Coaching Tip: The Leadership Blog

CEO Turnover Today

Despite heavy layoffs in the lower ranks this year, job stability has been higher in the C-suite, creating yet another disparity between executives and their workers.

Executive search firm Spencer Stuart reports that turnover has slowed to just 26 CEO changes among the Standard & Poor's 500 companies during the first half of 2009, compared with 36 for the same period last year.

Broaden the universe to some 13,000 public companies and there are double-digit declines in CEO job shifts, according to Liberum Research, which tracks management changes for hedge funds.  "That's kind of counterintuitive" for a recession, says Richard Jacovitz, Liberum's director of research.  "As companies cut back, you would think that top executives would get impacted, too."

The volatile environment has made directors skittish.  When the economy soured, notes Korn/Ferry International Vice-Chairman Joe Griesedieck, "A lot of boards pulled in their horns and said, 'let's stick with our guy through the tough times.'"

But that means middling performers may get cut more slack.  Matthew V. McGreal, a principal at search firm Crist/Kolder Associates, says: "It's perceived that the greater risk is to make the move" unless performance is "atrocious."  And tough times tend to mask mediocrity.

Source: BUSINESSWEEK, September 7, 2009

Leadership Accountability in Schools

The most serious studies on education reform have concluded that the critical variable when it comes to kids succeeding in school isn't money spent on buildings or books but, rather, the quality of their teachers.

A study of the Los Angeles public schools published in 2006 by the Brookings Institution concluded that "having a top-quartile teacher rather than a bottom-quartile teacher four years in a row would be enough to close the black-white test score gap."  But, holding teachers accountable for how well they teach has proved to be a frontier that cannot be crossed.

Removing incompetent teachers from the classroom into a 'Reassignment Center' is based on a rationale that is undeniable: Get these people away from children, even if tenure rules require that they continue to be paid.  Most urban school systems faced with tenure constraints follow the same logic.

Developing a Disruptive Mindset

To develop a disruptive mindset, managers must master four areas:

1.   1.  Liberate resources for promising innovations by prudently shutting down dead-end projects and declining businesses.

 

2.    Drive fresh growth by re-featuring existing products and services and reinventing outdated processes.

3.    Mitigate risks by conducting strategic experiments and forging alliances with customers, competitors and suppliers.

4.    Appeal to value-conscious consumers and fend off low-cost attackers by delivering “good enough” offerings at an affordable price.

The Executive Challenge

Systematizing disruptive innovation is a different beast. Senior executives must think and act in ways that run counter to everything they have done to succeed in their careers. How do you simultaneously manage two different instincts: one operational, the other entrepreneurial?

Executives who encounter tough times naturally become more conservative. It’s hard for them to tolerate creative thinking when they face the prospect of downsizing. But companies that play it too safe can wind up in trouble down the road, and frustrated managers may quit, leaving their firms ill-equipped to function effectively once the downturn ends.

Innovation practitioners need to strengthen their creative muscles by:

· Developing an awareness of themselves and others

· Creating a personalized program of developmental leadership with an executive coach

· Striving to improve their ability to spot hidden opportunities and act in more entrepreneurial ways

· Scheduling regular excursions to observe how certain customers use a product or service

· Attending a conference in a different industry

· Learning to ask more “what if…” questions

 Clayton M. Christensen: The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

The Abundance Paradox

Abundance is actually the root cause of many corporate struggles with innovation.  Too much time or money often leads companies to continue following fatally flawed strategies. Their leaders create overly complicated solutions that overshoot customer needs.

In contrast, constraints often enable innovation in the retail industry. Over the last century, there have been numerous significant business-model innovations:

· Wal-Mart’s discount model

· Costco’s warehouse club model

· Inditex’s Zara fast fashion model

· Amazon.com’s collect-cash-before-you-contact-suppliers model

One explanation for the retail industry’s inventive business models is scarcity.  The constrained retail environment leads them to funnel creativity to where it can best be applied.

Entrepreneurs are another example of flourishing innovators.  They have no choice; if they fail to rapidly adapt, they run out of money. Bad times force discipline.

The Transformation Imperative

Survival really comes down to change or die.  In the Great Disruption, companies have two choices: Live with shrinking profits and increasing chances of extinction, or follow a completely different approach.

Disruptive Developments

Harvard Business School Professor Clayton Christensen, author of The Innovator’s Dilemma, describes disruptive innovation as a corporate effort to redefine quality, adopt new technologies and anticipate customers’ future needs.  Subsequent research has identified more than 200 disruptive developments over the last 50 years, across a range of industries.

Some disruptions reshape existing markets:

·         Discount retailing (Wal-Mart)

·         Low-cost automobiles (Toyota)

·         Steel mini-mills (Nucor)

·         Digital music (Apple)

Other disruptions create entirely new markets:

·         Personal computers (Apple, IBM)

·         Online advertising (Google)

·         Online auctions (eBay)

You would think recessionary times would be particularly hard on up-and-coming disruptive companies that haven’t yet broken into the mainstream.  History suggests otherwise.

Disruptive Innovations happen in Tough Times

Many successful companies have been launched during recessions. Grim economic times can highlight previously hidden problems or cause old problems to intensify. When a deep-seated customer problem emerges, search for novel ways to address it.

National Cash Register was founded in 1884, the year of “the Great Panic.”  At a time when investments from coal and railroads were sharply declining, the Patterson brothers decided to commercialize the mechanical cash register. At the time, they invested $6,500. Today, NCR has more than $6 billion in annual revenue.

Thirteen of the 25 companies on the Dow Jones Industrial Average, as of December 2008, were formed during an economic downturn, including 3M, General Electric, Microsoft and Walt Disney.

The inevitable constraints this tough economy imposes on companies provide fertile ground for innovation because necessity truly is the mother of invention.  Companies that learn to innovate more quickly, cheaply and with less risk will emerge from the downturn stronger than ever.

To succeed, smart executives will need to adopt a different mindset and effective frameworks to determine what to start doing, stop doing and do differently.

Disruptive Innovations

Consultant and author Scott D. Anthony prescribes “disruptive innovation.” 

Instead of trying to best their competitors, disruptors change the game. They typically transform existing markets or create new ones by focusing on convenience, simplicity, accessibility or affordability.

 Clayton M. Christensen: The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

 

Today's Biggest Leadership Behavioral Mistakes

With executives under fire for driving their companies into the ground--and with them the global economy--conventional wisdom is becoming one of the damnedest things.

Turning conventional wisdom on its head, OOPS! 13 Management Practices That Waste Time & Money harnesses behavioral science to assess and correct widespread leadership mistakes, including: annual bonuses, automatic pay raises, downsizing and spending big dollars to recruit talented people. 

From a business perspective, the most important thing we know about behavior is that it is the only way that any organization's outcomes are accomplished.  The principles of behavior are just as much a part of human nature as gravity and electricity.  While there is much yet to learn about behavior, what we have learned can be used to make significant improvements, not only in the workplace, but in all areas of life.

As gravity is a law of physics, behavior is a function of its consequences.  Getting the right behaviors to occur at the right time in the right way and at the right frequency is what separates the successful strategies from the unsuccessful ones.

Behavior is time and money.

Failure to understand human behavior from a scientific perspective costs organizations serious money and causes significant morale problems.  In organizations, what is reinforced is what gets done.

Most performance problems are solved when you create a culture where improvement is valued.  The smaller improvement you detect and reinforce, the better.  With frequent positive reinforcement people are more open to opportunities for improvement.  A positive performance culture is characterized by energy, excitement, and enthusiasm, as well as by people seeking information and feedback that will help them improve.

Contrary to popular opinion, you don't buy people's brains; you buy their behavior.

An employee value lies in how their intelligence is used to advance the mission and vision of an organization.  In today's economy with fast growth and rapid technology changes, the ability to develop people quickly to high levels of skill in short time frames is very desirable. 

As a manager, it is your job to retain and develop people.  Employee retention is not a human resource responsibility.  A part of any reward system for managers should be the number of employees they keep and promote within the organization.

There is a good chance that you already have many smart, talented people and spending some money and time to develop them is better than trying to entice and buy 'talent.'

Source:  Aubrey C. Daniels: OOPS! 13 Management Practices That Waste Time & Money (and what to do instead)

Your success can depend on a network of mentors

Relatively savvy people who succeed at building and sustaining networks of mentors are more likely that others to:

• Take the initiative to strike up and maintain relationships with mentors.

• Recognize and respond to even subtle expressions of interest from would be mentors.

• Reach beyond immediate peers and bosses to others in the company, as well as in the community.

• Make sure they have frequent contact with each of their mentors.

• Prepare for meetings with their mentors and let them know how their advice has helped them.

• Lend their mentors a hand when they can on projects at work.

• Be open with their mentors about challenges they're facing at work.

• Do their best to be positive and personable.

In summary, they aren't shy about initiating and maintaining contact with people who can support their development.  They constantly ask for information, help, feedback and advice.  As one puts it: "The way I see it, a lot of people are waiting to be invited for someone to tap them on the shoulder and then take them under their wing.  In my experience, that just doesn't happen: you have to go after someone."

The question for you to answer is:

If you had one or more people, whom you admired a great deal, offer themselves and their resources to help you reach your professional goals in the next few years, how do you think it would accelerate your progress?

Source: The Wall Street Journal, August 17, 2009

For more information, go to: www.MENTORINGandCOACHING.com

Prepared for the Unfolding Depression?

Why are the truly big economic catastrophes so "big"?

Put simply, it's that such a small number of people prepare themselves beforehand.  Think about 2008 and you'll realize it's true.  What's more, once you read Bob Prechter's recent 10-page Elliott Wave Theorist, you'll see that even fewer people will be ready for the soon-approaching worst leg down of the unfolding depression.  Go here to download it now.

In this issue, Bob gives a warning he's never had to include in 30 years of publishing – namely, that the doors to financial safety are closing all over the world.  There are but a few opportunities left and little time to take them.  Even as this happens, the terrible irony is that so many people believe the conventional wisdom, which claims "the worst is over."

It's not too late, but the doors really are closing shut.  Learn what you need to know now.

Executive Recruiting via Social Media

Companies are now recruiting executives through such sites as Twitter, Craigslist, Facebook and LinkedIn. 

Social media tools are especially attractive for small businesses eager to cut hiring costs.  Contracting a recruiter to find an executive who earns $150,000 annually can cost $15,000 in fees.  Posting ads on job search sites like Monster.com could mean spending hundreds of dollars--and precious hours poring over resumes.

In contrast, social media tools are mostly free and offer added value: candidates bring their own online networks, blog content and references, which speeds up the interview process.

David Bowman of Cincinnati-based Lucrum, a 100-employee IT consulting firm with 2008 sales of $15 million, admits that social media isn't a magic bullet.  "Its biggest drawback in recruiting is that it won't help you appreciate nonverbal communication dynamics," he says.  "While Facebook, LinkedIn and Twitter can provide a wealth of information about a potential candidate, they aren't substitutes for face-to-face communications."

Tableau Software, an 88-employee Seattle software firm, has mined social networks such as Craigslist, LinkedIn and Twitter to recruit employees.  But the company, whose 2008 sales totaled $20 million, has also reached beyond these sources to search for highly specialized workers.  Recently, they skipped LinkedIn and went straight to social-networking sites where Drupal enthusiasts gather.  Tableau hired a developer it discovered in the Seattle Drupal user group.

To be sure, social media enables businesses to find talented employees efficiently.  But getting to know the person behind the blog post, profile page or tweet is essential.

Source: FORTUNE Small Business (FSB), September 2009