Mary E. Marshall's Blog, page 37

Praise or Punish?

Today’s Wall Street Journal has a piece about several companies, including Yahoo, moving away from the “negative feedback” given during performance reviews. Rather, they are focusing on what employees do well and how they can do more of whatever their successful skills and traits are. I am very happy to see that large companies are finally realizing that negative performance reviews do nothing to improve the company’s bottom line, let alone the development of their employees.

Most supervisors have been taught that when giving negative feedback, you should sandwich it between two good pieces of feedback and the person will likely be more receptive. The reality is, the only thing a person hears is what they have done wrong or their perceived faults. Next, the person focuses on this and the result is they are discouraged and often leave the organization. Turnover in an organization is very costly. Several sources say that a mis-hire can cost an organization from 3-5 times the annual salary of that employee. This cost is even higher when it’s a good employee who is discouraged by negative feedback.

This doesn’t mean leaders shouldn’t enforce the company’s behavioral standards, goals, work ethics, metrics, and values. It means people need to be hired and evaluated based on their strengths, not their weaknesses. Gallup’s Strengthsfinder has been leading this charge for over 20 years with enormous amounts of research and millions of people who have taken the profile. They have identified 34 basic strengths that can be built into talents with practice.

I don’t believe in turning the workplace into a first-grade T-Ball game where everyone gets a trophy, but I strongly believe in putting people in positions that leverage their strengths. When you have a person who is not performing, and proper instruction, training, or coaching has been provided, (and you have ruled out a personal issue as the root cause), it’s likely a bad fit for that person’s strengths. Our job as leaders is to recognize this and move them to a position where they have a likelihood of success.

When people are praised for what they do well, they want to do more. They will report a more “fair” workplace and take more pride in their job. Think about all the times you’ve exceeded or succeeded in your current role. Did you have someone coaching, praising or giving you encouraging feedback? My guess is you did.

So next time you get ready to give feedback or performance reviews, really think twice about negative feedback. Is the person really suited for their role and tasks? Is there another way of getting the job done? What do you really admire or appreciate about the work this employee does? A carrot is almost always more effective than a stick.

At CEO Global Network, our Senior Executive program is designed to help the second in command folks become better at what they do best and help them become better leaders. Coaching and feedback from peers is viewed as a reward for high potential talent. See what you can do in your organization to enhance your team’s skills through praise, recognition and coaching instead of criticism and negativity.

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Great Leadership is Gender Neutral

There is a lot written today about which gender makes a better leader and depending upon the perspective, there are varying opinions. Recently, there was also an article in Fast Company about how women leaders were reviewed more harshly for “personality” or “emotional” characteristics, while men were praised for the same traits. If a woman leader gets emotional and yells at subordinates, she is immediately labeled negatively. A male leader can do the same thing and likely as not he will be called forceful or within his rights as the boss.

So there is still a double standard, which should not come as a huge surprise simply because there are still significantly more male leaders than there are female. However, at the end of the day, it’s changing and that’s a good thing. And even more importantly, I don’t think you can label men or women as better leaders. Leadership is individual and made up of many characteristics and gender can help or hurt, depending upon the individual.

Great Leadership

What makes a great leader? Just like a great recipe, there are a lot of ingredients and it never quite comes out exactly the same each time. Leaders are unique. I start by looking at their values, what do they stand for? How true are they to that? How do they treat others? What standards do they have? These are things we “like” and make us feel as though we are part of a team. The rest is about performance. Can they inspire others to a mission, cause or project? Individually focused leaders are all about themselves, their performance, how they look, and how they did. True leaders care about the performance of the team.

Great leaders know themselves first. It’s difficult to help others achieve or become great if we are blind to our own characteristics and idiosyncrasies. This is where sometimes women have the edge because we can be more introspective and self-aware. However, great male leaders have mastered this as well, it just generally comes easier for women. On the other hand, great leaders tend to take more risks, quickly evaluating the pros and cons and making decisions. This is where men have the edge, wired from our cave man days to hunt and protect, they have less fear and feel more comfortable in this arena.

Bottom line, great leadership is gender neutral. Each gender has an edge on certain characteristics, but overall, it’s about the individual and their ability to inspire others around a mission, vision or endeavor towards achievement of a goal. There are currently more men leaders than women, 80/20 in congress and about the same in boardrooms and C-suites across the nation, so our models are mostly men. As leadership representation becomes more in line with the overall population, we’ll see changes. However, at the end of the day, great leadership shows up in all shapes and forms and has very little to do with gender.

photo credit: inertia_tw via photopin cc

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Chinese Business Leaders Have More EQ Than Americans?

What? Can this possibly be true? According to a recent article in Inc. Magazine, it is. An extensive research study done by TalentSmart measured leaders’ Emotional Intelligence (EQ), and correlated that to company performance. Chinese leaders scored almost 15 points on average higher than their American counterparts on two critical factors, self-management and relationship management. These two measures are highly predictive to how well one can lead and create results.

As the author mentions, it shouldn’t be a surprise as Chinese culture has deep roots in managing oneself and cultivating relationships, unlike a lot of American leaders who only pay lip service to both of these behaviors. The fascinating piece about this information is that Chinese leaders are becoming what we used to say we were! And doing it quite successfully.

The important issue here is that it’s not about the fact that they are currently better or “higher” EQ than our leaders, it’s about what we can learn from this insight. At CEO Global Network we take Emotional Intelligence very seriously and all of our Group Leaders are screened with a specific EQ tool and all members are invited to participate and use the tool as well. John Wilson, our CEO and Founder, lists it as one of the Seven Imperatives that makes a great Leader. The reason we do this is because it’s a critical piece of successful leadership, (as the Chinese have demonstrated).

Leaders who can self-manage, and are consistent in their leadership style, are rated as “more successful,” report higher satisfaction and are more in tune to who they are and consequently, interested in “self-assessing” and improving. Always evaluating and determining how they could have done it differently or better or if in fact it was just right. Relationship management is key to being a successful leader because if you can’t get work done through others, you can’t lead. Employees are more likely to report satisfaction in their job situation when they have a good relationship with their boss. They will also be more productive as a result, which is good for everyone, including the bottom line of the company.

So why do we shy away from this “squishy” side of leadership? We tend to downplay it as not as important as a CV, who you know, or where you went to school. It’s in fact more important as a predictor of high performance teams than anything else. Does the leader have the capacity to lead? Can they learn? These are things you want to know before hiring a leader or going to work for one. EQ is anything but “squishy,” it’s hard hitting information about oneself that you can actually work with and use for development. It’s a window into what makes a person tick. Understanding it is a crucial key to having productive and happy work environments with good leaders.

photo credit: petriv via photopin cc

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The Entrepreneurial Slump

A recent Wall Street Journal article referenced the fact that among those age 35 and younger, the rate of entrepreneurs starting new businesses has declined precipitously. Less than 20% are actually starting new businesses and the rate has been declining for the last 20 years. That’s a very scary prospect for a country built on innovation and entrepreneurialism.

Why is this happening? There was not a clear answer in the article other than to say that the generation aged 25-40 didn’t seem to have the same motivation as previous generations to get out and take a risk. However, as we learned from Mary O’Hara Devereaux of Global Foresight at our December Speaker Series Event for CEO Global Network, help may be right around the corner with the next generation, “Generation Z.” They came of age after 9/11 and lived through the great recession. They know that a “job” does not provide any security whatsoever and that destiny is in their hands. They are more willing to innovate, more willing to take a chance on something as long as it’s meaningful for them, AND also contributes to the greater good. They are the next batch of entrepreneurs and they will stop the slide of those who came before them.

How can we help this new generation?

Encourage them to start something
Challenge them to think differently
Help them with loans
Teach them basic business principles that will lead them to start businesses
Help them learn to lead – mentor, coach and expose them to good leadership characteristics and practices

What I have learned through Peer Advisory over the years is that the best pieces of advice come from mentors and peers. A problem can always be solved through collective problem solving, (not blame), and innovation, (although the solution may look different than you first thought). The most common response I get when someone is being introduced to the peer advisory company I work with, CEO Global Network, is “I belong to a great industry group that provides a lot of help.” That’s terrific and shows that a leader is willing to get outside advice. However, in these types of associations you get a very industry specific perspective and not necessarily out of the box thinking and solutions.

Non-competitive peer advisory allows for sharing amongst disparate industries and that’s where the beauty lies. Ideas that will never come up in your industry group are brought to the table. Exposing our next generation of leaders and entrepreneurs to those doing it today is what will inspire and engage them for the future. Bring them into your business or pay their dues for participation in a group that will teach them leadership and business basics and watch where they go.

And, oh by the way, all of you working on goal setting for 2015? Your peers are the MOST accountable group of folks you might want to share those goals with – so why not consider checking it out? You’ll be glad you did.

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Resolutions or Revolution?

For most of us, this is a time for reflection, both personally and professionally. What did we hope to accomplish this year vs. what we actually accomplished? Sometimes there is cause for celebration, but more often than not, it’s a time to rethink, revise, and somehow find the resolve to achieve what we want.

So we become resolute about what we want to accomplish, just as we were last year, and guess what? Some of the items fall off the list again. So rather than resolve to try once more to accomplish the personal or professional goal that didn’t make the hit list this year, why not attack it differently?

Maybe instead of making resolutions, it’s time for a revolution – an all-out refusal to get to the end of 2015 without having crossed these goals off the list. What this means is that you will have to do something different. Because we all know what doing the same thing over and over and expecting different results is…

Here’s my recipe for starting your own revolution:

Step 1 – Declare. Really and truly commit to each and every goal you are including in your revolution.

Step 2 – Be SMART.  Make sure each of the goals in Specific, Measurable, Achievable, Results focused and Time Bound.

Step 3 – Accountability. Decide who or how you will be held accountable. A partner? A colleague? A group? It must be a higher level of accountability than you employed this year in order to expect a different result.

Step 4 – Review/Revise: Determine how often you will review and revise based on progress or lack thereof. Monthly? Quarterly? Biannually? (This does not mean look at your goals in December and say “oops.”)

Step 5 - Celebrate: We often lament our failures, and skip spending time celebrating our wins, which leads our focus to go where? To our failures. Focus on what you want, not what you don’t want. It’s much more powerful. Remembering an accomplishment, the celebration, and the endorphins that were released will keep you focused on more of the success and less of the failure.

Step 6 - Pay it Forward: Share, offer to coach, lend a hand to someone else trying to have a revolutionary year. We can’t do this alone. What goes around does really come around so go first and offer a helping hand.

These steps can apply to your company’s strategic plan or your personal goals for the year. We often forget how much power we have to achieve great things, if we only put our minds to it. Look at any of the truly great leaders from history, they all accomplished amazing things against the odds. And it was not for lack of a plan, it was because of one. They all declared a revolution – and then made it happen.

Make 2015 a Revolution Year for you and your company!

Happy New Year to one and all!

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Leadership Puzzler: The Good, the Bad and the Ugly of Succession

In the 25+ years or so that I’ve been working with small to mid-sized businesses, I’ve seen just about every type of “end.” Some good, some not so good.

Let’s start with “the ugly.” One entrepreneur grew his business to about $15M and wanted to leave it to his employees. He worked with his executive team for three years on an ESOP strategy and finally pulled the plug. He retained the majority of shares in the first year with the full earn out over a five year period. However, after year one a very strategic buyer showed up and made an offer that was a win for everyone. Due to the way the ESOP was structured, the employees were able to turn the deal down, even though they did not have the majority of shares. Needless to say, this caused some serious animosity between the parties and the undoing of the ESOP. Trust was broken and no one ended up happy with a broken company and no buyers in sight. The lesson here? Make sure everyone’s expectations are matched and the documents reflect those expectations.

Next comes “the bad.” This was a software company that had multiple suitors, all very strategic buyers. However, the founder/owner couldn’t figure out what his role should be after the sale. Because he wasn’t sure, he kept dragging his feel and eventually both buyers lost patience and went away. The founder couldn’t understand he alone was the reason the deal didn’t come together. He assumed that there would be many more buyers after those, and there were not. The original buyers picked off his engineers and developed a competing technology. The opportunity completely missed, never to make an appearance again. Lesson? Know what you will do after you sell – you’ll look at potential deals differently.

Lastly, let’s talk about “the good.” This is the way we all want it to go. The founder had a clear plan. Grow the business to $25M, position it to be acquired by one of three strategic partners, stay on for a year, then call it a day and retire to race his sailboats, and travel with his wife. At the ten year mark he had the revenue track he wanted and had made inroads with all three potential buyers. He decided to pull the trigger and engaged a good investment banker to prepare the business and then work with the buyers. He ended up getting twice the multiple he had anticipated and the contract post sale he wanted. He was clear what he was negotiable on and what he wasn’t. He was able to negotiate good contracts for his key players and ensure that the rest of his employees were well taken care of. His “baby” was in good hands and today is still going strong. The lesson? Starting with the end in mind works.

photo credit: iFireDesign via photopin cc

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Are You Ready to Call it a Day?

Entrepreneurs are famous for always thinking about “what’s next,” however what’s next can often come at the expense of what is. You’ve heard of “bright shiny object” syndrome? It’s the entrepreneurial version of Attention Deficit Disorder.

Chapter 10 of my book, Putting together the Entrepreneurial Puzzle, discusses how you can prepare yourself so you don’t miss the end game. (Get your *free* download of Chapter 10 here. It’s the last chapter so we have come to the end.)

Step 1: Think about what you’re trying to accomplish.

Are you growing your business to go public? Leaving a legacy for your family? Do you want to sell? Sell to your employees? Whatever it might be, decide what it is because it will inform your strategy and opportunities going forward. When you are clear on the objective, you’ll recognize the opportunity when it arrives.

Step 2: Think about how much is enough.

Really, how much money do you want or need to retire or do something else? Figure it out as it will help guide your decisions along the way.

Step 3: Think about the timeline.

How long do you want to work in this business? It may inform how fast you grow, how much you invest, or acquisitions you may make along the way.

Step 4: Ask yourself what you will be doing when you don’t have the business.

This is probably the most important step of all. I have seen so many businesses not sell when they should have because the owner had nothing else to go to. Entrepreneurs don’t retire, they always go on to something else, (even if it’s yacht racing). They’re just wired that way. However, they won’t move until they have a clear picture of what’s next.

Now, depending on how clear you are on all the answers to the steps above, how are you doing on the journey? It’s December and for most companies, it’s time to evaluate how well you did on the annual plan, how much progress you’re making towards your strategic plan and ultimately, that exit strategy.

When thinking about your goals for the coming year, incorporate some goals for your succession strategy. If you don’t, remember that the end might come as a bit of a surprise and not necessarily a good one.

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A Glimpse of the Economic Future from Mary O’Hara-Devereaux

John Wilson, Mary O’Hara Devereaux, and Mary Marshall

This week we launched the CEO Global Network Speaker Series in the US. Seattle hosted futurist Mary O’Hara-Devereaux to provide Puget Sound area CEOs and Executives a taste of what’s coming and wow did she deliver! I wanted to share some of the key takeaways with you:

For the Seattle Metro area:

Currently, broad-based employment growth is faster than the overall US – approx. 3%
Exports are critical to sustaining this growth
Income gaps are growing
The housing recovery is slow
There is a persistent missing “middle” within the economy
The future forecast is mirroring the overall US forecast

Long-term drivers for the future:

Mary described what she called, “the great collision,” which is the increasing longevity of people, and technological disruption meeting the rise of emerging markets.
She says the only way to increase GDP is through technology, throwing people at it won’t work anymore.
Demographics are “king” so understanding them, particularly those of your current customers and target markets is critical.
Due to increasing length of life people can expect to experience a second middle age between ages 60-80.
The question for this second middle age is not how long will I live, but rather, who will I become?
The real issue for aging is not medical, (people will be healthier), it’s financial – can people support themselves until age 105?
The “Rise of Generation Z” is important. They are the post 9/11 generation, 1 in 4 grew up in poverty, most are in families affected by recession.  They are rebels with a cause and most similar to the greatest generation. Leaders must learn about them and how to relate to them as employees.

We are excited to have launched our Speaker Series with Mary O’Hara-Devereaux. She was a great example of the type of speakers we will bring to provide our members with cutting edge information to grow their businesses faster than their peers and with more success.

CEO Global Network is accepting applications for membership and group leaders. To find out more click here

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The 3 F’s of Entrepreneurship

The three F’s I’m talking about are “Fail Fast and have Fun” while doing it. I’ve discussed this before but I think it deserves more air time because it’s so critical to business success, and life success for that matter.

A recent article from Stanford Business discussed how entrepreneurs fail, and fail often, and the more failures they had, the more successes they had as well. There is a direct correlation between the two. The author called it “practice,” but let’s be clear, it’s failure. Why is failure such a bad word? Have we been so conditioned that we always need to be right, to win, to know the answer, that we are not willing to get it wrong once in a while?

The fact of the matter is that without failure, success rarely follows. Take a successful CEO for example who has had nothing but a string of successes and then has a big public failure. What usually happens to him or her? Most likely you will not hear about them because they will fade into the background humiliated by the failure. Entrepreneurs on the other hand, are used to failure. In order to get anything done they know they will not have all the resources they need, (people, money, processes), so they rely on their resilience to carry them through the next set of rapids. With each failure comes knowledge that it’s not fatal, only a setback AND some learning.

Being afraid to fail will keep you from success. Sometimes we succeed and are worried that it was an accident, and in some cases it was. But more often it’s because of a series of failures and learnings that we have reached success. Being able to weather those storms is where the real success comes from. Look at all the businesses that made it through the recession and are thriving today. Do you think they did it without some skinned knees and hard learned lessons? No. They knew that one failure was not fatal, nor was one success a pattern or entitlement. It’s all part of the entrepreneurial journey that makes it fun. Yes, it’s a roller coaster and it may not be for everyone, but it is one hell of a rush!

I’m reminded of all of this because I am in start-up mode building the Western Division for CEO Global Network and so much of it is coming along so beautifully that I am scratching my head wondering how it could possibly be so easy? And then I remember all the things I learned and failed at over the last 15 years in the same industry. Now is my opportunity to leverage some of those failures. The faster I fail at what was not meant to be, the sooner I’ll find the success, and resilience is something that I’ve had to really develop over the years. So maybe you can call the past “practice,” and in the end it probably doesn’t matter whether it’s that or failure, the point is, learn from it, expect it, and move on to success. It’s right in front of you and that’s fun!

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Leadership Puzzler: Execution at Its Best

An entrepreneur from last year’s Emerging Leaders class that I teach at the Small Business Administration experienced what most businesses would call “phenomenal growth.” He started by creating what he thought was a workable strategy to achieve the vision he had. The vision was good, but it was the same one he had for many years without much forward momentum towards achieving it. The company had experienced 5-8% growth, but they were barely meeting expenses and the owners were underpaying themselves. They had good people and good products and customers loved them, and still they struggled.

About halfway through the class, the entrepreneur scrapped the entire plan and realized that several major issues or “big rocks,” kept getting in the way. The first item was a clear understanding of roles and what a future org chart would look like, including triggers for hiring. The second was the lack of good dashboards or metrics to measure anything. The last was a lack of a marketing strategy, which led them to take any business that came there way, without clear intention about the kind of business they wanted.

He went back to work and created an entirely new strategic plan, with strategic objectives and goals that made sense. He got the entire leadership team involved and everyone was ready to make it happen. Then he realized that a couple of players on the team needed to go. It became clear to him that if he wanted to do things differently, he needed to stop tolerating underperforming players. Once they were out of the way, the rest of the team started performing above expectations. It’s amazing what happens when you get people in the right seats, or get them off the bus entirely. It’s a game changer.

What I’m happy to report is that the three year strategic plan he created for 2014-17 will be complete as of December of 2014. (Let me be clear that I rarely see a plan work so well.) He is now in the process of creating a new plan as they need a new goal!

What made the difference for this company? Leadership and execution. Leadership to acknowledge what wasn’t working, make the changes necessary to get things on track, and provide the clear vision for the future. Once that was in place, execution of the three strategic priorities with appropriate smart goals was relatively easy. Execution is about continuous monitoring and improvement to make sure things are going according to plan and the willingness to change course when necessary. When we don’t check-in on things and see if we’re really meeting our expectations or goals, it’s about the equivalent of buying a lottery ticket. Keep checking, and most importantly, have the right metrics.

The willingness of this CEO to scrap his entire plan halfway through the class and create one that focused on the right “Big Rocks” made the difference between another mediocre year and a phenomenal year. It made a three year plan executable in one year. It’s the time of year for you to be looking at your plan. How did you do? If the answer is “I don’t know” or “not so well,” do a major change and start over. What have you got to lose?

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