll respect the HR Department.  Ten years ago, HR got no respect. Today, a handful of companies understand the role it should have at the table. Gen Y recognizes that business is about how people interact. All you need to do is look at Google and its offspring to see that engaged people are successful people and successful people make money for themselves and the company.

7. We’ll promote based on EQ.  Paying dues and knowing your business does not make you a manager. People skills make a god manager. We will be smart enough to promote people because they can manage, not because they’ve been here long enough. For good managers, personal work must come second to developing employees both personally and professionally. If you can’t help others, you don’t deserve a promotion to manager.

8. We’ll continue to value what our parents have to offer.  Sure, Boomers can laugh about it now, but we respect our parents and our parents are interested in our lives, even when we’re in our 30s. So, Boomers we know you hated your parents. Get over it. We don’t. It isn’t about being babied or refusing to grow up, it’s about a level of mutual respect.

9. We’ll reinvent the performance review.  We want constant feedback. Semi-annual or annual performance reviews do not work. We will invent numerous channels for feedback, including project-based and instant reviews. These programs lead to consistent improvement, which is what truly matters.

10. We’ll enjoy higher starting salaries.  Sure, We’re interested in volunteering, putting a halt to global warming and all that other good stuff, but we’re not our idealist parents. We watched our parents get laid off and we know that companies look out for themselves. So we will do the same. That means we’ll come in knowing what we’re worth and willing to go somewhere else if you’re not willing to reach a fair agreement.

Above the Line

Fear and anger on the (corporate) campaign trail

Please forgive me, but I’d like to talk about the recent presidential election just one last time. I know, I know … Sometimes, however, we are just too quick to avert our eyes from a disaster.

No matter your affiliation, there is a big lesson to pull from that mess.

All the millions of dollars spent on getting out the message. The time listening to repetitive debates filled with irrelevant nonsense. The digestive distress from lunchtime arguments that ended in name-calling. The awkward silences when a colleague assumed you were on their side, and they were wrong.

Four exhausting years of all that bickering and we’re pretty much right back where we started.

Presidential election. Yes. But I could be talking about the latest strategic initiative at your company.

Some similarities are apparent: They both cost a lot of money and rarely deliver on their promises. Along the way a lot of data is produced that we don’t really know what to do with. People spend a lot of energy labeling winners and losers, but in the end no one seems to have more leverage.

Some of the similarities may be less obvious: They both take about 4 years (one by law, the other by coincidence). Early on, leaders and consultants predict benefits for each constituent. In the end, the consultants are gone, the prevailing culture does not change and the numbers don’t move much, it at all.

And because someone needs to personify the strategic loss, a leader is designated to reluctantly leave the stage.

Still, the most significant issues remain unresolved and a majority of us say there is a dramatic need for decisions to be made. Instinctively, we know delay is easy but it merely compounds the consequences.

Which brings me to the most relevant characteristic shared by our national debate and corporate strategies: Both political and business leaders are relying too heavily on fear and anger as motivation. Fear and anger quickly drive people into binary camps, creates unnecessary conflict and makes compromise sound like defeat.

People are quick to feel anger and fear, not because we are gullible or stupid, but because of the way our brains are wired. In that sense, leaders are using our biology against us because they know something most of us don’t: when you are even a little mad or scared your brain isn’t working at full capacity.

Think of your brain as having a series of internal gatekeepers. Any information coming at you wants to access the part of your brain that sees patterns, interprets data and solves problems. Turns out that that brain function occurs at the end of all these gatekeepers.

First that bit of information encounters the Reptilian Network. The Reptilian’s job is to make sure you stay alive – that your heart is beating and your lungs breathing – so it is constantly on alert for danger. The hormones that produce anger and fear are the first responders when this network senses a threat, mental or physical. As such, they are designed for speed, not accuracy. In primitive times it was better to fight or flee than to ponder your options and be eaten by the bear.

When politicians or corporate leaders rely on a “fear-first” method, they are betting that speed will be more important than accuracy. That is why we hear so many “burning platform” stories – if we don’t _____ now, it will be the end of ______-as-we-know-it! without XYZ, America will never again be able to ABC! These are forms of fear-first methods that kick in the hormones that make it very difficult for us to apply logic.

Fear and anger have their place. The impulse to act quickly has helped us survive as a species. Unfortunately, they can also make us act without deliberation. A lack of deliberation often leads to the bipolar world we live in, where compromise seems difficult and actual solutions seem an after thought.

Our companies are merely collections of people and at a lot of companies today we are seeing these same behaviors. Intelligence, deliberation and passion are being usurped by brute force and cynicism. Biologically and organizationally this is not a sustainable strategy.

For companies and individuals to grow, leaders have to overtly and intentionally nudge their culture away from fear and anger and toward safety, respect and engagement.

For there to be success, there must be ambition. Ambition is fired by possibility, not by fear and anger. In the weeks ahead I will tell you about some of the clients we’ve worked with and how they were able to minimize fear, grow trust, increase accountability and ultimately achieve beyond their expectations.

Come back. I promise not to talk about Hilary or Marco for at least three years!

Cultures that respect time know how to set priorities

MARISSA MAYER WANTS TO SAVE YAHOO and she believes getting everyone back in the office will create the necessary urgency, collaboration and serendipity for success.

Mayer’s bet is that proximity will improve communications, boost productivity and help her weed out the people not contributing. The debate online and within the company, however, has so far not been about urgency, collaboration or serendipity. It has largely been about what wastes more time: the office, the commute or working at home. Let’s quickly skim the basic arguments as they’ve appeared:

– Teleconferencing is a terrible waste of time. Even worse than a normal meeting.

Above the Line

Research suggests that telephone-only meetings that have more than four participants and last more than 25 minutes create almost no value for a company.

– But when we’re at the office, we meet too often. We schedule too many meetings, they last too long, too few have tangible outcomes and too many wander off topic. If your meeting has more than 7 people and lasts more than 50 minutes, you are wasting at least one person’s time and salary.

– E-mail creates a lot confusion and miscommunication. Absolutely, without hesitation, email is the worst way to communicate any message that requires nuance, tact or diplomacy. Which, in a business environment, is close to everything. A number of our clients have followed the lead of Third Federal Bank. Their policy: “Hugs and Slugs” may not be delivered by email. And hitting “reply all” is a major sin. That leaves data, agendas and the occasional link to a video of a puppy learning to walk down the stairs.

– When we’re at the office, I’m easily distracted by my colleagues, who talk and talk and never get to the point. I have been in workplaces where people can spend the first 90 minutes of the day at the “water cooler.” And my manager is a real grump. Her bad mood is contagious; I’m better off at home far away from her.

– Working in my pajamas can be convenient but it can also suck my attention away from work priorities, limit my interactions with co-workers and undervalue my contributions. Humans are designed to be social, so isolation does contribute to fewer creative ideas, fewer risks being taken and ultimately, less value.

– But time spent commuting is time I’m not doing work or being with my family. If you want me to use my commuting time for self-improvement through phone calls, listening to books or some other venture you are increasing the likelihood I will have an accident, whether I am in a car, on a bus or a train.

Both sides sound right to me. So maybe “Place” isn’t Yahoo’s biggest issue. I’m thinking this is about “Time.” Specifically a culture that is assigning no value to Time. It is seen as an unlimited resource we somehow can “make more of.” Our experience has been within this type of culture, the concept of setting priorities loses all meaning.

Time, of course, is a fixed, limited resource. Leaders who treat people’s time with respect see higher productivity and better retention rates. Treating Time that way could really change Yahoo (and many other companies).

During the last three decades most companies have taken on Time by computerizing, de-unionizing, off-shoring, middle management-purging and lean six sigma-ing their way to efficiency. The result is we are the most productive per capita economy the world has ever known. We will continue to find ways to more efficiently use the time there is; but we cannot create more.

IF YOUR COMPANY CAN ACCEPT THE BIOLOGICAL AND QUANTUM DEFINITIONS OF TIME and treats it as a valuable limited resource, our research shows you will begin to see a number of behavior changes take hold:

1. Clearer Priorities. Leadership becomes about setting, reinforcing and fine-tuning priorities every day. Not everything can be of equal importance. When we act as if they are, we are abdicating responsibility. Employees determine their day by the priorities and values you communicate. If you are inconsistent, they will be also.

2. Quicker, Appropriate Decisions. No one person can or should make every decision, settle every dispute or broker every deal. The work of leadership becomes allocating and aligning responsibility, authority and accountability to the appropriate levels for each and every employee in your company.

3. Fulfilling Meetings. When you gather people together you treat people’s time as a scarce resource. That means enforcing rules for shorter, more focused meetings, leaders preparing well ahead, giving people input and communicating the value and responsibility of each participant.

4. Better Rewards. Compensating people for their measurable contributions and their value-reinforcing behaviors begins to make much more sense than paying for on-site or off-site time.

5. More Agility. People who feel competent and trusted are motivated to excel. Motivated people are better able to recognize patterns, anticipate problems and develop solutions.

So after all this talk and panic, I don’t think Marissa Mayer is out to destroy the work at-home movement, working parents or techno-hermits. She may have severely misdiagnosed the cause of her company’s engagement problems. As such, she is applying the wrong cure. In fact, she has instead made people angry and scared – states that contribute to stupid decisions, which makes progress an even slower event.

What is your company’s relationship with Time? How might it be driving decisions and behaviors? These rapidly changing times require people who are nimble and aware, competent and motivated – no matter where they are.

Practicing anything mildly important, like say skiing or golf, without training is inadvisable. The fact that so many of your managers are practicing leadership without training should alarm you.

Here are three reasons why.

Practicing without training ingrains bad habits. My children and grandchildren learned to ski at early ages. I began when I was 41. They learned the fundamentals early and well. I did not. They didn’t pick up any bad habits. I did. Instructors pushed them to move to more difficult slopes while maintaining good form. I took my bad form from slope to slope. As you would suppose, they are much better skiers than I am. While they were taught correctly, I learned my skills willy-nilly — just like all those supervisors left to their own devices until they reached their 40s. Worse, I practiced my questionable skills over and over, ingraining them deeply.

Practice makes perfect only if done correctly. Practicing for hours doesn’t automatically create excellent skills. Say, for instance, that, as an aspiring golfer, you go to the driving range and practice by hitting buckets of balls off into the blue. You may leave feeling you’ve done something to help you improve, but more than likely you will only have practiced whatever swing you came with — good, bad, or indifferent. But say that when you go to the range you take a more deliberate approach. You draw a circle 20 feet in diameter, move back a bit, and proceed to hit balls until 80% land in the circle. Then you move farther back, take a different club, and do the same thing. That is deliberate, focused, and productive practice. Perfect practice makes perfect performance.

Your young supervisors are practicing on the job whether you’ve trained them or not. Supervisors, are of course, leading people from the first day on the job. And from that day habits are being formed. Attitudes are being created. Management practices begin to coalesce. Would it not be in the organization’s and the individuals’ best interests to begin that process the moment they’re selected for that position?

As investments go, giving your people access to leadership learning early and often can pay off in multiples.

We’re used to seeing the big business magazines tout the Googles, Facebooks and JetBlues as the greatest places to work. Research by our partner company, Workplace Dynamics, based on the opinions of nearly 700,000 employees at 5,000 companies suggests QuickenLoans, the ContainerStore and a mid-size energy company in Texas are much more in tune with what matters to employees.

http://onforb.es/WFSeHf

Multitasker or quick-switcher? Think again.

A new study finds this alarming result: “People who talk on cells phones while driving tend to be the people least able to multitask well.” The University of Utah research found that the people who multitask the most tend to be impulsive, sensation-seeking, overconfident of their multitasking abilities, and they tend to be less capable of multitasking. Just something to think about the next time you reach for that cell phone on the drive home.

http://bit.ly/Vzpfow

Change your culture, not your employees

The Heath Brothers share their top tips on creating a nimble organization that is better at anticipating its customers’ needs, discovering new efficiencies and cutting away at the politics.  The advice isn’t new, but it continues to be revelatory.

http://bit.ly/VzoVGi

Above the Line

A new study suggests playing favorites can be good for managers and employees. The study’s author, University of British Colombia Professor Karl Aquino, claims that his research shows that “fairness can be a disincentive for workers who would otherwise go above and beyond on behalf of the team with a little bit of extra attention.” You can see a study summary here.

The serious problem with this study lies in a fundamental confusion between “fairness of opportunity” and “fairness of outcome.” Fairness of opportunity in the workplace is critical. Outcome should fairly reflect the effort and intelligence of the work done.

My experience with favoritism has been very different than Professor Aquino’s …

I had hired the person sitting across my desk about a year earlier. When they came on board I was truly excited. This person seemed to have the skills, the personality and the clarity to be a real leader.

Now things were spiraling out of control. People were squabbling about little things. Feelings were so hurt we couldn’t even celebrate our successes without it turning into a finger-pointing session.

All my excitement about the possibilties had come down to this: The employee looking me in the eye and saying, “People see you playing favorites. You are not helping me. You need to simply walk away.”

What had I done? Where had I gone wrong?

Favoritism is a difficult perception to change and you really can’t erase it through proclamation or policy statements. What was I going to do, go out and say “From henceforth let it be known I will not favor Employee X over any other Employee, especially those Employees in Dept. Y who may have interpreted my earlier behavior as being disrespectful or demeaning to their contribution to the corporate mission …”

You get my point.

Favoritism – real or perceived – tends to be the byproduct of unclear roles and unclear  performance expectations. Management is unclear to employees about what role a person plays in the operating model or they have not done a good job of communicating to ‘favored’ employee what boundaries exist for them.

Define success for every employee. Either way, the first step needs to be Management coming to an agreement on what success looks like and what failure looks like. Then they have to communicate that message clearly and repeatedly throughout the company. When success and failure are broadly understood, the barriers (or secret boosts) can be dealt with openly.

Create clear boundaries. Next, favoritism usually suggests that employees don’t have clear boundaries and/or some core predictability that allows them to correctly concentrate their efforts. Reviewing job responsibilities and individual goals can make standards clear and also make it more difficult for managers to rely on favoritism.

Tie individual performance to bottom line. Favoritism also suggests that employees aren’t clear on how their specific behaviors impact the company’s bottom line. This creates an educational opportunity for the company to make its business model clear to everyone.

Provide consistent feedback. Favoritism tends to thrive in places without a predictable, regular form of feedback. Annual reviews just don’t work. So if the company is project based, we suggest companies do performance reviews at the end of every project, in which each employee involved in the project reviews every other employee with a simple online tool. These tend to be much more useful. There are other ways to make constructive feedback more consistent. This type of communication either shines a glaring light on favoritism or prevents it from happening.

Above the line

My colleague, Barbara Arney, works with doctors who have been identified by patients and peers as having bad bedside manner and a questionable diagnostic success rate. Turns out “typical” bad doctors have a consistent bad habit: They start diagnosing a patient in their head 19 seconds into a patient’s story. Unfortunately, the patient often doesn’t reveal the critical symptom until

… about 35 seconds into the conversation. You can see how this would create problems.

The doctors think they are being efficient. They hear the same symptoms over and over again, so beginning the diagnosis and assigning the treatments in their heads is a “wise use of time.” It often doesn’t work that way.

People tell me all the time that they are highly efficient multi-taskers. Except that, like these doctors, they aren’t. Too often they miss something and/or get it wrong.

Here’s a way to think about multi-tasking: Your brain is a biochemical/electrical organ. Your neurons connect through an electrical charge. A single AAA battery has 1.5 volts. Your brain has 40 volts. If we could hook your brain up to an electrical circuit, you could light up a 10 Watt light bulb.

Biologically, what multi-taskers are doing is allocating the 40 Volts of chemical electrical energy our brains create. You can’t create more than 40 Volts. You have 40. Period. Multi-tasking is simply dividing that voltage among different tasks, meaning you are not devoting 100 percent of your attention to anything. A great lesson from this biological fact is that Driving + Texting = more than 40 Volts.

We all can tell when people we work or live with have maxed their 40V. Ever been on the phone with someone and you can tell they are reading their email or typing or doing something else while they are talking to you? Of course you have. Has an employee come in to talk with you and, as soon as they start, you glance at your computer screen or glance at a letter on your desk or start thinking about an upcoming meeting? Good question, huh? Our brains are wired to recognize that.

I hear leaders say, “I talk to so many people every day, if I gave them my full attention, they’d talk to me forever. I’d get nothing done.”

In the doctors’ cases, it turns out that by investing just 11 more seconds of their full attention into their conversations, they received “better” quality information and engendered much more “respect” from the patient.

Next time an employee wants “a minute” of your time (or your spouse, or your child), try giving them your full attention for 30 seconds. It will power up your understanding and your relationship.

Hence, 40 Volts for 30 Seconds.

Above the Line

This has been the presidential campaign of percentages:

The 99 percent, the 1 percent, the 47 percent, the 1/100th of a percent (that’s for Big Bird!).

The most important percentage has not yet been mentioned, although it is essentially at the heart of the three recent debates. That percentage is 93.

93 represents the percentage of information you transmit through something other than the words you choose. In face-to-face communication your brain relies first on body language and then on tone of voice to extract 93 percent of the “meaning” from what someone is saying to you. That leaves words a paltry 7 percent.

Clearly you must choose your words wisely. But, more important, this tells you to be more aware of how you employ your words. Here’s a quick reference point – How many different ways can you say, “Hello, how are you?” Happy. Concerned. Sad. Desperate. Snarky. You get the idea.

Numerous studies break down the 93 percent this way: 53 percent body language, 35 percent tone of voice. There’s a lot packed into those percentages. The primary lesson is that people’s brains are wired to interpret communication this way. Body language and tone are much more efficient at conveying safety, respect and intent than words – so even if they are absent, such as with email, our brains will try to fill in the gap based on experience.

Before we can make a decision about whether to listen to someone, we have to feel safe and respected by them. For us to judge someone mostly by their words requires us to “on-purpose” override the way we’re wired. We can do that, but it is important to realize that listening to the words is not our “default setting.”

This brings us back to the three recent presidential campaign debates. What many viewers remember from the first debate is Romney’s confident posture, tone of voice and command of information. This contrasted to President Obama’s detached, aloof body language and an “annoyed” tone of voice. Much of the commentary that followed was focused on building stories to explain each side’s “non-verbals.”

The vice presidential debate? Let’s just say Joe Biden is the poster child for the 93 percent.

This morning the pundits characterized last night’s debate by citing Obama’s aggressiveness and Romney’s condescension. On Twitter there is a long streak about how uncomfortable both candidates made us feel when they invaded each other’s personal space.

The problem with being wired to pay so much attention to non-verbals is that it leads to what researchers call “confirmation bias,” that is our tendency to listen more intently for information that supports our current point of view and to react as if non-conforming information is a threat. This is, in many ways, the source of our incessant arguing about what constitutes a “fact.” And it explains our initial reluctance to any change.  We are wired to resist.

This is damaging enough on a national election scale. Think of all the damage this could be doing within your organization. How does your body language and tone of voice reinforce your message? Do you have leaders whose decisions about ideas, strategies or people are too heavily influenced by the 93 percent? Or not enough? When you walk through your office or through another department, what story are people telling themselves because of your body language or tone of voice?

These questions are more foundational than the brilliance of your idea or the depth of your data. If you think no one care about these things, just think about the debates. Quick, tell me Romney’s five-point plan. Now: Who got the biggest laughs for the “your pension’s bigger than mine” line? One made you laugh – we remember what we feel is important, not what we calculate to be important.

What percentage of what you remember is what they said and how much is how they said it?