The Consultant and the CEO

R Shawn Callahan, Founder of Anecdote Pty Ltd in Australia, has a question for all us. He writes:

"For the last month or so I have been working well with a client and her staff helping them develop their brand strategy. My client heads a division of a company. A couple of weeks into the project I've become aware that my client has an abysmal relationship with her CEO, whom she reports to. I also quickly learned that the CEO is a tyrant and displays many of the characteristics Bob Sutton described in his book The No Asshole Rule. The CEO makes the lives of her staff miserable. They are both terrified and befuddled by her unpredictable, bullying and overbearing behaviour.

"Last week my client went overseas for work and the CEO has decided she wants to run the branding project during my client's absence. The CEO attended a meeting of the leadership team I'm working with and she proceeded to denigrate her staff telling them that their opinion meant nothing and then proceeded to attack the project. The staff all looked at me to say 'sorry' but couldn't say a word.

"My question for you and your readers is this. How involved should a consultant get in trying to help a group of people who can't make headway because the way the CEO behaves?"

***

Shawn, others may disagree, but my opinion is that you have virtually no choice. You were not hired to help the group deal with their boss, and it's neither practical nor "the right thing to do" to try and take on that role. You're gonna lose!

Maybe, if you really have superior psychological, political, interpersonal, sociological, emotional and intervention process skills, you could pull this off. But the odds are incredibly low. It's one thing to be explicitly hired as a process consultant to help an organisation function, with the CEO's explicit consent. It's a whole 'nother thing to take it on as an extra challenge on a project where you were hired to do something else.

And if that means the project you were hired for is doomed, well, it's doomed.

***

Anyone else have different advice for Shawn?

Client Focus and the Halo Effect

Ed Kless, Senior Director of Sage Software, just wrote me an email asking this: "I have just finished Phil Rosenzweig's The Halo Effect. It casts some serious doubts on the beliefs of many people in business today. In particular he calls in question the belief that customer focus causes financial performance. This has been a key belief of mine and was reinforced by your articles. I would be most interested in your seeing thoughts (if any) as a blog post."

Well, Ed, Rosenzweig's book is, indeed very stimulating. He doesn't actually question the conclusion (or belief) that customer focus causes financial performance; he challenges the validity, rigour and logic of the various studies that purport to have proven the link. In the language of the court system in Scotland, it's a matter of "case not proven."

Rosenzweig's main point -- the halo effect -- is that it is a fatally flawed research approach to identify successful companies and then ask people (internal or external) what attributes these companies or leaders have. He argues that this approach could equally well uncover attributes that are the outcomes of successful financial performance, not the cause of it.

So, he points out, if you ask observers or employees at a financially successful company if the company is customer focused, there will be an "after-the-fact" bias to say "yes," whether or not the company actually was, in some more solidly measured way, actually more customer focused than others.

Rosenzweig's targets are books like "In Search of Excellence," "Built to Last" and "Good to Great." He doesn't say their conclusions are wrong; he says their conclusions are not even close to being "proven" (contrary to what the authors say.)

My articles are not covered by Rosenzweig but I have no doubt he would make a similar critique of my methodology. I surveyed people in 139 businesses on 74 questions and explored the statistical relationships between that opinion data (on what was and wasn't going on in their office) and the financial performance of those businesses.

I think I would argue two relative strengths of my study: By allowing the statistics to tell me which of the 74 questions had explanatory power, I allowed the data to be discriminating between which aspects of office culture was correlated and which wasn't.

If you were nit-picking, you COULD argue that all I discovered is which characteristics have a high halo effect (i.e. are given high ratings by employees when things are going well) and those that have a low halo effect. But that's a pretty complicated argument.

Secondly, I did use a statistical methodology (structured equation modeling) -- used by none of the authors Rosenzweig examines -- which allows you to test for causality (and the direction of causality) not just correlation. (Which is one of his big concerns.)

So, net, net, net -- I think he's written a terrific book to remind all managers to beware of quick fad conclusions, and to remind all researchers and consultants that many (if not most) relationships in business that we think we know for sure actually don't have much of a solid research backing to them.

(Which by the way, was also the subject of Pfeffer and Sutton's book: Hard Facts, Dangerous Half-Truths and Total Nonsense)

Great People Decisions

Claudio Fernandez Araoz, a senior partner at executive recruiting firm Egon Zehnder International, has just published a book offering a manager's guide to Great People Decisions.

As the subtitle suggests, it's about why people decisions matter so much, why they are so hard and how you can master them. I'm not sure one book alone will make any of us more skilled at people decisions, but this one is a good introduction to and summary of some of the latest research in the area, as well as the author's own extensive experience. It will make you think, and you'll enjoy the personal stories. Araoz comments:

"Nothing is more important for your career success than making great people decisions. Just think about it: once you become a manager, everything you do will depend on the people you've chosen: your results, your performance, your chances of being promoted, your risks ... In short, your career success."

"However, we rarely get any type of effective education for these crucial skills! Making great people decisions is a craft, and a discipline. It can be learned, and it should be learned."

What have YOU learned about the craft, skill and discipline of making better people decisions. How did you learn it?

Where Should Marketing Time Go?

In this video clip, we're going to explore another example of how you go about investing in a relationship in order to get involved in more of the transactions in business that your client has, otherwise known as cross-selling or expanding a relationship. We will explore the tactics that work with a particular emphasises on how you invest in the relationship.

Sales Commissions

Here's another reader question:

"We run a small-ish (just under 30 employees) but rapidly growing high-end engineering/manufacturing company. In truth, we're more a service firm than a manufacturer per se, in that we provide an enormous amount of guidance/advice and consulting services to our clients, in addition to the systems and other hardware that we produce and sell. We enjoy an excellent, almost cult-like reputation in the global marketplace for our products and depth of knowledge in this area.

"We're doing our utmost to build a world class company, much along the lines of Jim Collins' "Good to Great" and with key precepts from your work as well. We've read your exceptional articles, have internalised many of the insights and ideas in them, and have found it enormously helpful vis-a-vis our perspectives on running & growing the business. Truly a tour de force!

"The crux of this message is to ask for your recommendations, if any, in regard to an intelligent commission or bonus arrangement that we can implement for our sales/advisory staff. We currently have our 3 main sales guys on salary as we've wanted to compensate them as generously as we can but don't want them feeling like they have to either punch a clock or as though their income is going to rise or fall on a given transaction.

"Essentially we want them to work with our customers and each other in a fashion that engenders a healthy cooperative environment in the sales office and rewards them both individually and as a group for attaining departmental goals. Each one holds his own admirably on all levels, and as the company grows we want their income to grow commensurately with sales revenues.

"They also do a pretty fantastic job in general within our office operations and so our objective is to structure an arrangement that provides meaningful incentives to them as individuals and as a group without fostering an overly competitive tone. Also oftentimes in this business it takes a collective effort on the part of all of them to thoroughly assess a prospective client's needs, and performance objectives, and then to define the optimal means for achieving those objectives. What we do definitely requires a team of passionate and dedicated individuals.

"I have seen instances within other companies where management's idea of a commission set-up ended up pitting the members of the sales team against one another, sometimes with pretty disastrous results. And customers could immediately sense the overly aggressive and protective attitudes on the part of the sales people (as in "hey, he's MY customer! And that should have been MY sale!!!) We don't want anything to divide our team, we only want to implement a program that will reward them for working with one another and enable them to succeed together. We also want to keep things pretty simple and straightforward for everyone, management included!

***

Thanks for the kind words. I think you can guess my main response, which is that while, like the questioner, I believe in (generous) rewards, it is my experience that any explicit commission system which builds in incentives for particular things will lead people to ignore anything which is NOT included in the system. So, especially since you are of a small scale, I'd keep it personal and human and judgemental (non-formulaic) as long as possible.

That means, working with each person regularly to discuss objectives, challenges, and needs, and also holding regular team sales meetings to solve common problems and learn from each other. The only incentive your people should need is the absolute confidence that you'll play straight with them and be fair -- if they truly contribute in ways that produce results, you'll reward them.

And here's the key, obvious point: if they don't trust you to treat them fairly, no incentive scheme is going to work. So, keep doing what you're doing.

(I did a podcast about this, called "You Cannot Manage Through Pay Schemes.")

*****

Does anybody else out there have a different point of view? For example, if this logic is correct, why do we see so many sales commission schemes out there? Are there good ones to consider?

A Summation of What I've Learned

It's no coincidence that the title of this blog is Passion, People and Principles. I believe that possessing all three is the recipe for success.

If you have passion, an understanding of how people work but no fixed principles, then I think you are dangerous. You'll seduce a lot of people to your side, but you'll end up fooling them or betraying them. You'll be an exploiter.

If you have passion and principles, but no understanding of how people work, you'll also draw a lot of people to your side, but it will all come to naught. Without an understanding of people, you'll never build an organisation nor get clients and customers to trust you. You'll be a firebrand.

If you have principles and an understanding of people, but no passion, you'll be righteous but ineffective.

Life, careers and business require all three.

****

Discuss, with reasons. Do not write on both sides of the paper at once (grin.)

Accountability

In the following video we will make the case that, if the employees of an organisation are to raise their performance, then logically what is required is that the managers must first be better at performing their role and that, in order to make this happen, the managers must be prepared to be accountable for their performance. In the video, you'll see one idea put forward about how managerial accountability for performing the managerial role could be installed inside an organisation.

Authentic Leaders

I'm coming late to the party here, because Bill George's book TRUE NORTH (written with Peter Sims) is already a best-seller. It's a follow-up to George's AUTHENTIC LEADERSHIP book, and here's his description of the five dimensions of authentic leadership:

1. Pursuing Purpose with Passion
2. Practising Solid Values
3. Leading with the Heart
4. Establishing Connected Relationships
5. Demonstrating Self-Discipline

George is the former CEO of Medtronic and is now a professor at the Harvard Business School, as well as a board memeber of such firms as Goldman Sachs, Target and Novartis.

The TRUE NORTH book contains the stories of 125 prominent individuals judged by George to be authentic leaders. It makes for fascinating and inspirational reading.

George obviously intends us to believe that we can learn from these stories, but I walked away believing that, even though there were commonalities among the people profiled, each achieved what s/he did because of who they WERE. As George stresses, these people were formed and forged through their early life experiences.

Which makes me worry and wonder? Can we ordinary folk really learn from these examples? Can the dimensions listed above (which are really personaliity characteristics and deeply-formed attitudes) really be affected by books, speeches, training programs, consultants?

Is leadership development an oxymoron?

The 2R Manager

In preparation for a seminar I was doing, I reviewed a wonderful book called "The 2R Manager," (Jossey Bass, 2002) for which I recommend a lot.

It was written by Peter Friedes, the former CEO of Hewitt Associates, the HR consulting firm.

Pete's basic insight is that, to be effective in managing others, we must know both how to be "requiring" of people (that's the first R) -- make sure that they deliver on and live up to the tasks they take on. A manager must also, however, do this in a way that "Relates" (the second R) to each individual.

These two dimensions can define nine kinds of managers:

The first four are the extremes:

• The Abdicator: low requiring, low relating
• The Demander: high requiring, low relating
• The Pleaser: low requiring, high relating
• The Overwhelmer: high requiring, high relating

Then there are four which are less problematical, but still less than perfect:

• The Supervisor: About right requiring, but low relating
• The Friend: About right relating, but low requiring
• The Encroacher: About right requiring, but high relating
• The Energiser: About right relating, but high requiring
  

The best, in Pete's view, is someone who is about right in both requiring and relating:

• The 2R Manager.

Which are you? Which is your boss?

Managing Dad

In this clip we dig into the parallels between being an effective manager in the workplace and being an effective change agent within your family. How do you learn how to deal with different family members and bring about harmony and joint action in a family situation? And where does that match what you have to do at work?

New Article on "Integrity Impugned"

Because of prior poor experiences -- or the generally bad caricatures that exist about many professions -- clients are often suspicious (at least initially) of the motives of their service providers.

Just think of the many jokes about consultants who act as if they are more concerned about looking for the next follow-on assignment to cross-sell than doing the current one well; lawyers who are suspected of running up the billable hours because they are paid by the hour; and advertising agency people who are more concerned with winning prizes than selling the client's product or service.

Whatever your profession, you need to be prepared for the fact that, at the beginning of every new relationship, you must avoid confirming other people's (inevitable) starting suspicions about your motives, and must actively work to demonstrate that you are, in fact, unlike the providers that the client may have experienced before.

These are the opening paragraphs of a new article of mine called Integrity Impugned. The article is based on my seminars and an extensive blog discussion we held here almost a year ago.

Using Language To Get What You Want

In business, performance appraisal or even out and out criticism supplants skillful use of language and careful presentation of issues and solutions. We will examine a story of exemplary language skills and note the various applications in business life.

A Natural Manager -- New podcast episode available now

The eleventh episode of my new podcast series, Strategy and the Fat Smoker, is now live and available for download.

The series is dedicated to exploring the themes found in my article by the same name.  I encourage you to forward these to friends and associates who may be interested in the topics covered.

In A Natural Manager, the 12th episode in this series, we will hear the story of Jerry Labbate, the manager of an exercise gym in downtown Boston.  The story of Jerry's intuitive management style is rich with lessons for managers in all fields.  We will summarise the key points to help maximise your managerial effectiveness.

NOTES FOR THE EPISODE:
00:36 -- Introduction
01:31 -- A brief professional history
02:45 -- Essential hiring practices
06:40 -- The importance of clarity in employee training
09:00 -- Structuring monthly meetings with the team
11:25 -- Dealing with underperformers
13:45 -- What are the lessons?

You can download A Natural Manager or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players. (Click here for step-by-step instructions on how to subscribe). My seminars are always available for download at no cost.

Winter is Almost Here

This will have been a productive and inspiring season due to everyone's insightful contributions. This is why I want to take the opportunity, one more time, to extend my gratitude to those of you who have joined me and others in the discussions that took place here. I appreciate the generosity and sincerity with which you share your thoughts. Thanks to all of you.

Commentors

Pete Aldin, Jerome Alexander, Alkali, Amit, Richard Becker, Jimmy Blackmore, Wally Bock, Pawel Brodzinski, Duncan Bucknell, Charlie, John Churchill, Anne Costello, Carmine Coyote, Stuart Cross, Ctd, Mark D, Daniel, Dave, Krishna De, Dogidoll, Stephen Downes, Francis Egenias, Heidi Ehlers, Judith Erickson, Guanming Fang, Denis Fort, Eugene Gascho, Geoff, Michelle Golden, Gopalreddy, Phil Gott, Mark Gould, Charles H. Green, Grisha, Ford Harding, Sharon Hayes, Hermes, Joseph Heyison, Howie, Irene, Jake, Jennifer, Jim, Katherine, Anthony Katselas, Kiki, Cary King, David Kirk, Karma Kitaj, Pamela Koons, Greg Krauska, Thomas L., Lynette, MG, Bruce MacEwen, Susan Martin, Peter Marx, Matt Mason, Maxim, Billy Mayers, Erik Mazzone, Francine McKenna, Michelle, David Miles, Matt Moore, Karen Morath, Kate Morrison, Evden Eve Nakliyat, Nancy, Michael Netzley, Norah, Mitch Owen, Sameer Panchangam, Patmcgraw, Johnson Paul, Peter, Priam, Raven, Steve Roesler, Mikeal Rolson, Richard Rosenstein, Sandra, Sandy, William Shipway, Simon, Alan Smith, Sonia, Splinter, Stee, Jim Stepanek, Richard Steven, R. Stipe, Tom "Bald Dog" Varjan, Peter Vajda, Dina Verdict, Vironika, Ashutosh Wakankar, Will, Sasha Willis, Worm, Liz Zitzow

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