The interview with Jack Welch was the reason I signed up for the Leadership Summit. I overheard someone at the conference say that “Jack Welch is the greatest leader since the Pharohs”. Maybe that was intended as a hyperbole but it’s not totally crazy. Jack lead GE from a market capitalization of $15B to $440B and during that time over 40 of his top people went on to become CEO’s elsewhere. At one time 5 of the Dow 30 were run by former GE people.

The interview didn’t disappoint, Bill Hybels went right into some of Jack’s most central, and controversial ideas, candor and differentiation.

Jack said that candor is essential to leading an organization, it’s a huge time saver, and required for performance. When we sacrifice candor for “niceness” we end up having to  to have lots of side meetings; “meetings to decide what we will say at the meeting, meetings after the meeting to figure out what the meeting meant, don’t do that, just say what you mean, how you feel.” Jack went on to talk about how many people feel that formal appraisal systems are useless, because we don’t tell people the truth. How do we expect people to perform better without honest feedback?

Appraisals are also core to Jack’s management philosophy. Every 6 months at GE he did formal appraisals of 100% of his management team. He then ranked them according to performance, from the best to the worst. The top 20% he rewarded lavishly, “You can’t give them too much”. The middle 70% got good rewards, “we need these folks to work hard, they are the backbone.” And the bottom 10%? They should be gone by the next review, either performance improved or off to another organization.  This has always been a very controversial part of Jack’s management system; but he was unflinching in his defense of it. “Would you run a baseball team that didn’t appraise the player’s performance? Of course not, we need feedback in order to get better. Why wouldn’t we want to give people rigorous, honest feedback?” It’s not just the compensation that got concentrated on that top 20%. That’s where you should spend your time as a leader, mentoring and coaching those top 20%. You can’t spend any time with the bottom 10% (that’s why we want to move them out).

The biggest problem with this system, Welch says, is with those that are ranked 21% to 25%. “You have to emphasize that it’s just a snapshot, just a moment in time.” Encouraging them to work to be at a different point at the next review.

It strikes me that these two elements reinforce one another. If you maintain a culture of candor, you can do rigorous reviews without bruising feelings. If you do rigorous reviews, providing feedback that honestly helps people to improve, then people value the candor and realize that it’s worth the risk to not hide behind nice.

But the biggest shock of the interview, the comment that literally took my breath away came when Bill asked Jack what his biggest mistake was; Jack replied, “I moved too slowly.” When he first took over as CEO of GE, Jack introduced massive change. He decreed we will be #1, or #2 in every market we serve, or we will exit. He changed how they hired, promoted and paid people. He nearly had a revolt on his hands!

But in retrospect he feels that he moved too slowly. Quicker decisions lead to quicker feedback, so you can either reap the benefits (if you are right) or eliminate that option (if you are wrong). Making more decisions quicker means that you learn faster, develop confidence in your decisions and get results sooner. If you rigorously evaluate and stop things that aren’t working then moving faster is your best friend.

Hearing Jack Welch say these things himself, and explain himself, had such an impact. This wasn’t just words on a page, or ideas in a book, this was Jack Welch giving our pearls of wisdom and that is what keeps me coming back to the Leadership Summit. (By the way, they are already taking registrations for next year’s summit if you want to get on board.)

How can you be moving faster? Where do you need to live in more candor?

Do you ever hear someone say, “I had such a great day! My boss looked over my shoulder all day and corrected every little thing I do. Oh, I loved it.” No, people hate micro-managers. Why? Because it violates all three of the drives that Daniel Pink describes in his newest book (Drive) and in the talk I heard at the Willow Creek Leadership Summit. Every human has an innate drive for these three things, Autonomy, Mastery and Purpose.

Autonomy is the drive to work on our own, to make a difference in the way that we see fit.  Different people have different degrees of autonomy that they desire, but we all want the opportunity to make our own decisions. There are 4 areas in which we can give people autonomy over their time, team, task and technique. Daniel used a lot of examples when management chose to release all controls, and the results were outstanding.

Mastery is the drive that is exhibited when someone spends his/her weekend practicing the Oboe, or carving a wooden duck, or taking up painting in retirement. There is no economic benefit, and very little social benefit to be gained. Instead there is a basic human need to be good at something. Nothing is more motivating than the feeling that you are making progress; your work is getting results.

Purpose as a motivator has been talked about in many contexts. Jim Collins discussed it extensively in his book “Built to Last”. It’s clear that employees who feel that they are working for something more significant than putting more dollars in the owner’s pocket are more engaged and committed. Just look at organizations like Tom’s Shoes where event the customers are engaged in building the brand because it’s not (primarily) about making money.

Pink’s talk left me thinking more deeply about how I can celebrate when my team members & clients develop mastery. How can we provide opportunities for team members to know that they are making progress? Leadership and management is so vague and ephemeral that it’s hard to judge or realize when we are becoming more masterful at it. How do we demonstrate or measure it so we can celebrate progress in that area?

It also made me want to go further in helping team members to achieve more autonomy and realize purpose. You can hear a little more at this video from TED.

What are you doing to increase motivation and engagement of your people?

I spent Thursday and Friday of last week at the Willow Creek Leadership Summit (#wcagls if you’re interested). It was an amazing conference where I saw some truly world class speakers talk about being a leader and leading people. One of the speakers I was most looking forward to hearing was Jim Collins he’s an amazing guy, and a personal hero.

His talk was based on his book “How the Mighty Fall” which I read when it first came out. It contains many of the ideas that you heard in “Built to Last” and “Good to Great”. He seems to be getting sharper, with time. Boiling his ideas down more and more, I really enjoyed “How the Mighty Fall“ and this talk about it.

In “How the Mighty Fall” Collins talks a lot about Hubris; it’s one of the signs that your formerly great, growing company is starting to falter. One of the most earliest expressions of this (in terms of warning signs of the future fall) is when you pursue growth that requires more “A” players in your leadership team than you can build, or recruit. When you start accepting “B” players into your management team it’s an early sign that you are headed to failure. You see if you are planning rapid growth, how could you possibly accept “B” players?  It’s a clear violation of the idea of “first who, then what” from “Built to Last”.

Your company is built on your management team, they are the foundation, the base on which everything else is built; and when they are not 100% committed to the vision, and values and built out of the strong character and culture that your firm is built out of, your organization is in danger.

I was so struck by this; I know I have been guilty from time to time of being expedient, of picking people who aren’t the right people, but they were the people who were there, and it has burned me every time. FIRST find the people, the right people, then grow the business.

This is hard, finding the right people takes a lot of work. I’m recommitting myself to the talent pipeline, to constantly being on the lookout for the next great person to add to my firm, and my client’s firms. It’s critical to success.

Jim was also very passionate when he talked about discipline. “Greatness,” says Collins, “is a matter of conscious choice and discipline.” It’s a cumulative process, not one big decision. Instead it’s 100’s of right decisions that build upon themselves. This is why discipline is so important. Jim pounded hard on his idea that “Disciplined people engaged in disciplined thought taking disciplined actions are what create steady progress over time. Whether you prevail or fail, endure or die, depends more on what you do to yourself than what the world does to you.”

He finished up by giving us a to-do list to keep our organizations growing and sharp; here it is:

10 To-Do’s

1. Do Your Diagnostics: Check out the Good to Great Diagnostic Tool available free at www.jimcollins.com
2. Count Your Blessings, Literally: When you begin to account for all the good things that have happened to you that you did not cause, all the success you did not cause are humbling. Count it.
3. What is your Questions to Statements Ratio? Can you double it in the next year. Great leaders don’t know all of the answers, they ask great questions.
4. Answer the Question “How many key seats do you have on your bus?”
5. Do the How the Mighty Fall Teams on the Way Up/Teams on the Way Down Diagnostic
6. Create an Inventory of the Brutal Facts: Only by confronting the facts of your situation can you make a clear plan to success.
7. Stop Doing Something: Great teams/companies are defined by what they’ve said “no” to so they can pursue what they are called to truly be doing.Jim suggested a “don’t do list” to help keep us focused on the disciplines that will lead to success.
8. Define Results and Celebrate Progress: Since no one thing is going to lead to success, you need to celebrate all the little things that will.
9. Double Your Reach to Young People by Changing Your Practices without changing your Core Values.
10. Set a Big, Hairy Audacious Goal

Several other folks in the audience (7,000 people attended live and over 60,000 through satellite) have published more throurough notes from Jim’s talk. Tim Schraeder has a nice outline of the talk, and Kristen also kept pretty good notes. Check them out if you want a deeper dive.

Later in the week I’ll report on Daniel Pink’s talk, and the amazing interview with Jack Welch.

Photo courtesy of flickr.com/photos/yourdon/

Is this worthy of my full attention? I’ve been asking this question a lot lately.

It started when I saw a number of articles about the high cost of multi-tasking. There’s this study out of London that found “Those distracted by incoming email and phone calls saw a 10-point fall in their IQ – more than twice that found in studies of the impact of smoking marijuana”. Or this series from the New York Times about the dangers of parenting while plugged in which says that “feelings of hurt, jealousy and competition [from their parent's technology] are widespread”. Lastly there was Peter Bregman’s blog post at HBR.org in which he describes his process of giving up multi-tasking. Working with a single focus enabled him to make significant progress on important projects, reduced stress, and improved patience. This all sounds good!

So if the benefits of paying attention to what we are doing are high, and the costs of multi-tasking are severe, why do I keep trying to do things while I’m distracted? The sad truth is, I multi-task when I get bored. That’s right, if I’m  on a conference call (even with you) and the conversation strays to a topic that I don’t need to be 100% on top of, my eyes will flit to my twitter stream, or I might check my email (it’ only takes a few seconds, I won’t miss anything). When there’s a lull in our dinner table conversation; maybe I’ll check the weather for tomorrow… It’s insidious. It’s so easy to avoid even a moment of boredom that I will do it almost every time. The problem that the “escape” to technology poses is that instead of choosing what to do with that moment, I spend that time scratching my anti-boredom itch.  Do I need to know what tomorrow’s weather is? Are those updates in my twitter feed really that important? What if instead I listened to the conference call to see if there is something I can add? Or if there isn’t excuse myself to get something more important done, or redirect the conference call to matters that are truly valuable and engaging to everyone on the call.

When I flit to technology to easy my boredom everyone loses, I’m not present, I’m not giving my energy and attention to the conversation and if we all do it, then someone rambles on with no one listening, and they get no feedback that they are boring. Yikes!

This is why I’ve started asking the question, “Is this worthy of my full attention?” If it’s not I should move on, if it is I should pay attention. Nothing is worthy of my partial attention, nothing.

I need to be clear and set good boundaries, either this is worth my time or it is not.  But beyond that, there might actually be a value to being bored. Peter Bergman again:

“Being bored is a precious thing, a state of mind we should pursue. Once boredom sets in, our minds begin to wander, looking for something exciting, something interesting to land on. And that’s where creativity arises.

My best ideas come to me when I am unproductive. When I am running but not listening to my iPod. When I am sitting, doing nothing, waiting for someone. When I am lying in bed as my mind wanders before falling to sleep. These “wasted” moments, moments not filled with anything in particular, are vital.

They are the moments in which we, often unconsciously, organize our minds, make sense of our lives, and connect the dots. They’re the moments in which we talk to ourselves. And listen.

To lose those moments, to replace them with tasks and efficiency, is a mistake. What’s worse is that we don’t just lose them. We actively throw them away. ” (From “Why I Returned my iPad” on Peter’s Blog)

Is being bored worthy of my full attention? Sometimes it is.

So the Bulls fired Vinny Del Negro today. Given the recent events and “dust up” among the Bulls management I would have liked to be a fly on the wall during the meeting that Jerry Riensdorf had with Vinny, John Paxson and Gar Forman. The higher up you get in any organization the more you have to deal with problems, and while I hope that your executive team doesn’t start shoving each other and pulling on their ties, if you run the place it’s going to be your problem. Sooner or later you are going to have to fire someone, perhaps several people; in fact you might get to where you are kind of good at it. If your not to that place yet here are my 5 tips for saying, “You’re Fired”.

When the time comes when you have really given up on one of your team members, you know it’s time for them to go, that sense of dread starts to set in. Maybe you are dreading the actual conversation, or maybe you are dreading having to search for someone new, but we all tend to procrastinate having this conversation. To Jerry’s credit he didn’t – as soon as possible after the season ended he sat down and had a conversation with Vinny – and we should too. Any time that you spend avoiding the conversation is only going to make it worse. More time would have just left Vinny hanging in uncertainty and a cloud over your head.

Once the decision has been made, have the conversation. The conversation you are going to have should be brief; “I’ve made a decision, we are going in a different direction. Let me review this paperwork for you about what this means for you…” This isn’t a time to recount what went wrong, or a list of their failings. To do that just invites a conversation and a debate, when in fact you are delivering news. If they want to go over reasons for your decision offer to make an appointment next week to sit down and do that, but the purpose of your meeting is to inform them of your decision and it’s implications (e.g. turn in your keys, your health plan is… Your severance is…) By all accounts Jerry didn’t do this, but wanted to rehash all that lead to this point. As a result Vinny made his pitch for why he should stay, when in fact the decision was already made that he would go. This is a waste of everyone’s time. Just deliver the news and move on.

Helping your employee to move on should be a key part of the goal of your conversation with them. They are fired, that’s a fact, and no amount of rehashing (with you or in their own head) is going to change that. In the Bull’s situation any time that Vinny spends trying to defend himself, or recast the story of the firing is wasted time. He needs to concentrate on where he will be coaching next season; and the Bulls should do everything in their power to make that happen. This is why some companies will supply outplacement, the outplacement counselor’s job is to move the employee through the transition as quickly as possible. I thought Gar forman did a great job of not dwelling on what was wrong with Vinny and instead looking at what the Bulls need to do going forward. He did a great job of that and so should you.

Terminating an employee is a bad day for everyone; and no one wants to be an “expert” at it. But if you are going to lead a team, enforce standards and build an environment that fosters success for everyone you need to be ready to have conversations that eliminate the poor performers. If you do it well it’s not less painful, but the pain doesn’t last as long for you, or your employees.

I’ve delivered three different talks to three different groups on three different topics in the last two weeks. As I was preparing I came across several blog posts on how Donald Miller, or Tim Ferriss prepare for a speech.  It was fascinating (and helpful) to see other people’s methods, so I thought I’d write up what I do too.

First, a word about my audience. I’m typically speaking to an audience of 20 – 50 business leaders.  Small enough that I can hold a highly interactive discussion, which most business leaders enjoy.  If I was talking to 5000 people or even 500 people I would change a few things, but here’s what I do for this audience.

I speak from an outline, never from a word-for-word narrative. My talks can take many side roads depending on where the audience interaction is taking me, so it’s important that I don’t depend on a memorized script. I typically have an idea of what I want to say before I start writing and I try to work those main points down into three to four major points.  In working toward those key points I try to think about what questions the audience might be asking. So for example in my compensation talk I advocate setting your salary target in the mid-point of the market range for your position. Inevitably the question in the audience’s head is, “How do I get great talent if I’m paying at the mid-point?” so my next point will need to address that issue.

I’m typically delivering a business know-how kind of talk, where I am delivering some practical and useful information. As a result it’s important that I am taking a stand, that I have a point of view. It makes the talk more interesting if my point of view is different or at odds with the commonly held view in the room.  In the talk on “Managing People You Can’t See” we pointed out that most people work from home because they feel that they get more done, but when our team members work from home we assume they aren’t being productive. On the flip side when people are at work in the office we assume they are working, but the average office worker wastes 1.7 hours per day! This shook up the assumptions of the crowd. These kind of arresting discussions help the audience to realize they might not actually know it all, and creates more engagement in the discussion.

So as I work my way through the material I want to present, I try to arrange it so that I start with an idea or exercise that opens up a pretty wide gap for my audience, then each point I deliver should help to close some of that gap, but also create new questions that I can continue to answer in the next point.  This process keeps the audience focused, and if done right they will provide the transitions for me to move from one point to the next by asking the question that I am prepared to answer.

Once I have the outline I will talk it through out loud just as I would before the audience to try to get an idea of how long each section is taking me.  I don’t write things out on my flip chart while I rehearse (more on that later) but I also know that I will tend to talk faster during the real thing so it kind of balances out.  As I talk through it I find places where the idea looked good on the page, but doesn’t sound good out loud, or places where I need to add an illustration or handout.  I’ll make those edits to my outline and then talk it through again.  I repeat this until I’m comfortable with the words and the length of the material.

Lastly, I never use any kind of presentation software. That’s right, no PowerPoint. I usually just use a flip chart to record questions and ideas that the audience might give me or to draw a chart to illustrate my point. In part this is about the size of my audience, if I was speaking to an auditorium the flip chart is less practical.  But the flip chart leaves me free to really customize my presentation to the audience for I’m speaking to, it creates a more intimate experience with the audience and showcases my expertise (which is the whole reason I’m there).  It means that if I’m running out of time and I skip a point or two, no one knows but me. If I need to show a complex visual I can draw it on the chart during a break before I start, but by and large I’m just using the flip chart to record the audiences thoughts and questions, and to outline the key points of my talk.

This is my process, I would be interested to hear yours…

Image courtesy of Goldmund100 via Flickr

Once you’ve been doing something for a while you start to figure out what works and doesn’t work.  You know when the “conventional wisdom” is right and when it’s bunk. Having tried all the “short cuts” you can tell people when they really save time and when they don’t. Experts have found not just good ways to do things but also good ways to explain them to other people.  Experts, if you get them talking about their areas of expertise, are interesting.

Moreover, the best experts have opinions that are different, that stand out. No one asks you to come to a conference to espouse the same ideas you can find in a Marketing 101 textbook. You get invited to speak, and people read what you write, when it’s something contrarian, unexpected, or contains particular insights. It comes back to being an expert. Experts know something that not everyone knows; and they have the courage (almost a need) to share that knowledge with others.

This is why writing and speaking (and increasingly video) are key parts of every professional’s business development toolkit. People want experts, people who know that they know. The best way to demonstrate that is to show up somewhere (either in person or virtually) and demonstrate your expertise. Talk about what you know (in person or on video), write about what you know (articles, books, blogs, etc.) show others that you know what you know.

Doing this over and over not only sharpens your skills; makes you more sure of what you know.  But it also helps you to fine tune your ability to communicate it.  You find better illustrations, you develop new ways to answer questions or overcome challenges. You become a better expert.

So many professionals see speaking and writing as a big chore. “If I’m such an expert why do I have to demonstrate it all the time. If I’m good, work will come to me.” But speaking and writing is more than business development, it’s also personal development. Honing your message and sharpening your presentation doesn’t just attract clients, it makes you better as an advisor.

Washington Post graph of Federal Deficit as a percentage of GDP

We are surrounded by budget crises these days. There’s the City of Chicago, the Chicago Transit Authority, the State of Illinois, and of course, the Federal Government. Hearing about these financial crises can be discouraging to business owners. Is this the new “normal,” where it’s ok for expenditures exceed revenues?

If it were “normal” for businesses to consistently spend more than they made, they wouldn’t be in business for very long. With that in mind, is there any advice you can offer our elected officials on how they can balance their budgets? Let us know what tactics you would take if you were in charge of balancing a governmental budget.

I know that I’m reading a really great book when I keep nodding at each page, “yes, yes, exactly…”  The authors are telling me something that I knew intuitively, yet somehow they have given voice to that hunch and even explained it with elegance.  That’s exactly the experience I had while reading “Switch” by Chip and Dan Heath.

Switch is a follow up to Chip and Dan’s excellent first book “Made to Stick” about how to communicate in a way that people will remember what you said.  In Switch they look beyond communication to actually getting people to make change.  As a business growth advisor my business is entirely dependent on getting people to do things they may not want to do, I do this every day.  But the Heath brothers not only taught me some new things about making change, they also gave me a simple framework that helps me think more clearly about why change might be difficult for a client, for a friend or even for my kids.  The book is broken down into three sections, each describing one necessary ingredient for successful change.  First there is The Rider, the rational part of the brain that steers the course.  The Rider needs good reasons, and needs to understand why.  But The Rider’s influence is limited because he sits on top of The Elephant, our emotional dinosaur brain that so often interferes in The Riders lofty plans. The Elephant responds to feelings, to emotions and needs to be on board to make any real change.  Then there is The Path, the situation or system surrounding the person trying to change even a well coordinated Rider and Elephant can’t find their way if The Path is obscured or full of obstacles.  Sometimes a change in the system is all that’s needed to get change to stick.

This framework is immensely helpful when trying to identify why people aren’t making the change you expect, is there a lack of skill, a lack of will, or an environment that hampers their success?  The book even provides little practice cases where they give you an example and you can diagnose what you would do.

My first read through the book is reminding me of my first pass through some of my favorite books of all time.  I keep finding nuggets that I carry around through my day, that are immediately practical and usable.  I also know that there is stuff in here that I will need to ponder and practice for many years.

If this sounds intriguing to you, and you want to learn more, Chip and Dan will be all around the country to discuss the ideas and sell some books.  They will be in Chicago March 11, you can get more information and register at the Switch Book Tour page.  I look forward to seeing you there!

Switch is available starting February 16th, I received a free advance reading copy from Chip and Dan’s Web site.

Just Added:  I found another great review at the San Jose Mercury News: “You Wanna Change Things?”

Leaders are readers, or so the saying goes.  I frequently get asked what books I would recommend to improve the skills of founders of creative service firms. These are my typical recommendations.

E-Myth is the classic work on running a small business.  Michael Gerber has some crucial insights about how to structure and organize your small businesses to so that you can run your business instead of having it run you.  If you feel like the whole business depends on you, and you can’t get your employees to take responsibility this book has the answers.

Jim Collins is my #1 most favorite business author.  Built to Last & Good to Great are must read books for every leader in business.  I think that Built to Last is the best of his books, it’s clear and actionable, and holds terrific insights into how you can create an enduring great company. There’s also a great monograph, Good to Great for Non-Profits, highly recommended after you’ve read the books themselves.

David Maister is the unchallenged guru of professional service firm management.  As with Jim Collins it’s hard to pick favorites, but I find clients are most often impacted by the business development lessons in The Trusted Advisor.  True Professionalism can be a terrific book to take younger professionals through to help them to orient themselves to what the job of a “professional” is.  Managing the Professional Services Firm is a more advanced work, more applicable for larger firms, but with lots of meaty lessons. These books are must reads for my team members.

Vern Harnish’s The Rockefeller Habits, has a great structure for how to run a business well. He has the best system for reporting and a meeting rhythm to keep all the parts of your business connected and well fed with information.  It’s short, but packed with practical information.

Lastly, Crucial Conversations by Patterson et al is a terrific book about how to have conversations when the stakes are high. So many of our conversations with employees, partners, prospects and clients get emotionally charged.  Each person is bringing in their own story about what’s happening and what should happen.  This book can help you to keep a clear head and communicate effectively even when others can’t.

Lastly, there are a number of Harvard Business Review articles that have been as useful and powerful to me as any book, Who’s Got the Monkey for managing tasks with your subordinates, Manage Your Energy, Not Your Time is important work for keeping you fueled, and energized for the long haul.

This is quite a reading list, and of course it’s not exhaustive, just my favorites.  What books, articles or Web sites keep you up to date and growing?