Coaching Tip: The Leadership Blog

Big 3 Blind Spot: Quality Builds Marketshare

R.L Polk tells us that the average length of car ownership in the U.S. is up 24% since 2002.  Some 64% of people plan to keep their current car longer because of the recession.

Big 3 Leadership Blind Spot Led to Marketshare Erosion

Motor vehicle production now makes up less than 2% of U.S. gross domestic product versus as much as 5% in the early 1970s when the Japanese began to assemble automobiles here in the U.S.  

When Honda began to assemble cars in North America their product quality was not very good...yet, Honda leadership focused on building a quality product.  Over time, Honda did just that. 

Today, the leadership at Ford Motor is now starting to focus on quality and plans to build market share as consumers perceive the improved styling, design and quality improvements of the Ford brand.  Specifically, Ford expects to claim 25% of the expected marketshare losses of GM and Chrysler.

From Worker Burnout to a Winning Team Attitude

A dysfunctional work environment, if left unchecked, can deteriorate to the point of employee burnout. Burnout is a familiar term these days: it's the physical or emotional exhaustion that results from long-term stress or frustration.  Chronic fatigue is a major symptom of burnout: one feels physically, emotionally and spiritually exhausted. Behaviorally, the burnout worker becomes cynical, indifferent and increasingly ineffective in the job.   

According to Herbert J. Freudenberger, the New York psychologist who coined the term in 1972, burnout describes a specific condition. It is an emotional state characterized by an overwhelming and enduring feeling of exhaustion or aggravation.  Burnout is a condition that develops gradually as the person's creativity and effectiveness erode into fatigue, skepticism and an inability to function productively. 

Traditionally, the worker is the one who gets the blame but research shows that the cause of burnout lies mainly in current economic trends, the use of technology and management philosophy within organizations.  As managers become de-energized and lose confidence in their abilities, these emotions are transferred to employees.  Employee engagement and long-term improvements in corporate performance can't be accomplished with a burned out, low energy and low confidence leadership team.

Leaders can turnaround a failing work environment by helping employees move from the language of "blame" to the language of "personal responsibility.”  The first step is to instill confidence in the employee’s ability to meet and overcome workplace challenges.  Experience tells us that confidence precedes competence.  A person must first believe they can succeed by developing a winning attitude reinforced by skill-building training.

Why Leadership Development?

In this recessionary period, layoffs and other drastic measures are being taken by companies to insure their future survival.  However, leadership development programs are seen as vital for corporate survival today and in the future.

While it may be true that organizations are cutting funding for "training programs," that is not the case when it comes to grooming emerging leaders.  According to the 2008 Bersin & Associates Leadership Development Survey, a study of 400 organizations conducted last October by the Oakland, CA-based talent management research firm, 40% of those polled, said their spending on leadership development has remained the same, while about 36% of the organizations said their budgets were slated to increase this year. 

When Banks Collapse

Following the wave of bank failures in the Great Depression, regulators decided that bank ownership should be limited to bank holding companies. 

Why?  Back then several banks failed when owners diverted resources to prop up other holdings like retailers and manufacturers.  With 305 banks on the verge of collapse today, regulators have begun to relax the rules.  Now the Federal Reserve will let a single private equity firm own as much as 33% of a bank.  Firms can team up to buy an entire bank.

Critics fear private equity firms--which collectively own hundreds of companies--will succumb to the same temptation as bank owners in the 1930s.  "If I've got a bank, and I have a business that's going down, where do you think the bank funding is going?" says Rochdale Securities bank analyst Dick Bove.

When private equity stumbles, small business and taxpayers will end up footing the bill. 

Watch for a future posting on this leadership blog for how a small business was forced to provide an interest-free and unsecured loan to an entity caused by one failing bank's moves prior to being acquired.  Be sure you protect your personal and business assets by banking with a safe U.S. financial institute.

Source: BUSINESSWEEK, June 15, 2009

Leadership in a Crisis

This recession is much worse than any seen in your lifetime and for millions of people globally it's a time of deep personal trials.  Truly everyone is being stress-tested.

Turmoil presents the ultimate leadership opportunity, but for every inspiring story there's at least one less heralded tale of a leader who blows it.  So what does true leadership, under unimaginable stress, look like?

It can be boiled down to four actions.  They're simple to state and may seem deceptively simple to do, but they aren't.  Finding the strength to take these steps will contribute significantly to any leader's growth.

Deflationary Salaries

In a time of rising unemployment, would you welcome a salary reduction as an alternative to a layoff?

In the past nine months a growing number of major companies, including FedEx, Hewlett-Packard, Advanced Micro Devices and The New York Times, have all trimmed their staffers' base pay.  Most have made larger cuts for senior executives and smaller ones for the rank-and-file.

According to a Hewitt survey, some 16% of companies in a study of 518 large U.S. employers have made base salary reductions during this recession, and another 21% say they are considering one.

The key is to be sure stars still make more than their lesser-performing colleagues, even after a pay cut.  Telling an A+ player that he or she is going to take home less money this year, despite stellar performance, seems like a sure recipe for undermining enthusiasm.

Dave Ulrich, a professor at the University of Michigan's Ross School of Business, adds that trimming salaries is less risky in well-managed companies.  He thinks pay cuts may even boost morale if they avert layoffs among highly engaged employees.  "I don't think it's just pay that keeps people connected to a company," says Ulrich.

But other human resource experts argue that managers are paying too little attention to the perils of such cuts.  "We haven't yet seen the unintended consequences," says William J. Conaty, an advisor to private equity firm Clayton, Dubilier & Rice.  "People have long memories.  They'll remember whether they think they were dealt with equitably."

Source: BUSINESSWEEK, June 8, 2009 

Assessing Job Candidates

The importance of assessing job candidates prior to hiring can not be overstated, especially considering all the wasted time, money and negative publicity that can occur when Human Resource Departments (HR) don't do its necessary homework.

Employee turnover is inevitable.  Yet, unmanaged employee turnover can easily steal your company's knowledge base, profits and competitive edge in the market.  Organizations that do not actively manage the impact of turnover will find not "keeping the keepers" costly.

The major reasons for high employee turnover are:

Improper recruitment

The nature of the job and company

The characteristics of the individual employee

By focusing on improving incoming employee efficiency (from sharpening recruitment methods to better matching of candidates with the job and company culture) and reducing the length of time that a position is vacant, can substantially reduce turnover costs.

Focusing on the front end by screening job candidates carefully to engineer the right job fit allows for matching up the right person with the work they find challenging.  Today's pre-employment assessment tools screen for learning ability, personality and candidate interests to compare with a composite profile of your best job performers.

New data shows how costly an unreliable hire can be for organizations' bottom lines.  According to the U.S. Bureau of Labor Statistics, companies lose approximately 2.8 million workdays each year from unscheduled time off, aka absenteeism.  But pre-employment assessments make it easier for hiring managers to gauge a candidate's reliability as well as his or her ability to adhere to rules and regulations.  Assessments from companies such as Profiles International, Insight Worldwide and SHL are designed to identify job candidates who are more likely to be unreliable and unsafe in the workplace.

The forward thinking HR executive will employ such pre-employment assessments because they provide objective data to protect a company from any possible discriminary claims.

Source: Human Resource Executive, May 16, 2009

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Gold is still Money

By Robert Prechter, CMT

The following article is excerpted from a brand-new eBook on gold and silver published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. For the rest of this fascinating 40-page eBook, download it for free here.

Have you ever traveled abroad and taken a look at the local currency and wondered how the citizens of that country could take seriously what looks like “Monopoly money?” I’ve got news for you: You’re using the same stuff. Monopoly money is the money over which some government has a monopoly. It is the currency of the realm only because the state makes it illegal to use any other type.