Character Matters

Character Matters

Core Values

I have often written about the importance of a company’s Core Purpose and its Core Values. The organization’s Core Purpose is why it exists and gives everyone an understanding of what it does. The company’s Core Values explain how the company expects its employees to behave. The purpose of these is to align behavior across the organization and thus produce better results. In many cases, the Core Values are short and need corporate folklore around them to provide context. However, given the organization’s Core Purpose and Core Values, most people should determine how to respond to a situation that works in the organization’s best interests.

As Jim Collins says, you would take a hit to profits to ensure you live up to your Core Values. Thus, there are no outs from Core Values. That is the way the organization behaves, and there are no exceptions. Because of this strictness, I genuinely believe that Core Values need to be framed by folklore and corporate history to give them context. Humans relate to stories, so stories of why these values are essential and how we should interpret them will enable your employees to understand and adopt them quicker.

 

Instilling Core Values into the Organization

When recruiting employees, it is useful to look at their prior employer. If the organization they worked for before had very different Core Values, they are unlikely to fit within your organization and add value. For example, if their prior employer was Stratton Oakmont and one of your Core Values is to treat customers with respect, they are probably not worth interviewing. Most recently, Forbes has published a piece, “A Truth Reckoning: Why We’re Holding Those Who Lied for Trump Accountable,” where they argue that those who lied should not be hired, and if any company does hire them, Forbes will assume everything the company talks about is a lie. It will verify everything they say on the assumption it is a lie.

How someone behaves tells you and their subordinates what matters to them and what you expect from them. We all have baggage, and in the wonderful world of LinkedIn, Glassdoor, and general industry incestuousness, it is easy to find someone’s prior behavior with a little digging. Thus, I find it interesting when I hear someone say with shock, “I never expected them to behave this way,” and it is a behavior pattern the person has always exhibited.

There many ways of setting up situations to observe the potential employee’s true colors. We know how Zappos! checked candidates for behavior from how they treat the “driver” who picked them up from the airport. Other companies have, pre-COVID, taken candidates to lunch and had the wait staff bring them the wrong order to see how they dealt with it.

The most important thing for the organization is to ensure that its employees live its Core Values daily. The challenge for many organizations is how to instill Core Values into employees and reinforce them. Below are examples of how companies achieve this.

  • One organization has new employees spend their first week solely focused on learning and understanding its core values from its folklore through discussions with many of their colleagues. At the end of the week, the new employee meets with the CEO and discusses the company’s Core Values, and the CEO seeks to ensure that they genuinely understand the Core Values and what is expected of them; if not, they are let go. The CEO’s justification for having employees do nothing else during that first week is that it is the best time to learn and absorb the Core Values. As Core Values guide their behavior, the longer an employee takes to understand them, the greater the chance that they behave in ways that are contradictory to the Core Values. Such action could potentially damage the company’s relations with customers or suppliers and damage the employee’s relationship with their coworkers.
  • Cambridge Air Solutions provides all new employees with a vest to identify them as such, and all employees are responsible for helping the new employee learn the Core Values. Because new employees are easily recognized during their onboarding process, they receive encouragement and support from other employees. Those employees are then more willing to help other new employees who come after them. Thus, the process reinforces itself and ensures that desired behaviors become ingrained.

Living Core Values

However, regardless of your onboarding process, the CEO, management team, and employees need to continually focus on living the organization’s Core Values and make them Actions to Live By. Many organizations have different ways of doing this. Some are like ReStockIt, which has an icon for each Core Value. Employees can award any other employee an icon for following exhibiting a Core Value. This behavior reinforces living Core Values among the employees. Others allow employees to call each other out for not displaying a Core Value in a situation. In my work, I have found it interesting that CEOs, when facing a dilemma, rarely frame it within their Core Values to see how they should proceed. Doing that often provides an easy answer to the problem.

The iconic investment bank, Goldman Sachs, has had its reputation a little tarnished over the last decade or so for defrauding clients in the Global Financial Crisis and more recently the IMDB scandal. Thus, I have often wondered if I am Goldman’s client, what is more important to Goldman, me or them. Well, obviously it is Goldman, as has been recently demonstrated with WeWork, where they were a lead underwriter of a worthless company. More recently Goldman’s CEO, David Solomon, expressed concern about market euphoria driven by small investors buying IPOs. While expressing concern, Goldman is taking Robinhood public, which gamifies stock investing and is damaging to its supposed clients, resulting in financial loss and suicide. I use “supposed” because as with all things that are free, the client is not the client but the product. Obviously making money is Goldman’s Core Value, and whether or not it is damaging to anyone else is irrelevant.

In discussing Core Values, I often ask, “What are the top five things, non-criminal, that would get you fired in this organization?” The answers to this question are the opposite of your Core Values. If you have a Core Value of “Treat everyone with respect,” and none of the answers says you would be fired for disrespecting someone, then that is not a Core Value. Regularly doing this exercise is eye-opening for many CEOs. While companies have Core Values and post them everywhere, they just become words rather than actions to live by.

 

From the Top Down

While corporate Core Values are essential, the organization’s behavior is purely a summation of the individual leaders’ Core Values. Thus, it is the behavior of the business leader or CEO that is key. I remember sitting in a meeting with the late Robert Maxwell, where his solicitor acknowledged the contents of an off the record conversation with our solicitor. Maxwell turned to his solicitor and said, “You will unsay whatever it is you said.” That statement told you everything you need to know about Maxwell’s Core Values, and thus it was no surprise that a year or so later, we learned that Maxwell had stolen his company’s pension funds.

In my career, I have left companies because of behaviors I saw that didn’t fit with my Core Values. Seeing a CEO verbally abuse a janitor or someone at a low level who had no responsibility for the situation told me enough about their character. Reflecting on those decisions now, I realize that I would have made a lot more money staying, but at what cost to my values. For me, the price was always too high. As I have mentioned before, from what I saw of Robert Maxwell, I could never have worked for the Mirror Group or any of his other organizations.

If someone starts to behave against your Core Values, as, with any abusive relationship, my advice is to run, don’t walk. They are unlikely to change, and the internal stress you will face from working in such an environment will take a terrible toll on your body. An ex-colleague of mine collapsed and was sick for a week after a business trip with an abusive boss.

Furthermore, if you have someone in your organization that is abusive in some fashion, those that can leave will. Those who don’t, have no alternatives or know that they are overpaid and stay for the money. Neither is good for the long-run health of the firm.

 

Tolerating Bad Behavior

However, too often, I hear business leaders making excuses for a member of a team who does not live their Core Values, saying, “They are too important” or “They are our top salesperson.” While this may be true, giving someone a pass weakens the Values’ importance and tells everyone that they are unimportant. 

It is recognized that the main reason top employees leave an organization is that management tolerates mediocre talent. If the Core Values are Core Values, then accepting someone who doesn’t live then is tolerating mediocre talent, and you will lose your best employees who do believe in your Core Values.

If you are willing to tolerate a top salesperson breaching your Core Values, the message that you are sending to your organization is, “Money is our Core Value.” As a result, you can expect everyone in the company to undertake whatever is necessary to make money, regardless of what your “Core Values.” No, please understand me, if money is your driver, I don’t believe that is wrong; it is what it is. However, once you have decided that money is your driving value, it is hard to claim you have others. The reason is that with Profit/Money as a Core Value, it will override any value because that is what is valued. If your Core Value is respect, but if I disrespect an employee to get a large order, respect can never rise above money. Also, I have noticed that those companies for which money or profit is the driving value always have little employee commitment because it attracts employees who believe the same thing. They will always leave for more money. Finally, most companies and people with money as their Core Values don’t have great endings, and we only have to look at Enron, WorldCom, Bernie Madoff, and Bear Stearns for examples.

 

Working with Others

However, living your core values must cover all your actions. If you have a customer that is poorly treating an employee and your Core Value is respect, you need to either get the customer to change or terminate the relationship. Again, Core Values are things we would protect over profit and while losing a customer is never easy, the message of doing so would do wonders for your team. A client of mine had a client who was abusing one of their managers to the point that the manager told his CEO that he would resign because he could no longer take it. The CEO raised the issue with me, and I pointed to one of his Core Values, which was, “A supportive environment to help all employees be their best.” It wasn’t hard to see what the decision needed to be. As in most cases, when my client contacted the client’s CEO to tell him that they were terminating the relationship, their client insisted they stay and terminated their bad behaving employee.

However, with Core Values, it is not just your employees, customers, and suppliers. Today many millennials are interested in what you represent, and they are looking at the whole picture. Thus, many are caught in a difficult situation for not doing enough due diligence or, when things go wrong, are thrown to the wolves. Many people get caught up on the wrong side of an issue because they didn’t think it through. Les Wexner sought to distance himself from Jeffery Epstein as fast as possible by claiming theft. Wexner’s saving grace was that Epstein took his own life. Still, if one looks at their relationship, it began in the 1980s. While there was an effort to distance from Epstein eighteen months after his charges in 2006, in 2019, Wexner stated that Epstein had been misappropriating funds from the Wexner Foundation. It would appear that money was Wexner’s motivation, and so he overlooked Epstein’s character. Unfortunately, this seems to be his MO as his property appears to be part of the Ohio State wrestling sex abuse scandal. 

Roger Ailes’ sexual harassment at Fox News shone a light on that organization’s values, which openly accepted sexual harassment. Although initially denied, accusations against Ed Henry, Tucker Carlson, and Sean Hannity of sexual harassment and disclosure that Fox News had paid tens of millions to settle six such claims against Bill O’Reilly were evident sexual harassment was happily tolerated at Fox News. In O’Reilly’s case, sixty companies withdrew their advertising when news of the settlements became known, causing the company to terminate his show. While Ailes and O’Reilly left Fox News, Ailes continued to advise the Murdochs until his death. Given the Murdoch’s acceptance of his values, he revealed his own, so it is apparent why sexual harassment was such an issue at Fox. As younger consumers accept BLM and the #MeToo movement, companies and their executives will have to ensure they live their Core Values.

Finally, we might see a backlash against companies using NDA and settlements to shut down any knowledge of breaches lousy behavior. In my opinion, that alone confirms that the organization doesn’t adhere to any Core Values that it would like publicized.

 

 

Time to Take a Stand

The last 13 months have been a test for many with COVID, BLM, MeToo, and the attack on the Capital last week. What has saddened me the most is how few CEOs have stood up and taken a stand. I have always accepted that politicians are not brave and follow the crowd, but with CEOs and their cry for authority at the highest levels, they cannot be silent. While CEOs are risk-averse and would argue that they want to put their heads above the parapet as they have to protect their business, the counter-argument is if you’re going to lead, lead, and do it by example. You want the “big bucks” and prestige of being a CEO, well, with all that glory and reward, there is a price, and you don’t get to claim ignorance. 

I have repeatedly said that how you have acted in the last twelve months will define your career for the next decade. Many are finding that lesson harrowing today. Cognitive dissonance and justifying away all the breaches of your supposed Core Values for profit or business relations has shown everyone what is essential, rather than what you claim. 

While it is easy for me to judge, many argue that these things are on a spectrum and are not so cut and dry. I would point you to Clayton Christiansen’s great Harvard Business Review article, How Will You Measure Your Life, where he addresses Avoiding the Marginal Cost Mistake. 

“We’re taught in finance and economics that in evaluating alternative investments, we should ignore sunk and fixed costs, and instead base decisions on the marginal costs and marginal revenues that each alternative entails. … If we knew the future would be exactly the same as the past, that approach would be fine. But if the future’s different—and it almost always is—then it’s the wrong thing to do.

This theory addresses the third question I discuss with my students—how to live a life of integrity (stay out of jail). Unconsciously, we often employ the marginal cost doctrine in our personal lives when we choose between right and wrong. A voice in our head says, “Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s OK.” The marginal cost of doing something wrong “just this once” always seems alluringly low. It suckers you in, and you don’t ever look at where that path ultimately is headed and at the full costs that the choice entails. Justification for infidelity and dishonesty in all their manifestations lies in the marginal cost economics of “just this once.”

The lesson I learned from this is that it’s easier to hold to your principles 100% of the time than it is to hold to them 98% of the time. If you give in to “just this once,” based on a marginal cost analysis, as some of my former classmates have done, you’ll regret where you end up. You’ve got to define for yourself what you stand for and draw the line in a safe place.”

Another way is to start with the worst-case and work back. Taking Jeffrey Epstein as an example, work from the worst outcome to the best and determine where on the spectrum you would find it acceptable, knowing everything you know now. I would hope everyone would say that they would not like any association with him at any level. If that is the case, then we need to be like that with all our relationships and ask how they reflect on our Core Values.

Talking about someone that I find to be abhorrent, one of their supporters said, “But his friends say he is wonderful, kind, and charming.” My response, “So did Heinrich Himmler’s, so I don’t find that a valid qualifier.”

An exercise that I do with my Vistage Groups, and I know many others do, is ask people to write their obituary as they would like to see it. Once you have done that, look at your actions and relationship today and ask, “Are there relationships and actions ones that I would be proud of when my obituary is written.” It is all too easy to justify ignorance to ourselves. However, imagine being questioned in a courtroom with your family and best friends in the spectators’ section, and you are asked how you never saw all the bad behaviors as they are laid out in front of you. While you may justify it, will your friends and family look at you in the same way again? I would hate for any of you to be a Lt. Col. Matthew Andrew Markinson.

Be brave and live your Core Values, whatever they may be, because character matters at the end of the day.

 

Copyright (c) 2021, Marc A Borrelli

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In my Vistage meetings this week, we had an interesting discussion on whether or not my members would make their employees get a COVID vaccine. While there was a brief discussion on whether or not you could legally make your employees get vaccinated, we primarily discussed what each person would do. (Apparently, you can with two exceptions, medical conditions make it dangerous and religious objections. For more see, Can I Be Required To Get Vaccinated Against Covid-19?). The results were diverse and ranged from:

  • “No!” “I would take it myself but would not force my employees to do so because they may leave.”
  • “I have many conspiracy theorists among a section of my workforce, and they will object.”
  • “No, I don’t want to be sued.”
  • “If they want to travel, they have to.”
  • “If they want to work in the office, they have to as we have health comprised people in the office.”

However, what stood out in the discussion was that none of the CEOs framed their response within their Core Values. Again, as Jim Collins says, Core Values are so important that we would be willing to lose profit rather than breach them. Thus, if our Core Values are that important, indeed, they should frame our response to the vaccination question. If we don’t, then once more, our Core Values are only words on a wall or a pad but have no impact on the organization and behavior in it. In that case, they are worthless, and your employees lose trust in your words and statements because they are just that – words, and not beliefs.

Regardless of whether your Core Values are just words on a wall or actively known by every employee, a complex issue like vaccination stresses them and how they are understood within the organization. Those of you who read my blogs know that I have said that Core Values provide employees a framework for making decisions within an organization. However, if your Core Value is “Respect,” what does that mean, especially in the COVID vaccine world? Does it mean:

  • Out of RESPECT for our fellow workers, we will all vaccinate.
  • Out of RESPECT for you, your opinion, and your decision making, we will allow you to do what you think is best.
  • Out of RESPECT for you, we will enable you to determine what you put in your body.
  • Out of RESPECT for our clients, we will vaccinate those that are client-facing.
  • Out of RESPECT for our employees’ health and decision making, we will allow those that don’t want to be vaccinated to work from home so they can’t infect anyone in the office.
  • Out of RESPECT for our fellow citizens, we will all vaccinate to get to herd immunity quicker.
  • Out of RESPECT for your health-compromised family, we will allow you to work from home until it is safe to return to the office, whether that be one month or five years.

As you can see, a single word like RESPECT can have many different interpretations, and this is where things get complicated. For example, if you determine that your version of RESPECT is the second one, “Out of RESPECT for you, your opinion, and your decision making, we will allow you to do what you think is best.” You apply that to COVID, then surely it applies to all decisions they make within the organization. While we all like to push decision-making down, the leadership team has to be able to override decisions and impose its desires in certain instances. So what are those situations, and where is the line?

Core Values are more than just words or statements. They have meaning, and the organization can only succeed if the intention is understood equally by everyone in the organization. To see how you are doing, ask your employees if they know what the organization’s Core Values are, and how they should be understood. Your employees may often find it hard to define them, so offer them situations and ask, “what should someone in the organization do?”

Here you might find a great deal of diversity of opinion. To overcome this and teach your Core Values, I think the best way is to rely on corporate folklore. Your company needs stories of the founder, the CEOs, the great people in its history, and how they behaved in situations that reflect the company’s Core Values. Having corporate folklore and ensuring that employees learn the stories and their meaning as part of the onboarding process will create greater belief in, and understanding of, your Core Values. Furthermore, make sure to repeat the folklore stories whenever a situation arises where they are relevant. Repeating them drives home learning until everyone knows your Core Values and how they should be interpreted.

Returning to the COVID vaccinations decision. Well, regardless of your Core Values, the decision of whether or not to require employees to be vaccinated will be hard. However, I would recommend that, first of all, you be a leader in your decision and state it with leadership in mind. If you want them vaccinated, be at the front of the line. Second, figure out how your decision fits with your Core Values and explain that way. Of course, it has to work; if it is a stretch or plain contradictory, then maybe you need to re-examine your Core Values.

Good luck, and may you stay safe in the meantime.

 

Copyright (c) 2020, Marc A. Borrelli

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As we have all struggled through 2020 and the difficulties of lockdowns and WFH, our core values are guiding decision making and holding us together as organizations. Talking to a senior executive recently, he said that COVID had destroyed his organization’s comradery, and no one felt connected. However, on further investigation, it appeared that the company has no core values, as they thought them irrelevant.

I find companies without clearly articulated core values can rarely define, “Why do you exist?” If you have no core values, no guiding mission, and everyone is now working from home, what bonds the team together? The only thing is the paycheck. However, we know that money is a terrible motivator. Scholars at the London School of Economics looked at 51 studies on pay-for-performance schemes and concluded:

“We find that financial incentives may indeed reduce intrinsic motivation and diminish ethical or other reasons for complying with workplace social norms such as fairness. As a consequence, the provision of incentives can result in a negative impact on overall performance.”

So, core values are fundamental. I hope you have some, and they are clearly articulated in your organization. Remember, as Jim Collins says, core values are those things we would rather lose profit over than breach. If you are undermining them, your team loses commitment to the values, and it becomes a Lord of the Flies environment with finger-pointing, denouncements, and everyone for themselves.

However, even if you do have core values, there may be three ways you are undermining them.

You Breach Them

The first possibility: you breach your core values! If one of your core values is, “We treat everyone with respect” (which I often see in companies) and you do something disrespectful to an employee, customer, or just someone outside the organization, it causes issues. The perception among your employees is that:

  • The CEO lacks personal commitment to the core values;
  • The CEO is a hypocrite; and
  • All corporate statements around behavior, mission, and values are only words and not taken seriously.

Therefore, you and your leadership team must live your core values at all times. If one of you cannot, then either they have to leave the organization, or you have to change your core values. Pat Lencioni talks of a company where once they had defined their core values, one of the leadership team resigned, saying, “I cannot live that value, and if that is the value of the organization, then I should go.” It can be hard to enforce them, but it is better for the organization in the long term.

You Allow Others to Breach Them

As mentioned above, the CEO and leadership team must live the company’s core values. However, if you allow others within the organization to breach them, it leads to the issues described above. I have often seen that the leadership team provides a pass for some employees because they are high performers, e.g., top salesperson or IT person. The rationale is that we cannot survive without them, and so we will tolerate their failing to behave because it is more important to keep them than maintain our core values. However, as Jim Collins points out, you should be prepared to take a loss to live up to them, so you should be prepared to lose these employees to keep your core values.

I often have CEOs and leadership teams struggle with what to do about such “toxic” people, and at the end of the day, after much pushing, they let that individual go. What usually happens is that company morale improves, core values become believed in, and productivity increase above the levels that were there when the toxic person roamed the organization.

Your Employees Are Confused as To What They Mean

Of the three reasons, this is probably the most common, because it is the easiest to do. I have said the worst two inventions for the corporate world were Excel and PowerPoint. The former encourages accuracy without precision, and the latter because we have lots of presentations where everyone has their interpretation of what the meaning was. This lack of definition is pervasive with core value statements.

You need to explain the meaning of core values. Reinforce them by recognizing examples of the team’s correct behavior, and explaining why specific actions are not core values even if they appear to fall within the definition. If you don’t, employees will weave their interpretations and ideologies into them. The employees’ ideologies and interpretations may take the core values further or in a different direction than the CEO intended. However, once the employees have taken them there, the CEO and leadership team’s opportunity to breach them increases dramatically.

If a core value is “employee growth and belonging,” without being clear as to what this means, it may be interpreted as:

  • Employee empowerment to do more than they should.
  • A family environment where the growth is limited to ensure that family feeling
  • Communication is equal, and everyone has a voice at all levels.

If that is not what the CEO intends, but it is what the employees now believe, it becomes only a matter of time before the CEO crosses the line and breaches the core values in the employees’ minds.

The problem that most often happens is that the employees don’t consider if their interpretation of the core values was wrong; instead, they assume that the CEO is a hypocrite and doesn’t care about the core values. Employees are unlikely to raise the issue that they think the CEO and leadership team have breached the company’s core values because the values of “Open Door” and “Bring me the bad news” are now just considered words rather than values. Thus, the negative spiral starts.

To prevent this, leaders must spend time asking employees what they are thinking and feeling, as well as sharing their own thoughts so that the employees will feel comfortable expressing their concerns.

To ensure that the understanding is correct, the leadership team needs to reinforce examples of behavior that supports their definition of the core values. When they see actions that don’t mean the intent, call them out and explain why it doesn’t fit the core values. Also, recognizing individuals’ living core values within the organization reinforces the organization’s commitment to the core values. Finally, the CEO and leadership team need to be aware of when they breach the values, admit their failures, and commit to living to those standards in the future.

I hope as we end the year, you CEOs and business leaders will take time to recognize those in your organization that has lived your corporate values during the struggles of 2020 in your one-on-one meetings. It will provide a great deal of goodwill and encourage the behavior far more than the usual “Rally around the flag” speech at the end of the year.

 

Copyright (c) 2020 Marc A Borrelli

 

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CEO, Try Thy Hiring System

CEO, Try Thy Hiring System

Over lunch this week with an ex-colleague, she described the trials and tribulations of her job search. Her frustration was not that she was looking. Rather, she had received a verbal offer from the company but was now dealing with the HR Manager who was playing “bad cop,” contradicting her boss-to-be and backtracking on items that had been agreed upon.

This discussion brought to mind the many horrible hiring experiences I had been through in my career.

Many companies forget that hiring is like going on dates, because you will be married at the end. When we are in the dating world (for those of you who remember), it is an exciting and frustrating time. We are looking for someone who excites us; we wish to excite, be compatible with, and believe together can be more significant than just two individuals. It is the same in the job search. We are looking for organizations that excite us, whose mission motivates us, whose employees impress us, and where we can add value.

In many organizations, those hiring and those in the HR (Human Remains) Department forget this. They don’t realize that perception is reality. Their behavior kills the “dating” process, drives away the “A” candidates, and destroys a successful long-term relationship with those who stay. Things that kill the dating or long-term relationship are:

  • Not treating the applicant with Respect.
  • Not keeping appointments or to the schedule.
  • Bad communication.
  • The offer differs from what you were told.
  • Probation periods.
  • The First Day

One of the common refrains I hear from CEOs is that they struggle to find good people to hire. As I thought of the hiring process trials, I wonder how many good people have driven away because of the process. Given the cost of bad hires and the entire hiring process, how much is wasted because the hiring and onboarding process is so damaging? Remember, Every system is perfectly designed to get the results it gets.” So what is your organization’s hiring system designed to do?

 

Respect!

Like Aretha Franklin, everyone wants Respect! From my job searching experience, at some point, the applicant is called in for a day of “interviews” where the applicant gets interviewed by four or more people that they will be working with, including their prospective boss. Usually, this day is where the lack of Respect starts.

Some who are doing interviewing feel put upon to interview candidates and come across as either superior or just jerks. During one interview I had, the World Series was on, and the person supposedly interviewing me was watching the game from a small TV that only he could see. As a result, he never heard my answers to his questions, there were long pauses in the discussion while the game absorbed him, and the interview ended early at my suggestion. I declined a second round.  

Now I realize that people have things come up, and some crises have to be dealt with; however, Respect is still required. One company that I interviewed with canceled three separate interviews while I was sitting in the lobby waiting for the interview with the CEO. When on the fourth attempt, I finally did meet the CEO, he was abrupt. He didn’t acknowledge the canceled meetings and the imposition on me. Now, most will say, you are an applicant; why should he. But you never know where the applicant will end up, and one day they might be a customer. In this instance, while I didn’t get a job at the company, its reputation was tarnished in my mind forever, and where I could, I avoided doing business with them. The fact the CEO treated people like that meant to me that they treated everyone like that, and that was not the type of organization with which I wanted a relationship.

 

Keeping your promises

Once you have been through a few job search rodeos, you know to ask, “What is your process?” Applicants want to know how many interviews they can expect, how long the process should take, where the decision points are, and for “A” players – how they manage competing offers to ensure they get the best one. Unfortunately, many companies forget that their answers create expectations that can drive excellent applicants away or kill any long-term relationship if not met.

My lunch companion complaining that the HR person she was dealing with had failed to make any of the appointments they scheduled, without explanation or reason, but had called out of the blue at other times. This behavior creates the impression that the hiring company is chaotic at best and cannot be trusted worse, so the applicant is likely to question where they are being misled.

Once, interviewing for a VP of International M&A position with a Fortune 100 company, my prospective boss laid out how he saw the department going forward. We spend time discussing my role in creating his vision and the challenges he wanted me to tackle once I started, which he emphasized he wanted as soon as possible. However, he noted that I needed to have interviews with the head of legal and HR before they would send me an offer. Those interviews did occur, and at the end of the interview with the head of HR, she informed me that I would hear back within a week. Three months later, I received a call from someone in HR whom I never met or heard of, offering me a Manager’s role in a different department, which I respectfully declined. I already had another job by then, but again I had lost all Respect for that organization. Interestingly enough, in the 18 years since then, its market capitalization has fallen by 67%.

 

Bad Communication

Once upon a time, after a day of interviews, I received an email from the company addressed to someone else telling me that they were not interested in pursuing the discussions any further. I replied, thanking them but asking if the email was meant for the other person and sent to me by mistake or meant for me, but they had typed in the wrong name. The response was, “Both.” Such errors don’t impress people.

However, as is my MO, I reached out to the senior HR executive that I had met during my day of interviews, asking for feedback on why I had not progressed through their process. He responded with shock to say that I was still in the process and wanted me to come the next week to see the CEO.

After this great start, one has to once more question the organization.

 

The Offer Differs from What You Were Told

Often in the process, your potential boss will tell you that some conditions you ask for are acceptable, e.g., start date, vacation, options, etc., only later to be contradicted by HR. HR informs you that this is the firm’s policy, and it is non-negotiable. Managing situations like this are difficult and cause more mistrust because sometimes your potential boss cannot deliver what they promised. As a result, you question their power within the organization, or worse, it creates further doubt about the organization’s core values and ability. In such situations, you begin to wonder if you are dealing with the Job Enthusiasm Killer Department and soon to be working in some Kafka nightmare.

 

Probation

I know many firms like a probation period to determine if the employee is a good fit; however, remember most employees start a new job full of excitement about what they will achieve at their new company. It is like getting married, and they are waiting at the altar for this wonderful new life when the other party says, “Yes, you are committing to the marriage, and it’s our vows, but me, I am not committing for a few months or so until I am sure.” In such cases, by the time the probation period has passed, the employee has lost their enthusiasm, they are now looking for their next gig, and the company is wondering why they can’t keep good people.

If you have a probation period, inform the applicant upfront, so this doesn’t surprise them. Not only that, but if you do, go all-in with commitment. The more the organization holds back, the less likely there will be a long term relationship.

I once joined an organization, and there was no mention of probation during the hiring process. However, as I logged into my computer on my first day, I could not access the network. I was informed that during probation, they kept you off the system. Thus, any files I needed had to be copied onto a disk (Yes, a bygone era) and brought to me, or I had to give them to whoever needed them on a disk. This event was the first I had heard about any probation, and the message was welcome to the team, you second-class citizen. Nonproductive and soul-destroying!

At the end of the first week, my boss asked me to go to Japan, Taiwan, Hong Kong, and Thailand on a Business Development trip. When I asked when I could expect my business cards, I was told that new hires could not get business cards until they had finished their probation. Since I now knew I was on some form of probation, I tried to explain to HR that in Asia, business cards are essential; however, the person would not yield. As a result, I traveled with some I printed up myself, which looked like it and I am sure did lots to promote the organization’s standing in the Far East. Once more, perception is reality, and I am sure the HR person was “following orders” given by someone who had never traveled internationally.

 

The First Day

Data shows that over 50 percent of new employees regret the decision on their first day, and after three weeks, it is closer to 70 percent. Suppose you accept Richard Branson’s view that happy employees make happy customers. In that case, you will realize that if your organization is one where 50 percent of your new employees regret their decision to join you the first day, you have a huge uphill task to build customer satisfaction.

I have been among the 50% because the first day was so demoralizing. As I have said above, you arrive at the new job full of excitement only to be sent to HR hell to fill out a massive pile of forms. Surely these could have been sent beforehand, and you could bring them completed. There is nothing in them that I have ever seen that is so sacred it could not be shared outside the organization.

After this beautiful ritual, you are shown to your desk, whether in an office or cubicle. For some reason unknown to me, in every new job I have had, my boss has not been there my first day to meet with me and show me what I need to tackle. As a result, you arrive to a note saying, “Welcome and make yourself comfortable.” They may have scheduled some meetings for you with other people, but it usually mentions a name and not who they are and how you will be working with them.

A colleague once told me that she went to the stationery cupboard on her first day to get some supplies, only to be berated by a PA who informed her that her department could not access that cupboard. Again, thanks, great to be on the team.

If you are lucky, some of your workers may invite you to lunch on your first day. Indeed this is the least that they could do to make you feel welcome. So, after a wasted day trying to figure out what the unwritten rules are, where the political minefields lie, and whom you can trust, you head home wondering, “What the hell have I done?”

As I have asked before, is your onboarding process more akin to waterboarding?

I love Cameron Herold’s attitude of having a new employee party their first day to welcome them to the organization. However, when they leave, there is no going away party because you will no longer add any value to the organization. Furthermore, that night they ask for your bucket list and commit to helping you achieve an item on it during your first year. Now that is a welcome and one which makes you want to die on the hill for that company.

 

What to do?

A CEO friend of mine once told me that he used to call the CEOs of companies that his sales team had targeted. The purpose was to find out how the sales process was going and if his organization was responsive to the potential clients’ needs. He found this process made his sales team far more responsive to potential clients, honest with their targets, and he learned what worked and didn’t in the process.

If you are struggling to find good people, question if your system delivers the results it is designed to provide. Review your hiring process to figure out what is going on. I would suggest sometimes doing surveys with applicants to find out how they found the experience of applying for jobs with your companies and new hires. Remember back to when you started your career with excitement, what tied you to a boss or company, and what drove you away. Make sure your organization is doing the former and not the latter.

 

(c) Copyright 2020, Marc A. Borrelli

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What is Leadership?

What is Leadership?

I was on an interesting call this week where the question of “What is leadership?” arose.

Today, there are many definitions, and the concept of leadership has changed over the last seventy years. However, I think the adage that “Great leaders are forged through adversity” still holds. In adversity, great leaders come to the fore as they can get their teams to outperform others during that period when everyone is struggling to achieve their goals and leave a lasting legacy. To me, the “adversity” qualifier is like Warren Buffett’s saying about you don’t know who is swimming naked until the tide goes out; well, adversity is the tide going out.

So, what defines a great leader? Let’s start with the things that don’t.

  • Leadership has nothing to do with seniority or one’s position in the hierarchy of a company. In most cases, people are promoted to leadership positions because of tenure or technical skills; leadership ability is rarely considered.
  • Leadership has nothing to do with titles. Just because you have a C-level title doesn’t automatically make you a “leader,” and you don’t need a title to lead. A great example is Greta Thunberg who has become a leader but without title or seniority.
  • Leadership has nothing to do with personal attributes. While people often associate “leader” with a domineering, take-charge charismatic individual, leadership isn’t an adjective.
  • Leadership isn’t management.  This is the big one. Leadership and management are not synonymous; managers manage things. Leaders lead people. Given the above qualifiers for what leadership is not, some definitions try to capture it but fail.

“The only definition of a leader is someone who has followers.”

This definition, while simple, fails because it is similar to titles. In the video above, the first one dancing is the leader, but I doubt he is still leading once the followers start.

“Leadership is influence – nothing more, nothing less.” This sounds good, but what is the source of influence? If it the leader’s position, e.g., the CEO or the power to cause harm, e.g., your kidnapper, I wouldn’t define it as leadership.

“Leadership is the capacity to translate vision into reality.” Many can translate a vision into reality. An architect or a builder? A painter or sculptor? But I wouldn’t define them as leaders because there are no “others” that they are leading.

Maybe looking at the traits of great, leaders we can better come to a definition. What are the traits of great leaders?

 

Acknowledge people’s fears, then encourage resolve.

The first part is empathy. While this is a personal attribute, which is excluded under the definitions above, I believe without it, you cannot be a great leader because it enables so many of the key attributes. By acknowledging people’s fears, we don’t cover up the crisis and deny its existence. But with the fears on the table, we can then address them and encourage resolve to overcome them. In a crisis, everyone knows that things are bad, but much of the energy and fear exists because of the unknown. Being honest about the situation and facing it allows people to come to grips with the unknown, which enables them to move forward.

 

Give people a role and purpose.

Real leaders charge individuals to act in service of the broader community. They give people jobs to do. But I would add to that; they frame everything within the outcome being sought so that the jobs are not mindless but have a purpose which they can see. It is not about the leader but the great community. I think Shackleton was a great example of this, but I always fall back to David Marquette’s Turn the Ship around.

Inspire others to see opportunities in everything.

There is no playbook in a crisis, so it is up to the leader to be open-minded enough to find possibilities that will help serve their community through their discussions with their team and their data.

 

Be flexible to anticipate the unexpected.

As said above, there is no playbook in a crisis, and leaders must quickly get comfortable with widespread ambiguity and chaos. To get out in front of the crisis they cannot be fixed on any one route but need to see around, beneath, and beyond what they seek. To fully succeed here, they need to get their followers to be flexible, which requires them to understand the greater goal and their role in it and use its core values as their guidelines.

 

Manage everyone’s energy and emotion, including their own.

Crises are exhausting, taking a toll on all of us and possibly leading to burnout. A critical function of leadership is to keep your finger on the pulse of your people’s energy and emotions and respond as needed.

 

Unleash their team’s passionate pursuits.

Passion is what drives experimentation and learning. If everyone is passionate about the outcome, they will seek new ways of addressing the crisis, and great discoveries will be made. Not only will passion drive greater discovery, but it creates more energy. The best example I can think of Apollo 13.

 The Respect to Lead to Leave a Legacy.

Legacies are born during crises. While leaders are most respected based on how well they reacted and responded to all the chaos and uncertainty around them, I believe the key measure is how much of a legacy they leave. Does the organization continue to thrive when they are gone? Do the others in the organization go on to greater and better things? Are the behaviors that enabled it to survive and thrive now part of the company’s DNA. There are many leaders who get the organization through a crisis but leave no lasting mark. I would argue, that they are not great leaders.

So, in conclusion, I would define Leadership as, “A process of social influence, which maximizes the efforts of others, towards the achievement of a goal, and leaves a lasting legacy.”

The key things about this definition are:

  • Leadership stems from social influence, not authority or power
  • Leadership requires others, and that implies they don’t need to be “direct reports”
  • No mention of personality traits, attributes, or even a title; there are many styles, many paths, to effective leadership
  • It identifies the maximization of “efforts”
  • It includes a goal, not influence with no intended outcome
  • Finally, it ties in with a lasting legacy.

Not everyone will become a great leader, but everyone can become a better leader and your organization will thank you. So, start your journey today and if you need help, call me.

 

Copyright (c) 2020, Marc A. Borrelli

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Yes, We Are a Country (Team) Divided

Yes, We Are a Country (Team) Divided

So, as we await the final election results, the only thing that is abundantly clear is that we are divided as a country. Fifty percent wanted a change, and the other fifty percent didn’t. I don’t intend to discuss the whys or rights of either side. However, this has enormous implications for any leader.

As you sit with your team, you have to realize that fifty percent don’t agree with your view of the world, regardless of what they say, and fifty percent do. Previously, the difference was harder to discern. People kept opinions to themselves and didn’t get drawn into political discussions. However, with the polarization of COVID, we now know where people stand from how they feel about masks and social distancing. Regardless of what your people say, they are already deciding how they feel about issues and teammates, those they disagree with, and those they are damning.

However, as a leader, you have to get all these people to pull together, support each other, and achieve more as a team than they can individually. The key is, how?

There are two ways to lead people:

  • Divide people. Create a mutual enemy and lead a crusade to conquer it. Life becomes a life or death situation; the sense of urgency provides unconditional support. Conquering, winning at-any-cost, is all that matters.
  • Unite people. Find a common cause, a shared ambition, and inspire people to build it with you. Make it a life quest, and people are united by the the mission to build something bigger than themselves. The desire to leave a lasting legacy is what keeps the people joined in the mission.

So how do you intend to lead your organization?

 

Dividing People

The dividing strategy has been around since the beginning of time; Julius Cesar’s supposed strategy for conquering Gaul was “Divide et impera.” Gaul. As a leader, Nicholas Machiavelli believed it’s better to be feared than to be loved, and the leader should rely upon the art of manipulation to build followers and allies. As George Orwell put it so well in 1984, “The Party believed that they could endlessly engage in a war to keep peace in the country.”

Such leaders use the illusion of division to create a fictional reality. They are compulsive storytellers, using every opportunity to feed anger and violence. One of the problems is that anger is a powerful motivator but hard to sustain in the long run. So, the stories and illusions have to become worse to drive the same level of anger. It is not sustainable.

In some organizations, the competition is the enemy and the desire to destroy it at costs. Someone once told me that everything was portrayed as a life and death battle to destroy their biggest competitor during their corporate orientation. Leadership used every war analogy, including death chants about the competitor. One day he was ill with 104 fever, and there was a blizzard outside. He called his superior to say that he could not make it in, and the superior’s response was, “You will allow [the competition] to fight for another day, causing untold damage on us. Get up and fight to kill them. We need it done today.” They urged him to die on the altar of the war between the companies.

The problem with the deception strategy is it only works in the short term; in the long run, people separate fiction from reality. Leaders who use the divide and conquer approach often create a de-individuation environment, where individuals let go of self-awareness and self-control to imitate others, and one’s individuality becomes lost in the group identity. In such a situation, the organization’s threats are groupthink, and no one stops asking the critical questions as the mob rushes forward with the pitchforks and torches.

When we are so polarized and angry, many may think the divide and conquer strategy the best, as people are already on that path, and we have to refocus the anger. However, when angry and divided, divisions are more easily sown within the group. Suppose problems arise within the organization, the anger quickly moves from an outward focus to an inward one, e.g., production is not keeping up with orders, or customer service is losing our customers. Once the divisions start occurring within the ranks of the organization, it is hard to stop. Enemies and anger spread, and trust falls. The team is dysfunctional. The company is adrift without strategy or guidance, as those within fight among themselves, but the leader is safe.

Focusing on division and a common “enemy” makes it hard to live your core values in many cases. If one of your core values is to treat everyone with respect, then it must apply to your perceived “enemy.” However, that goes against the strategy and dies. Soon there are no core values left, and the only guiding light is winning at all costs. In this environment, the ends justify the means, and the organization destroys everything. As Attila the Hun said, “There, where I have passed, the grass will never grow again.”

I would argue that today, this is the worst way to lead. Leaders choosing this tactic are playing with fire and one that they cannot control.

 

Uniting People

Leaders who unite people are “builders.” They take a different approach; they don’t tell you to follow orders, but rather to “Join me and follow the mission, not me.” Such leaders and their follows are driven by a purpose bigger than themselves. They are more focused on the impact on society than quarterly earnings. It is not that the latter doesn’t matter, but making money is not enough. Studies show that when leaders connect to a meaningful purpose, it is more likely for employees to connect to it and work harder to achieve their goals.

Thus, it takes far less energy to motivate the employees and customers because their excitement with the mission does a lot of it for you in such an environment. The focus on the mission also allows the team to collaborate effectively. The principle is the mission’s success, which makes them feel good, overriding the divisions in other areas.

However, while getting everyone to follow the mission, there are two dangers: the rise of the “Messiah” within the organization and groupthink. First, leaders focused on the task can become the paramount leader where what they say goes, as no one is allowed to question the Messiah. Second, groupthink creates such an environment where, once more, “the ends justify the means.”

The organization’s core values are essential to ensuring that neither of these outcomes occurs. If, as above, a core value is “Treating everyone with respect,” then those who disagree are not denigrated in such an organization. They may not be on the team, but hatred is not directed at them, and as such divisions are less likely to occur.

In today’s environment, it is worth revisiting your mission, “Why do we exist?” It is also a great time to look at your core values and see how they fit with the organization’s mission and drive behavior. In many organizations, I am aware of, they have core values, but even the CEO cannot articulate them at a moment’s notice. In such organizations, they are just words on a wall. They are not core values. To find your core values, ask your team. “What are the top, non-illegal activities that would get you fired from this organization?” The answers are the opposite of your core values. Compare them to those words on the wall – do your people know and live your core values?

However, while we often have our core values posted within the office, we don’t ask what they mean. Take, for example, Google’s corporate philosophy of “Don’t be evil,” which the company had in the 2000s. An ex-Google employee told me that there was lots of internal debate about its meaning and what actions were allowed. Many core values sound good, but on examination, the organization has done little to define what they mean or show how to live them in difficult situations. Here corporate folklore is of enormous importance. Your organization needs lots of stories that demonstrate the living of its values that are shared with everyone, from new employees to customers. As humans, we love stories and relate to them more than words. Suppose your organization has many stories about how it lived its core values in difficult times. In that case, your employees will know the corporation’s values and how to behave when similar times arise. As I am sure few companies will have a core value that includes the words, hate, discrimination, etc., these behaviors are less likely to develop.

In a divided country, you need to reinforce your core values, live by them, and, as Jim Collins says, be prepared to take a loss to live by them. Start recognizing everyone in your organization that does demonstrate your core values and allows others to do the same at meetings. It needs to be a part of your hiring and review process, as this is the glue that will hold the organization together in a COVID world. When you are hiring, looking where the applicant worked previously, and that organization’s core values may help you decide if they will fit with your team.

Our core values are far more similar among most of us than we realize. If we believe in those together, we can overcome our other divisions and have a friendship because the bonds outweigh the divisions.

Finally, I believe teams need to look at Special Forces teams, e.g., SAS, Seal Team 6, SBS. What I think makes them so effective is that:

  • They are solely focused on the mission;
  • Their core values are paramount;
  • They discuss openly and to determine the best plan to execute the mission. Nothing is personal, but everything is open to challenge;
  • Once the plan is adopted, there is full buy-in from the entire team. No one is sitting with their arms folded, hoping it fails so they can say, “I told you so.”
  • They know when the mission is no longer viable, and they need to determine a new mission; and
  • They undertake extensive post mortems on the plan to learn how they could be more effective and what mistakes were made.

At this time, I would suggest all leaders look to their mission and core values to unify their teams and lead their organization more effectively through the country’s divided landscape. Reach out if you need help defining your mission, BHAG, and core values.

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