ka-POW-er!

Gravity is simply part of life on this planet. There’s no point in fighting it. Efforts to eliminate it are wasteful and create side effects worse than the “problem” of gravity itself. So rather than fighting it, we simply design for it. Furniture, clothing, coffee mugs, elevators, writing utensils – all account for gravity. In fact, they do such a great job that we forget about gravity until something (such as this blog post) brings it to the foreground.

Businesses too, have forces that closely parallel with the forces of gravity. For the sake of discussion, we’ll call them “resistance”.

Resistance in business has many forms. It could be financial, such as taxes and regulations. It could be human, such as gossip or a tendency for self-destructive behavior. It could be physical, such as wear and tear on furniture and equipment. It could be the pace of new knowledge and new technology, making recent purchases and skills obsolete.

Resistance must be managed and counteracted every day, or like a jet aircraft without fuel, a business will crash. Copious amounts of energy and attention must be continuously added, or a downward spiral will occur.

Just this morning, Seth Godin wrote a great post, explaining the danger of downward spirals and our tendency to dismiss them as part of life. His advice?

The answer isn’t to look for the swift and certain solution to the long-term problem. The solution is to replace the down cycle with the up cycle. …to become aware of the down cycle… (then) …understand what triggers it and then learn to use that trigger to initiate a different cycle.

(Emphasis mine.)

Replacing a downward cycle with an “Up” or virtuous cycle is not a simple matter; yet it is a necessary part of business success. Making such a transition often involves counter-intuitive thinking. Seth Godin offers these examples:

The fish restaurant that, as sales go down, borrows money to buy ever fresher fish instead of cutting corners that will lead nowhere good. Or the ad agency that follows a client loss not with layoffs, but with hiring of even better creative staff.

Like gravity, resistance is simply part of running a business. We must design for it, counteract it, and be in a state constant readiness as grenades are hurled our way.

The most hideous danger of resistance is the numbing effect of its constant presence.

While rebranding my business, I’ve had several months to think about what I wanted to do differently with ka-POW-er! My biggest frustration has been the disparity between the results I bring to my clients and how I am often compensated for my services. Why? A significant number of engagements are still compensated based on time.

“Why is that a problem?” you may ask. The problem is that I don’t sell time; I sell results. I help my clients become more effective at serving their clients.

Most creative businesses are in a similar predicament. Quoting Tim Williams in this Propulsion Blog post:

In groups of agency professionals around the world I have often asked the question, “What do clients really buy from your agency?” Their answers usually include things like “Solutions to marketing problems,” “Insights and innovation,” “Expertise,” and “Successful marketplace outcomes.”

Not a single person has ever said “Time.”

Yet billing for time (or costs) is exactly how most creative businesses choose to be compensated for their work. And it must be stopped.

Hourly billing undermines the collaborative process by putting service providers and their clients on opposite teams. If compensation is based on costs and labor, the service provider is pressured to reduce costs and labor in order to be profitable. There is a disincentive to collaborate, experiment, and seek better ideas. Trust diminishes. Relationships are weakened. The client’s success is adversely impacted.

The most hideous danger of time-based billing, however, is that our services and expertise become thought of as commodities; activities that are the same from provider to provider, like goods produced on an assembly line.

What then, should we do? We need to shine a spotlight on the value we provide to our clients, emphasizing their success (and being compensated accordingly).

Agreeing in advance with our clients on what determines a successful outcome, then establishing the value of that outcome. Can we profitably guarantee that outcome for 1/10th or 1/20th of that value? Or even a smaller fraction? Are our clients happy to pay that amount given the return on their investment? Do we all think we are getting the better end of the bargain? Then we are off to a great start!

We’ll be more profitable and more satisfied in our professions because we will be working to make our clients more successful. And our clients will be in complete agreement.

(Tim Williams’ Propulsion Blog post offers a comprehensive list of factors which discredit the practice of hourly billing in a knowledge-based service business. Be sure to read it. But don’t be left hanging. Check out his other posts on how to start with value pricing here and here.)

A broken-down jail at 235% capacity. Summer heat. No air conditioning. Accused murderers awaiting trial alongside thieves and the disorderly.

How does a jail superintendent manage such a potentially explosive situation? According to this WBUR report, with fans. Lots of them. But the key is popsicles.

The superintendent explains,

“We had a staff meeting and it was unbearably hot up here, and besides fans we were thinking, ‘What could we ever do to make sure that the population know that we know how hot it was?’”

Three-cent popsicles are distributed after lunch and dinner. On one especially hot day, when the temperature reached 100 degrees F., popsicles were passed out once more at 10 P.M.

Do the popsicles really make a difference?

“Oh, sure they do, it’s a nice gesture — it says that ‘We care that you’re hot’, cool you down for a few minutes, you know,” says one inmate. “They don’t have to do this… They treat you like human beings.”

Lest you think the superintendent has gone soft, treating the inmates like human beings, keeps them safer, which in turn, keeps the corrections officers safer. But the message of “We know. We care” is not lost on the inmates.

Without comparing workplaces to jails, there are a number of parallels for managers. Every business faces hardships; inadequate staffing, facilities budget constraints, extreme schedule demands, or outdated computers and software. Many times these are issues which managers cannot control. It is vital, however, to communicate to your teams that you understand things are not ideal. That you understand the impact on people’s jobs and their work lives.

This essential truth is highlighted in numerous case studies featured in The Progress Principle by Teresa Amabile and Steven Kramer.

Amabile and Kramer researched what they term “Inner Work Life”  - “the conditions that foster positive emotions, strong internal motivation, and favorable perceptions of colleagues and the work itself.”

In their studies, small thoughtful gestures made all the difference in a number of difficult situations. In one instance, a software engineer came into work during her vacation week and put in 58 hours on a time-sensitive project shortly after a number of coworkers were fired. Some of the key events that led to a successful outcome were a supervising manager checking in on the team and bringing expensive bottled water and a Vice President showing up with pizza. These simple acts did not even come close to financially compensating the team for their extra work, but the message was clear; the project was important and management, all the way up the org. chart, understood the value of the team’s work on an important project.

Don’t forget to be human. Show courtesy, respect, and appreciation. And, it should go without saying, treat your employees better than inmates.

HBR’s What Happens When You Really Meet People’s Needs, explains the mechanics of Ritz Carlton’s excellent customer service, which starts with its commitment to its employees and extends to its guests. (This is a perfect follow-up to Monday’s post, Marketing is HR, HR Marketing.)

Half a dozen examples detail how the Ritz Carlton culture is reinforced, the most astonishing of which is the fact that each employee may spend up to $2,000 on a guest without managerial approval. This Forbes interview goes into even more detail and clarifies that $2,000 is merely a guideline and that the money spent is not necessarily to solve a problem, but to create an “outstanding experience” for a guest. The hotels’ General Managers often find about about these expenditures after the fact; further evidence of the trust they place in their teams. (The Forbes article describes its recruiting and training methodology as well.)

The results?

• The company’s turnover rate is a fraction of the industry average.
• Employee engagement scores are significantly above other “best in class” benchmarks.
• An increase of one per cent in employee engagement measurements translates into as much as $10M in additional revenue.

Hey, Economist: do you still think engagement is a “popular management fad of the moment“?!

This provocative article in The Economist, Down with Fun, takes direct aim at empowerment, engagement and creativity, deriding them as “popular management fads of the moment”.

They write, “surveys show that only 20% of workers are “fully engaged with their job”. Even fewer are creative” with which few will argue.

They state that “as soon as fun becomes part of a corporate strategy it ceases to be fun and becomes its opposite—at best an empty shell and at worst a tiresome imposition”. Again, no argument with “compulsory ‘fun’”. It’s reminiscent of the “pieces of flair” scene in “Office Space“.

While The Economist is mostly correct, the danger lies in what is left out.

A glaring omission is that The Economist has removed “fun” from the context of corporate culture. Re-read the previous quote. They misunderstand culture as strategy.

In a purpose-based company with a strong corporate culture, the hiring, operations, markerting, customer service, and the “fun” environment are completely aligned, making the motivation intrinsic, not compulsory. This alignment leads to breakthrough products and breakthrough customer service, both of which lead to profits.

Clearly, there are “managers (who) hope that ‘fun’ will magically make workers more engaged and creative.”, but this is not proof that the premise of culture is wrong. While a Truth (capital “T”) is shown to be right by those who follow it, the converse, is untrue.

So what kind of “fun” does The Economist support?  Heavy drinking, chain smoking, and workplace promiscuity. Hyperbole, perhaps, but it panders to our base motives. This more extreme “fun” ranges from mere self-destruction to socially and morally irresponsible behavior, adversely affects the lives of entire circles of people, and is clearly counter-productive. Surely we’ve learned something from Mad Men.

So what kind of “fun” is our ideal?

When empowerment, engagement and creativity all spring naturally from a carefully cultivated corporate mission, happily espoused by everyone starting with the CEO, through the management, to the employees. That, my friends, is something magical. It appears The Economist has never witnessed that magic – and it’s a shame.

This excellent Talent Culture post includes a (fictitious) letter to a CEO from the perspective of an employee, who wants to be more engaged in her job. Unfortunately, the CEO hasn’t allowed this to happen. Clearly her company, like many, has gone through some difficult times. The employee truly hopes her company will thrive. The CEO needs to do a better job communicating and connecting, and the writer diplomatically offers many excellent suggestions.

If you are a Manager, CEO, or owner of a company, no matter what size, do everyone a favor and read this post! Then take a few moments to think about the measures you are taking to retain your biggest asset – talent.

Owners and Mangers, if you aspire to motivate your teams; if you need them to commit to a vision or a greater purpose, read this Simon Sinek account of “servant leadership”.

Sinek witnessed first-hand an important, yet from a strictly personnel standpoint, costly Marine Corps policy, which exemplifies their culture. The lesson?

The strength of an organization is easily measured by the steps it takes to look after its own.  To what lengths does a company go to show its people that they matter?  An organization that shows commitment to its people can expect its people to show commitment to them.

If you are having morale, motivation and turnover issues within your organization, Sinek gives us plenty to chew on.

This really interesting article by CCL popped up in the newsreader today, explaining the hidden costs of companies which insist on over-managing their employees. These are the companies which feel they need to tell their employees (grown adults, mostly) exactly how their jobs should be performed. While “process” plays an important role in certain industries, not leveraging the experience of employees is shortsighted.

Anybody who does a job eight hours a day is going to see ways in which that job could be improved or simplified…

This is particularly true for Professional Knowledge Workers, where the costs are huge:

At best, it limits growth and innovation. At worse, it solidifies inefficiencies, undermines company goals and creates an environment where employees are unmotivated and disengaged.

So be sure to give some thought to employee engagement and motivation. It is far better for everyone to be working together toward the same vision. It could very well mean the difference between success and failure.

When leaders give people control over their work, stop telling them how to do their jobs and focus on the goals, the hidden costs are replaced with numerous benefits. Employee stress goes down, absenteeism decreases and engagement goes up. Productivity improves and innovation is possible.

There’s a fair amount of debate to the question, “which offers the best learning opportunities; successes or mistakes?”

Those who say, “successes” always seem to point to “stupid” mistakes, not honest ones, to discredit the learning opportunities of failures. Create a Culture of Successful Failure at Blogging Innovation puts mistakes in context and is careful to differentiate between “honorable” failure and “incompetent” failure.

Amongst many examples, the article points to Honda’s mistakes in bringing low-powered motorcycles to the U.S. in 1959, quoting Soichiro Honda, the company’s founder:

“Many people dream of success. Success can only be achieved through repeated failure and introspection. Success represents the 1 percent of your work that results from the 99 percent that is called failure.”

Are we being so risk-averse that we are loosing ground to our competitors? Are we giving our teams the opportunities and “space” to make mistakes and to learn? Are we commending “honorable” failures? There’s plenty to think about in the article.

Laughing Your Way to the Bank by HBR’s Rosabeth Moss Kanter caught my attention a few days ago, in which she explains the importance of a sense of humor and its role in leadership.

Aside from laughter’s healing properties, which alone can transform a business, humor can be used to unlock creativity, foster trust, and counteract the destructiveness of fear and worry.

So lighten up and be more successful!