Risk lies not in the journey, but the reluctance to take it

When my father passed away in March of 1985, a family friend made a comment to my mother, which I will never forget.  While trying to console her, this very good and honorable friend told her how fortunate she was to be employed.  He went on to reassure her that a secure job was every bit as important as having a life insurance policy.  You see, at that time, the U.S. was beginning to show recovery from a double dip recession (consumer and business) where unemployment had climbed above 10%.

As you may recall, the U.S. went on to realize one of the strongest economies and global recoveries ever – yes, just a few years following a shattering financial crisis which crippled this country.  The world of work changed dramatically not coincidentally during that period.  The knowledge worker was born.  It became less about what a person could do and more about what they knew, felt, and thought.  Selecting the right people became a differentiating imperative, one, which could build value overnight.

The, fear based approach to employment of the early ’70s and ’80s was gone.  People now had choices.  They left the organizations, not always physically, that had destroyed their trust and security of the job that “was as important as a life insurance policy.”  Once thriving organizations toppled because they couldn’t retain the talent necessary to compete in the new global economy.

Is history repeating itself?  You can bet on it.  So the question now becomes, “how can our organization emerge from this double dip set back in the most healthy and prosperous way?”

Like the advice given my mother, this is not a time to rely on what has worked in the past.  Conventional wisdom suggests we do employee engagement surveys to understand the health of our human potential, address our management development and leadership talents, and set our plan in motion to improve.  While these steps are critical and absolutely necessary, our research suggests that these alone won’t give us the control we need to create the change we want.

As leaders we must ground “all things culture” in the business of our business!   If you aren’t doing this, as a leader your impact is relegated to simply “reviewing” your changing culture – not determining it.

So get committed.

Direct the evolution of your culture from the macro through the local.   Culture will eat strategy, tactics and even the best laid plans for lunch, unless it is continuously connected to mission, vision, and purpose.  What elements of your culture must change and what must prevail?   What aspects of your service culture resonate with your customers and which irritate or alienate them?

This is not a time for seeking consensus, but a time for taking your organization to the next level, the true and proper role for leadership.  The risk lies not in the journey, but in the reluctance to take it.

By Curt Coffman, MBA

Like this article? Register for release updates on our upcoming book Culture Eats Strategy For Lunch.

Latest research suggests you should get him a chair
and invite him to your next survey

In 1941, Percy LeBaron Spencer of the Raytheon Company, was developing radio signals which were the central mechanisms of radar.  One day, while walking past a radar tube, he noticed that the chocolate bar in his pocket had melted.  Surprised, but curious, he experimented with this existing technology by placing a bowl of popcorn kernels in front of this tube; it quickly popped all over the lab.  The microwave (radar) oven was born.  The rest is history, all because of a surprise discovery.  The cooking/heating capacity of the radar was there all along, yet no one was looking for it because they were focused on the radar.

New research by The Coffman Organization has revealed a similar discovery, this time in the area of employee engagement and building true sustainable value in an organization.  Simple – yes, missed- absolutely!  Face it, for the past 15 years, we’ve been shown complex “meta-analytic” research that linked engagement levels of employees to results like turnover, productivity and even profitability!  So, we measured, tried to improve and hoped for the best.  Results though, were mixed when tested – engagement rose, but not always the promised results.  What has been missing?

As Percy LeBaron Spencer discovered, we also have a very powerful tool which has not been fully utilized to build organizational value.

We need to use employee engagement to build the value of an organization by:

1. Acquiring new customers, and
2. Retaining current customers.

While there are many opinions about how to build value, it is unquestionably these two variables that really matter.  For decades now, organizations have found themselves in an era of efficiency with highly effective initiatives such as LEAN¹, and Six Sigma²; this did indeed help maintain their margins by focusing on cost reduction.

As efficiency increased, however, an undeniable crisis mounted and was often ignored – flat and frequently declining sales!  Without growth, even the most effective process will not contribute to the bottom line over time.

What will?  This is where the new focus of employee engagement finds its previously overlooked application:  engaging every employee by establishing a line of sight to how they contribute to two things – acquiring new customers and retaining current ones.

Many may say, “in my job, I have no influence over these.”  We think this is at the core of the problem.  We either influence customer acquisition and retention directly, or through those we collaborate with and support.  If one cannot make the connection between what they do and this outcome – it may be a non-job.

While Spencer and Raytheon did not disassemble or change the radar tube, they certainly re-focused it.  Just like the radar tube, employee engagement is critical, but if it is not focused on how it translates to customer acquisition and retention – don’t waste your money.

Trends in engagement will not be forsaken, but traditional “action planning” needs a complete overhaul.  The goal of action planning or survey follow-up is not to improve a particular item or any of the individual survey responses.  Rather, it is to create clarity around how each one either enables or inhibits the employee’s ability to acquire and retain customers.

Through this discovery we have developed a proven approach, our Leading to Engage™ process and survey practices, to achieve this most critical outcome.  Like Spencer and Raytheon, our approach has forever changed the status quo into an entirely new means of getting exponentially better results.

Please call us at 888-999-8940, or email us at Info@CoffmanOrganization.com to see how this
powerful approach can help your organization grow today.

Too Busy to Build Value?

If so, you’ll have plenty of time soon…

How have you been? Is a “throw away” line.
It prompts a superficial response so we can continue on uninterrupted by reality.

Well, at least it used to be.  Now, it might well unleash an emotional litany:

…swamped, buried with projects…barely keeping my head above water, up to my ears in alligators…

Probe a bit and you’ll hear the underlying message:  busy, busy, busy, but lacking in results.

What are we busy doing?  Reorganizing, planning, recording, assessing and messaging.  These things are important, preventing weaknesses from creating crises is a good thing, but most of the time our activities entirely miss the number one charge of any organization – building value.  You see, value is not derived by piecing together activities like fabric to a quilt; value is a derivative of aligning the strategies, vision and direction to do ONE THING – acquire and retain customers.

This means more than buying customers through acquisitions and mergers, but really identifying customer needs, developing a marketing plan, selling and most importantly, building new relationships (organic growth).  In the past five years, research by The Coffman Organization suggests that employees, managers and leaders are increasingly becoming detached from the customer.  Why?  The uncomplicated answer is because customers are challenging and sometimes mess up our well thought out plans and strategies.

It is so much easier to restructure, change reporting channels and create communication plans than to figure out how best to acquire new customers and to sustain these relationships.  While not bad prima facia, these actions may change behavior but they usually have little to no impact on customer acquisition and sustainability.  This should be the litmus test for EVERY initiative, project and hour worked for every single person in the organization.

Let’s be honest, quality standards are far more beneficial to us than to our customers.  We use scalability and standards to protect the organization or our own position in the pecking order by ensuring a cookie-cutter approach (“do it like this”), or delivering a message that you adamantly disagree with.

Contemporary organizations keep it simple and NEVER lose sight of what really determines their success.  Everyone from HR, IT, Accounting, Operations, Marketing and Sales knows how to separate the hay from the horse manure.  There is a widely held expectation that someone knows each and every customer and has a meaningful relationship with them!

When customers voice reasonable needs, great organizations don’t crouch behind the shields of “scope creep” or “out of standard”.  They recognize how a $15 part can ultimately result in a $750,000 purchase of heavy machinery.  For example, an $18 pizza may not seem like much of a value driver, but when one considers that every man, woman and child consumes 23 pounds (43 slices) of pizza per year, the overall contribution (value) is enormous.  Value-building leaders know that creating lifelong customers always trumps the traditional view of satisfying a customer within one transaction.

At The Coffman Organization, we have completed research with hundreds of thousands of employees, managers, leaders and, most importantly, customers.  The results are alarming.  While no one denies the importance of the customer, they have been reduced to a nameless, faceless entity.  Value-driven companies structure themselves around the fact that every touch point results in a stronger or weaker relationship – depending on the human connection.  Our data show that customers are not loyal by nature – they actually prefer to switch.  Despite this disappointing fact, they do crave meaningful relationships with the people they do business with and trust.

Sales, or more succinctly, a sales driven model will yield unprecedented success when organizations do the following:

• Strive to engage employees around their role in creating great customer outcomes – no matter what role they are in.
• Study your best sales people, NOT “how” they do it, but what THEY NEED to sustain their high performance.  Remember that big performance comes with big other stuff too – be ready to manage it.
• Provide meaningful measurements to both sales representatives and their customers – by region, district and territory.
• Use a customer engagement structure as the foundation for excellence.  See employee engagement when alongside customer engagement as a leading indicator of the organization’s success.
• Develop your managers around the right things – knowing their employees and developing the kind of meaningful relationships that will accelerate performance and quickly smooth out the inevitable bumps in the road.
• Don’t assume your managers know how to manage people!  More often than not, they know how to manage things, which doesn’t promote customer acquisition and retention.

Busy?  We want to help you know if what you’re doing is truly building value.  Let us show you how our model can help create a culture that does just that.

New ideas are energizing and revitalizing – right?

Hmmm…not always. Actually, unique, original perspectives elicit, on the whole, more negative than positive reactions. How? Why? Seriously, doesn’t everyone love innovation?

Innovation looks much less like a sparkling diamond and more like a lump of coal in the beginning, just waiting to be shaped and transformed into something of value. Tragically, too few can visualize the potential in a lump of coal. Furthermore, our organizational cultures often unintentionally thwart innovation.  So rather than innovation, we settle for a new container, logo or even price. We trademark to protect our “intellectual property,” which even further prevents innovation.

When will we recognize that the most effective defense of our competitive advantage won’t happen in a courtroom? Sustainability will only happen in a culture that props up the lumps of coal and encourages uniqueness in its most raw form.

Makes sense – right? How do we get there? Before innovations can become a vital component of our cultures, we have to embrace some new views:

It takes serious courage to bet on something unseen.

You don’t get to excellence by eliminating risk.

Innovation requires giving up control.

Let’s look at these new cultural challenges more closely.

1. Innovation requires giving up control:

Do we hire people to perform tasks vs. not to think about new ways of doing things? Frankly, it scares us to think that employees could be out there coming up with their own ideas about how things could be done. “Do, don’t think” is often the unspoken mantra.

2. It takes serious courage to bet on something unseen:

Ideas are easy – innovation (what people will actually pay for) is hard. Ideas are shaped and even completely transformed when put through the blender of both Socratic and unfiltered Input from others. It’s naïve to think the best ideas come only from those already sophisticated in the respective area of focus. Fresh, valuable products and services also come from those without bias – those often excluded individuals, who aren’t already subject-matter experts.

3. You don’t get to excellence by eliminating risk.

Obviously, preventing errors and costly mistakes is necessary. If not balanced with promoting excellence, however, our efforts are wasted. The two are complementary, but definitely not the same thing. Our brains function in one of two states at any given time:  fear or vision. Fear always seems more motivational, at least short-term, but without vision and its accompanying risk, cultures grow stale.

Imagine if the BlackBerry, iPod, post-it-note, electric screwdriver, sandpaper and computer mouse had remained someone’s lump of coal.

Do you really want innovation? If so, it’s time for a new pair of glasses.

I never cease to be amazed at how strong people can be in times of trouble and crisis – if they know the honest realities of the situation.  Keep those same people in the dark, or give them “fuzzy facts,” confusing true purpose or direction, and hope diminishes and fear envelops their very being. It’s shocking to look back and see how many very successful organizations, once revered, are now fighting for their life.  Admired for their value and success, both have now evaporated. Through 30 years and the study of literally hundreds of organizations, we know why – and it is shockingly straightforward:  organizations thrive by intentionally managing culture at every turn.

Very talented employees want to join and stay with a great culture; that creates brand equity.  Even more importantly, customers will drive ten more minutes to experience strong culture versus a closer or even cheaper alternative.  The research has provided very rich, yet simple insights into each one of these desired results:

1. Employees must have an emotional connection to the culture.  People act differently when they share a sense of pride in the organizations for which they work.  They view the purpose of their work differently, they form fruitful relationships with co-workers and they are more productive.    Think about it, people don’t want to merely perform tasks; they long to see that they are part of a larger purpose and strategy aimed toward great things.  They want to feel a visceral sense of belonging in the organization and see the value they bring to the mission.
2. Brand equity is rarely an emotional connection to a product, but to a human being that brings the product to life.  This is true from Kashi® bars from Kellogg’s, the comforting milieu of Nordstrom’s or Starbucks to the energy of the Las Vegas strip.    Close your eyes; think about a product or service, and what comes to mind?  That’s brand – strong or weak, but always related to emotions and the people that create them.
3. Customers form loyalty out of emotion not rational evaluation.  We form patterns of buying because of how we are made to feel – not think.  Neuroscience tells us that we are 6 times more driven by our emotional experience than by our analytical assessments.  This brings about one major challenge for the companies of past and future – “how can we manage something as subjective and individual as a person’s emotions?”  The answer is quite simple, actually – through relationships.  Engaged cultures value going to where the customer is, versus trying to bring the customer to where the provider is.  Customers come to you in a vulnerable state.  They are 100% dependent on you to help them meet their needs.  Cultures that connect to that vulnerability (versus minimize or even ignore it) will be and are the true winners of the value and growth game.

Let’s Talk How

But not yet!  Even though the data has been crystal clear in a proven approach and road map, there is a fundamental step that MUST occur before the “how.”  That is the exploration and ability to answer a few questions about your culture past and present.  They are:

• Who are the heroes (past and present) in your organization?
• What do those heroes tell you about the real mission and what is valued?
• How unique, creative and relevant are your organization’s values (over 70% of all companies have the same values)?
• Do your organization’s values stir something inside of you?
• Are people given the time and encouraged to “think/create” or “just do?”
• What about your culture creates positive energy within you?
• What drains your positive energy?

These aren’t difficult, but crucial to explore with yourself and those with whom you work.

The next Coffman Report will lay out the proven approach that sustained organizations follow in keeping highly productive and engaged cultures alive and enriched.

]]> http://coffmanorganization.com/reports/culture-that-rocks-a-bite-size-piece/feed/ 2 http://coffmanorganization.com/resources/nurses-leaving-hospitals/ http://coffmanorganization.com/resources/nurses-leaving-hospitals/#comments Fri, 05 Feb 2010 21:00:56 +0000 Curt Coffman http://v3.coffmanorganization.com/?p=664 New research indicates that the nursing shortage is not so much a healthcare issue as it is a hospital one.  In review of nurse turnover and the reasons behind it, a related but separate discovery has been made.

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As executive bonus announcements are made, the consequences of this deception and betrayal will be felt throughout organizations by employees, customers, and shareholders. One micro (yet compelling) example is the fact that on average an employee works 5.4 hours in an 8 hour day, but during times of change, confusion and perceived inequity, that drops to 45 minutes.

What sets great leaders apart from the thousands whom have been studied is their clear focus on creating a better future and setting such a compelling vision that others cannot help but follow them. American business has prospered largely because of its emphasis on accountability, innovation, and above all, standards of exceptional performance. These ideals are now at risk of being shattered because of leaders rationalizing that their own self-interest should come before those of their real constituencies.

While many directors and compensation committee members cite the potential attrition of great people and talent, if bonuses are not provided. This is neither thoughtful nor based on fact. Research shows that while pay and compensation are important to everyone, intrinsic motivation such as mission, purpose, achievement, and creation of value trumps the dollar. Actually, when order of importance is tabulated, pay is no higher than seventh place in its importance to creating high performance.

In the absence of true performance measures or the lack of courage to hold out for them, we run the risk of rewarding “the weather man for a sunny day.” We do not need wholesale reform, simply a return to the basic principles of performance-based compensation. This means:

• True leaders should look in the mirror and turn back unearned bonuses as a symbol of trustworthiness and commitment to their organizations.
• Directors and governance should boldly establish key success targets first and then determine the bonus structure commensurate to value creation.
• Organizations should eschew “buying growth” and dedicate themselves to “building growth” organically through relentless focus on the customer and the employees who truly engage them.

At the end of the day, however, if you must pay the unearned bonus – do so and quickly show them the door!

An international thought leader in the world of management, Mr. Coffman’s work has been translated in over 40 different languages and cited in more than 110,000 books, articles, and websites regarding leadership, management, employee engagement, and customer loyalty. Mr. Coffman, Senior Partner of The Coffman Organization and co-author of two of the best selling management books of all time, “First Break All The Rules” and “Follow This Path.”