On Books: That Will Never Work

41dVFkVEuUL._SX320_BO1,204,203,200_

“What If There Were No Late Fees?”

“What? You ask? Reed Hastings wasn’t the first CEO of Netflix?” (I didn’t know that either). It was the author, Marc Randolph. And his story of the birth of Netflix is interesting, compelling, and relatable even if you’re not interested in doing a start-up.
Lots of ups-and-downs from concept to execution which any entrepreneur understands; as a Workforce Strategist, of course I wanted to read much more about how Patty McCord impacted the company, but I can’t always get everything I want.
Yet there are lots of great stories and anecdotes.
Take the time Randoph and Hastings tried to sell Netflix to Blockbuster. They borrowed Vanna White’s jet (who knew) and offered Netflix for $50 million.
I wonder if Blockbuster might still be in business if they took the offer.

On Temperament as an Essential Characteristic of Leadership

I’ve always felt people (including me) want to work for people who are consistent in character and temperament.  Never too high or too low.  And, as I get older, working around people with “drama” is less and less enchanting.

Here’s my quick hit on temperament and leadership:

Swenson on Leadership

 

Book Review – She Said: Breaking the Sexual Harassment Story That Helped Ignite a Movement

Image result for She Said Book Cover“She Said,” by Megan Twohey and Jodi Kantor, has deservedly received a lot of media attention.  Read the book (or, at least the first half).  It’s a page turner, with a step-by-step look at the reporters’ investigation of Harvey Weinstein.  It’s devastating.  Weinstein stands accused of being a monster, of course; what he did to women is significantly beyond any harassment investigations I’ve ever seen.  In fact, his actions are less sexual harassment and more sadistic pathological power trip.  Yet he’s not the only villain: Gloria Allred and Lisa Bloom, two ostensibly feminist attorneys, are described as complicit in the coverups.

But what is most significant, and what I learned more importantly, is why women are reluctant to come forward.  Major A-list actresses legitimately feared for their careers; other ‘less important’ figures either left the entertainment business entirely or were relegated to entertainment oblivion.  It won’t be as easy for people to say, “if it really happened, why didn’t they report it right away?” In future harassment situations.

The second half of the book evolves into a look at the Brett Kavanaugh nomination, largely from the side of his principal accuser, Christine Blasey Ford.  It candidly doesn’t pack the spellbinding tale nor the evil monster that the first half does.

Yet the perspective and importance of this book goes beyond a tale of Harvey.  There’s a lot to be learned about harassment other than that story.  For those of us who aren’t in the entertainment business, but are in the leadership business, here’s a money quote:

In each industry, harassment had its own particular sociology.  In restaurants, liquor was omnipresent at the workplace, eroding judgment and loosening inhibtions, and managers were often loath to confront customers who got out of line.  Silicon Valley was filled with young men who got rich overnight and felt accountable to no one.  In shipyards, construction sites, and other traditionally male workplaces, men sometimes tried to drive out women by putting them in physical danger.  Chris had head of one woman who had been left deep in a mine without any communication device, and another had been stranded atop a wind turbine.

This is very much like the harassment allegations we see in our practice at RSJ/Swenson.  Everyone is unique, yet each industry has similarities.

Don’t Celebrate Promotions

An all too common mistake businesses make when promoting employees is this:

Promotions are celebrated.

man and woman shaking hands

Photo by rawpixel.com on Pexels.com

Actually, a promotion should be the opposite; not a reward, but instead positioned as a massive challenge, opportunity, substantially increased responsibility and – consequently – a job with significantly higher expectations.

The fact is if you position a promotion as a reward without adding additional responsibility and expectations, then you’re just paying somebody more money without getting anything more in return. When you give, you must always ask for – and expect – more.

When I hear CEOs and business owners complain that their managers and executives aren’t giving them what they need, I tell them to look in the mirror. Did they clearly set out increased goals, objectives and expectations? Do these newly promoted employees understand their newly established responsibility for excellence?

If a promotion is merely a reward for a job well done, then we’ve defined insanity: doing the same thing over and over again and expecting a different result.

That’s why merely doing a great job is not reason enough for promotion. (It may be reason enough for a larger bonus, or a higher salary level next year, but not a promotion).

This is where selection of new employees and continual identification of high potentials becomes critical.  You’re not looking merely to promote a competent employee; you’re looking for the people with an aptitude and ability to lead and take everything they do to the next level.  There’s always a higher level of expectation and demand on management that’s simply not there for the average employee.

Those expectations and demands are why newly promoted employees get the fancy title and corner office.  And that’s why the expectations are higher and the consequences must be both substantial and immediate.

When you promote an employee, congratulate them and then remind them – it’s a new world of increased expectations.  What got that person to this point is not what will get them to the next.

So the correct attitude for businesses when promotion an employee is

Promotions are celebrated.

Promotions should be positioned as a challenge with increased expectations.

The Best Performance Review I’ve Ever Seen

Ditch the old way you’ve been doing things and get back to basics.  Performance metrics should set your standard, so people will do the things you actually want them to do.

wide-715px

Boy, have I seen a lot of performance reviews.  They’re basically the same things over and over.  And we get an inordinate number of questions from clients asking for “a sample performance review template” they can emulate in their own business.  Many executives have always managed and evaluated this way, to say nothing of how we pay and promote.

Yet in the past few years away, there’s been a shift away from performance reviews, which is completely understandable.

Performance reviews don’t work because we don’t ask employees what they do to advance our organizational and managerial goals.  We’re not specific enough.  So maybe I should revise that comment accordingly: Performance reviews don’t work as they’re currently devised.

The Importance of Expectations

My experience is that most e­­mployees do pretty well at hitting objectives if they know the specifics that are expected of them.

But here’s the problem: Managers and executives do a lousy job of setting expectations.

Think about it: If employees are going to be evaluated based on attendance and productivity, they deserve to understand why.  “Why do I need to be on time?  I get my work done, so why does it matter?”

Businesses do a great job of creating volumes of requirements for employees; there’s seemingly a rule for everything.  But why?  How do those requirements help us reach our individual goals?

Subjective vs Objective

The CFOs of the world tell us that performance reviews are necessary because they’re objective. When we attribute numbers to the results, we objectively give raises and bonuses and measure performances.

This ideology buys into what I call The Myth of ObjectivityTM.  Of course, everyone (especially CFOs) would love to see performances broken down into averages, medians, and charts.  But that’s not objective.

When a manager reviews an employee’s performance, what really creates the difference between a 3.5 and a 4.0?

Answer: nothing.  Therefore, the rating system isn’t objective after all.  And since it’s subjective, it basically defeats the purpose of having a performance review to begin with.

(Yes, I know that ratings can effectively motivate salespeople and workers with repetitious jobs such as manufacturing, but the latter will disappear soon, due to AI and robotics.)

The Best of the Best

The CEO of at an insurance brokerage firm in Pasadena, CA, wrote the best performance review I’ve ever seen.  I was sitting in a meeting with the CEO and his executive assistant, and we were reviewing our punch list.  I could tell the CEO was getting a bit impatient, so I made this suggestion: “Let’s take a break. My team can finish everything on our own.”

Greg brightened up after I made my suggestion, and asked his assistant, “Remember what your performance is based on?”  She nodded.

Now he’d piqued my curiosity.  “What’s your performance based on?” I asked her.

“My performance and salary increase are based on the number of times Greg gets to golf every month,” she said.  “If he plays at least eight times a month, I get a good performance review and a 10% salary increase at the end of the year.”

Then it hit me.  It was the perfect performance review!  I know many HR veterans are undoubtedly recovering from their fainting spells, but hear me out:

  • The criteria were clear.

Melissa understood exactly what was expected of her, and she was easily able to repeat her goals.

  • The goal was measurable.

Eight rounds of golf per month (or 96 per year)

  • It advanced the executive’s goals and objectives.

Greg wanted to golf. It was a personal goal, and it was important to him.  [Pro Tip: If you want people to do something, incentivize them.]

  • It allowed a talented person to innovate and work autonomously.

For Greg, it didn’t matter how Melissa got him out on the golf course, just that she made  it happen.  So her performance wasn’t tied up in minutiae; it was solely focused on the end result. In other words, she had permission to do whatever she needed to do to get him golfing.

Melissa became a more effective assistant, because every interaction she had factored into that goal.  And she was a much more effective gatekeeper.  (“Does that person really need to have a meeting with Greg, or can I handle it?”)

Summary

Rethink your 15-page form for performance reviews.  What do you truly want that person to do?  What’s the end goal?  Can’t we simplify things, and make our objectives attainable, measurable, and real?  The answer: Yes, we can.  But then the question becomes, “Are we willing to break through the mentality that We’ve always Done It This Way?”

Over the next decade, businesses who are willing and able to change are going to become winners. Your formula for success doesn’t involve being stuck in the past.

On Gratitude

I will never forget 2008-2010.

landscape sea horizon mountain cloud sunrise sunset night morning lake dawn river dusk evening reflection reservoir body of water loch inspirational landscape atmospheric phenomenonOn June 1, 2008, I basically sold 50% of my 5-year-old business to a CPA firm.  It seemed a natural fit and all was set for a mutually beneficial, long-term relationship.

My business, which was providing HR and workforce advice to small businesses, had grown pretty well since I started it in 2003.  But I needed to take the business to the next level, and the CPA firm was poised to help me get there.

Then the Great Recession hit.

My company revenue went down 70% that first year, and then another 70% the second year.  I couldn’t buy a client; my CPA partners were furious, to say the least, and I was wondering if bankruptcy wasn’t the best option for me.

Then, finally, a few key clients came on board.  Slowly, the business came back.  And then it grew a lot more.  And now, since 2014, our revenue has grown 245%.  I have a team of 11 employees.

In many ways, I’ve never been busier.  I’m travelling consistently for business (40 plane flights last year, probably 50-60 this year).  We’re juggling literally dozens and dozens of clients throughout the western U.S. and Canada.

When people see my schedule, they express sympathy: “Wow, you must be crazy busy all the time”.

Today, I respond by saying, “I’m not busy, I’m grateful.”

Today I’m doing things I could only dream of ten years ago.  I travel around the country giving speeches to organizations that actually pay me to express my thoughts about leadership, contemporary workforce issues and the like.  I wrote a second book in 2016, and I’m revising my original book on management, years after it was published.  I’ve got the privilege of being a strategic advisor to numerous executives and leaders, and my talented team of professional provides HR outsourcing to businesses of all sizes in California and beyond.

I’m in a constant state of gratitude for all of this.  When you do things you love, you’re really not busy.  I don’t have to go to work; I want to go to work.  I’m never bored, I see how I make an impact and am grateful for the opportunity to do both.

I’m seriously in gratitude for my talented team of professionals, for my business partners and business relationshipw.  I’m getting the opportunity to be a mentor (and be mentored by) young professionals, for which I’m hugely grateful.

Nothing’s perfect, of course; there are challenges and drama frequently.  But I’m grateful that 90% of the time there isn’t drama.

I don’t know what the future holds for my company.  A recession fairly soon seems inevitable.  But my business is more mature now and should be able to withstand a downturn in ways we could not in 2009.

Did it take a recession and decade recovery for me to establish an attitude of gratitude?  Or was it simply a sudden realization that I’m doing the things I’ve only dreamed of?

I don’t know the answer.  But until I do, I’m grateful.  Every day.

Sustaining The Idea

(Or, as my partner calls it, “Making It Sticky”)

Not too long ago, I received an e-mail from the Managing Partner at one of our clients, a mid-size law firm in Arizona.  You can tell he was a bit frustrated by “the millennial” issue:

The Problem Isn’t with Millennials, It’s with Old People in the Workplace

These kids want, are offered and get more money, more PTO but fail to stay anyway.  They move on and want to see what else is in store for them. Maybe it is our failing but I am at a loss to see how you can make a relationship “sticky”.  I can’t believe we are that bad but if we keep throwing more things like flex schedules, philanthropy, training, recognition and they still leave because THAT IS WHAT THEY DO we have two choices. 

Change the entire way we do business and never give them institutional knowledge that will walk out in two years and will be costly to replace or just settle on making less money.  These kids will then find that they have no companies to go to because they will all lose money and fade away.

I want to try to understand but I will not concede that I work for them!

Here’s my response (both his e-mail and my response received his permission to be published).

First off, no one is suggesting that owners work for employees.  You don’t need to make that concession!  Your employees are keenly aware they work for you.  You may not see that respect and fear every day, but I do.  It’s the reason many employees – including partners – choose not to publicly disagree with decisions made at your firm; it’s not worth the fight and – in the end – they know who the boss is.

Secondly, I’d dispute your second paragraph; I think there’s middle ground between changing your entire company or settle on making less money.  That middle ground is elusive, but critical.  I would think identifying that middle ground is the single most important thing to taking your firm to “the next level”.  And it all has to do with leadership and paying more attention to the way you manage and lead your workforce.  Over the past 30+ years, you’ve taken your firm to where it is; the challenge is getting to the next step.

Hiring the “Right” person

It all starts with sourcing, interviewing and hiring the “right” person for you.  In my humble opinion, this is the area where you need the biggest improvement.

We’ve seen all the stats, and last year we came up with a figure that it costs you about $25,000 each time an employee leaves your firm.  The single biggest differentiator of your firm and everyone else is your employees.  Think about the number of employees who have left in the past few years that we decided “it was just as well they left”.   According to my records, for every employee you were sad to see leave, there are twice as many that you were happy to see go!

A rough estimate of your turnover costs this year is about $600,000. (11 people lost @ $25,000 each; plus my estimates for recruiting fees for two associates, and recruiting fees for their replacement; and a buyout of a partner.

Mel Kleiman is one of the gurus of recruiting, interviewing and hiring in the United States.  Here’s a couple from his list of “How To Hire The Wrong Person Every Time”.  How many of these apply to you?

  • You only recruit when have an immediate need, so you don’t have a list of pre-screened candidates to call. Now you’re in “desperation hiring mode” – pressured to hire the first warm body that walks in the door.
  • You haven’t identified the particular Capacities (mental and physical), Attitudes, Personality traits, and Skills (also known as CAPS) needed to be successful on the job at each level. (You can’t hit the target unless you know what it looks like.)
  • You don’t ask your employees, vendors, business networks, family, and friends if they know of anyone who would be a good fit for the job. (Referrals are the No. 1 best source of new employees.)
  • During interviews, you rely on gut instinct so, naturally, if you “like” an applicant, you look for reasons to hire them and, if you don’t “like” them, you look for reasons not to hire them. This way you get to be right (but you also often hire the wrong person for the job.)
  • You don’t plan for the interview. You just wing it and the inevitable result is that you hire the person with the best presentation skills rather than the person who is the best fit for the job.
  • You don’t check references because you just assume that none of these people will tell you anything useful.

So with the cost of turnover negatively impacting your firm, the inconsistency of hiring and its probable impact on your customers, who’s in charge of the hiring process?  Two managers who have virtually no leadership experience and, until last year, had never interviewed a job candidate before.

You hiring only for ability – or trying to – and hoping the other attributes – attitude, aptitude, agility, alignment – will come along organically.  I encourage employers to hire for the last four first – then train for skills.  Recognizing that some positions require detailed and unique skills – I would still submit the question: How much would it cost to train a really promising employee to do the highly technical stuff?  And would that be less expensive than the revolving door in the that particular office?

I want to be clear: this is not just you, this challenge is everywhere.  In business today, there are new demands for productivity, innovation and talent.  This complexity demands solutions.

In the American workforce – in all industries – there is a significant lack of qualified talent.  Everyone – including your competitors – is out to get them.  We need to start systemically developing an acquisition process from recruiting to onboarding – led by a “Hiring Partner”.

We always talk about game changers needed at your firm.  How many game changers have you hired in the past 5 years?

Why should great employees come to work (or stay) with your law firm?

Who do you want to be?  What characteristics are important to you?  My first attribute, based on 5 years of working with you, is “Our culture is one of true collaboration.  If you’re a top-to-bottom team player, you can play on our team.”

When things work well at your firm, I see collaboration and communication.  People who are true team players tend to get recognition and promotion at your firm.  There may be more talented people, but at your core, you value collaboration.  Sometimes it’s not always intentional, but it’s always there.

On the other hand, there have been several talented people who did not succeed at the firm because – legitimately or not – they were perceived as not being team players and only out for themselves, or a narrow interest.  In my business, people like this are called “Talented Terrors” or “Brilliant Jerks”.  These people are quickly excised from the best companies.  Some companies tolerate them; for the great companies – the cost to teamwork is too high.

What is your goal when giving raises, bonuses, perks?

You can taste the frustration in your writing when you say: “…if we keep throwing more things like flex schedules, philanthropy, training, recognition and they still leave because THAT IS WHAT THEY DO…”

Then why do you do it?  What is your goal?  Is it to increase retention, hire better employees, increase productivity or teamwork?  Is it to get better billable hours?  Why are you doing this?  Are we that scared of people leaving?

I’ve said this before to the partners and I’ll say it again: You cannot give anybody anything without asking for something in return.  You give adequate compensation, generous bonuses, good perks, AND YOU DON’T ASK FOR ANYTHING IN RETURN!!!

Your firm – and I believe this to be a leadership issue from the partners on down – need to raise the bar.  You have higher expectations and you’re willing to generously reward people who meet or exceed those expectations.  But instead, we’re giving bonuses and perks to mediocre employees.  We’re not demanding excellence.

I also think this is a culture issue and a needed culture/leadership change at the firm.  Who are your non-partner stars?  They’re the ones that need to be recognized and compensated.

Those high potential employees are the ones you should be singling out!  What keeps them here?  What would cause them to go?  Let’s act on that!  Some things we can do that might keep them; others would be out of our hands.  But that needs to be a partner focus.

I’d be remiss if I omitted some people who are not high-potential employees but nonetheless highly valuable to your organization.  They don’t seek or get a lot of love, but day in and out, they show up every day, work hard, and contribute to the maximum of their ability with a minimum of fuss.  I’d give a lot to have a team full of people like that.

So my strategic suggestion for how to make it “sticky”? Raise your expectations, HOLD PEOPLE ACCOUNTABLE, live and execute your values and culture (once you’ve identified your values and culture).  Create a culture where you both expect and reward excellence.

Secondly, let’s take a look at the ‘big picture’ when it comes to perks.  There’s a responsibility and obligation required of those who get these perks, and we need to be clear on the reason they are afforded to high performing people.

There’s a big difference between considering occasional work-from-home key people who are high performers; have young families whom they are deeply attached; and essential to the success of your firm), and a mediocre employee who just doesn’t want to drive to work one day.

The reason you’d want to offer this perk is to retain great employees.  Secondly, you’d be telling everyone else a powerful message: If you demonstrate consistent high performance and take responsibility, you will get advantages/perks.

Don’t worry about complaints about treating some people unfairly; you’re setting a standard by which any professional staffer can attain, should they wish.

In “The Real World” today, people get promotions, raises, and perks not just through high performance, but a combination of performance, circumstances and – yes – luck.  If you got a new, huge client which needed a skill that only a certain employee has, then it’s likely that employee will see a more rapid promotional and compensatory climb than his peers).

A frequent complaint I hear among many partners of staff is “there are no consequences for [mediocre performance/lack of rainmaking/not caring/fill-in-the-blank].”  That’s true.  And the reason there are no consequences is that we’ve not made any.  We haven’t asked for a higher level of performance nor developed consequences for mediocre performance, either.

A big challenge at your firm – if not the biggest challenge – is recognizing that talent acquisition and development is a major issue.  It’s critical to increase revenue and the client base, but in this era of increased consumer expectations and sophistication – the way we did things last year will not be the way things are done 3 years from now.  These changes are not cyclical – they are structural.  In order to become a firm of choice – for both talent and clients – this needs to be understood.

Meaningful Work

What do these people want?

I know that continues to be the integral question when it comes to your talent.

Sure, it’s great to get fresh fruit in the kitchen, and no one is going to turn down a free massage, but what truly gets you great employees?

Today, it’s one size fits one, not one size fits all. I’ve heard many asks from employees, and it’s different for every employee, and can be generational in nature but not exclusively so.  What is important to one person [work from home] isn’t to someone else.

A great workplace is not espresso, lush benefits, sushi lunches, grand parties, or nice offices.  You can do some of these things, but only if they are efficient at attracting and retaining great employees.

What IS important to younger employees – and in my experience overrules every other so-called ‘perk’ a business provides – is meaningful work.  The vast majority of people today need to work on something that is impactful to them.  They need to feel they’re making a difference.

One of the most transformational conversations I’ve had in the past five years was with [your youngest partner]. At the time (about 4 years ago), she was a manager and everyone knew she was going to be made a partner sooner rather than later.  We were talking about her collegiate experience and her career choice right out of college.  I professed surprise that she didn’t go with one of the major law firms but instead chose to work at a smaller firm.

She didn’t hesitate.  “I wanted to go where I could make an impact and not be a widget.”  Meaningful and impactful work was more important to her than the (probable) higher salary and better benefits of a large firm.  That’s generational; when I was just out of college everyone wanted to work for that big company and get a chance at moving up the large corporate ladder.

Responsible Leadership

Finally, it’s time to establish a higher level of expectations from the partners and management team.  There has been a lack of attention on talent at your firm, and I’d challenge the management team to come up with ways immediately to improve performance and communication.  Remember what the four most important attributes in leadership are to firm employees:

  • Actions & Behaviors Are Consistent With Words
  • Communicates Openly & Honestly
  • Helps Me Develop & Grow
  • Keeps the Focus on Fixing The Problem Rather Than Finding Someone to Blame

Most of the partner/management team aren’t terrific at any of these, but it doesn’t mean it can’t quickly be fixed.  Everyone on the team is very smart – it’s a matter of paying attention and intention.