Tag Archives: Take Action

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Performance Reviews are Counterproductive (pt 4)

What we can do (pt 4)

What we can do (pt 4)

“Appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.” – Sam Walton

In the past several blog postings we have explored the failings and impact of the current approach to performance management through the performance review and compensation management practices in place at many companies large and small. We found that many businesses are stuck in the past using an approach that is over 35 years old and repeatedly failing to produce the results that the business needs.

We have cited study after study from leading authorities on performance management such as Harvard Business Review, Deloitte, McKinsey, Gallup and well-known thought leaders including Dr. W. Edwards Deming, Marcus Buckingham and others to clearly conclude that the current approach is not effective. After reviewing all of the evidence we presented and much more that is available through other sources, we can safely conclude that the current process is a waste of time, expensive and counterproductive.

So given that the current system is broken and we have a pretty good idea of how it should work, what do we do? In reality there are basically two approaches, confront the issue head-on and openly push for change or to live within the present system and adopt tactics to minimize the damage.

Head-on Approach

Let’s start with the head-on approach and openly push for change. First of all, let’s be prudent and recognize the current environment and risks. For many reasons it is difficult to challenge the current system while being subject to the impacts of the system. Many business leaders have thrived under this system. If they have usually been on the top end of the curve, they may not really understand the true impact that the system is having on the success of their business. If they have been part of an enterprise that was perceived as successful and the annual review and “stack and rank” process was part of that culture, they my not be inclined to change the “formula for success”.

There may be a perceived risk in changing the status quo; after all business has been doing it this way for years with little blowback and significant litigation (until recently). The current approach is packaged and sold as being fair, identifying high performers as well as those who need to find other opportunities, and staying within a budget. If we change, will that be admitting that the past practices were flawed and open to criticism and litigation? There will be all kinds of reasons that try to defend that the current practice is the best practice. The review process has been this way for over 35 years and it will not change easily.

It is important that we are smart about proposing this change. If we focus on the flaws in the current system those currently in-charge may be concerned that it reflects poorly on their leadership. In a twisted sort of way, if we are not careful it may get turned back on us as a performance issue if we are not careful about proposing a change. Exposing issues around systems and policies that impact compensation, retention, and advancement opportunities needs to be done thoughtfully.

The best way to avoid this dilemma is to take the high road. When discussing the need to change current policies and practices in this area, focus on the future state. After all the future state is a better place to be. Focus on the benefits of the new approach and explain how it will better serve the needs of the business (reduced waste, better feedback, higher engagement, true meritocracy).

When needing to point out the shortcomings of the current position, try not to pin those shortcomings on those currently in charge, but refer them to the work of experts in this area. Point them to the blog post on SkipGilbert.com and other authorities referenced in the previous posts. Let those authorities speak for you. We should help others stay focused on the positive. Remember the Change Formula, a strong vision and practical first steps. It will work well for you in this situation.

Also consider timing in proposing the change. A point in time that may have significant leverage will be just after completing the current review and compensation cycle. It will be fresh in everybody’s mind just how bad the current process is and how unfair their rating was, not to mention how they felt selling the results to their direct reports. At that point most people will agree that something needs to change and there is time to get something new in place before they have to do this again.

Another great time to introduce the subject of change is after the annual engagement survey results are received. Typically, as part of the survey follow-up process teams are asked to review their results and propose solutions to overcome the areas of concern. This is a great opportunity to raise the issue at the grass roots level. If this shows up in enough of the responses, it may prompt a greater awareness of the need to change.

Working Within the System

Most of us are not in a position to change the performance review and compensation management systems, policies and practices. But that does not mean that we are helpless victims of the shortcomings of the current process.

There are things we can do to minimize the damage to the performance of our teams.

Here are four things you can do right now to move in the right direction:

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Performance Reviews are Counterproductive (pt 3)

Performance Management (pt. 3)

Performance Management (pt. 3)

“Only 29% of employees “strongly agree” that their performance reviews in the workplace are fair, and even fewer — just 14% — say they’re inspired to do better thanks to their feedback” – Gallup 2017

In a previous post, we walked through a typical annual review cycle and proposed a solution that moves us from a reactive, engagement killing process to a proactive business management process. In our new process we meet with each resource on a weekly basis and have a quick conversation to ensure alignment, offer assistance, provide feedback, and then make a short note in our performance management system. In making this change we have moved from an archaic backwards view of past perception to a proactive system of engagement and leadership.

Now that we’ve tackled the annual review process, let’s look at the so-called performance management aspect of the cycle, perhaps more accurately defined as an internal business compensation management process.

The purpose of this process is to allocate rewards to meet retention and succession plans. It has little to do with managing performance. A once per year feedback session provides little opportunity to adjust behaviors and outcomes; it is just a report on past perceptions.

What is the true business need?

Let’s quickly review what the true business need is from the performance management portion of the annual review process. Going forward, let’s refer to this portion as the compensation management process because that is really what it is. (The annual review was a feedback session on performance. We have now repositioned that aspect into our weekly check-in process; we are now left with the annual merit and compensation process).

The business has two primary needs from the compensation management process, retaining its current workforce at market rates and ensuring it can meet succession needs in the future. That is it. All other associate expense and development plans spin off of those two needs.

In meeting these needs and mixed with concepts such as rewarding for greater performance, retaining top talent, attracting new talent at market rates, while staying within budget has resulted in a misguided need to stack rank employees relative to each other. Somewhere along the evolution of this process it became absolute and complicated and, in the end, not achieving its purpose at all.

So, let’s breakdown the compensation management process and look at it in more detail so that we can understand the current shortcomings and understand how to fix the system.

With the old approach the next step would be to stack rank each associate for purposes of distributing merit increases, rewarding exceptional performance, allocating development opportunities and supporting succession planning. In this process the manager would be required to rate all associates in their control from best to worst along an arbitrary scale that must result in a normal distribution performance curve. The curve must be met on a team-by-team basis, leaving no opportunity to recognize relative team performance and putting team members in competition with each other for compensation and development opportunities.  What could possibly be wrong with this approach?!

Why stack ranking is so wrong

Rater bias and lack of metrics are the primary downfall of any attempt to rate and rank employees. Studies have consistently revealed that each manager has a different perception of performance and ratings vary accordingly. One of the most complete studies ever conducted in this area was published in 2000 in the Journal of Applied Psychology. In that study in which 4,492 managers were rated on certain performance dimensions by two bosses, two peers and two subordinates found that 62% of the variances in ratings could be accounted for by individual raters’ peculiarities of perception. Actual performance accounted for only 21% of the variance. According to Marcus Buckingham, “Although it is implicitly assumed that the ratings measure the performance of the ratee, most of what is measured by the ratings is the unique rating tendencies of the rater.”

The lack of key metrics across the team is another shortcoming of this approach. Recall in our opening post about the manager being challenged to rate the performance of an employee against all others in his or her team. The challenge was that, “I do not have a consistent set of metrics that truly reflect your performance in comparison to your peers or the overall goals (assuming that you even perform the same function as they do), and so I am left with my perceptions and intuition.”

So without metrics to truly measure and compare performance, the evaluator is left with their perceptions, intuition and biases. Try as they might to be fair and even in their rating and ranking, personal bias and preferences that the evaluator may not even realize they have will impact the “fairness” of the results. A hidden bias against perceived stereotypes, personalities, physical traits, gender, race and other discriminators are now in play. All of the things listed are the nightmares of HR departments around the world, and we are using this system to allocate raises and opportunities. Yikes!

In fact, considering the inconsistencies that are possible with this approach, many major corporations are discontinuing their “rank and stack” practices given the current litigation environment. In fact, Ford and Goodyear recently settled litigation regarding the “fairness” of their practices. Troubled by possible litigation as well as costs and ethical considerations, even prior advocates for this practice have turned away from the stack ranking approach. In 2013 Microsoft ended their use of this practice. Even long-time proponents such as General Electric, Adobe and Deloitte have abandoned the practice, with Deloitte going so far as to “declare the system dead” in a Wall Street Journal opinion article.

Proper use of a performance curve

Continuing with the current process, having now created a stack ranking comparing the perceived performance of each individual relative to their teammates, it is quite common that the manager is asked to group these ratings into broad categories possibly rated one through five. These ratings are to be fit to a normal distribution curve, sometimes called a bell curve. The idea being that it will identify the top performers for additional merit and development opportunities as well as expose and penalize a group of low performers that require performance improvement or potential release from employment. The policy may dictate that no more than 10% be rated as “high performing” and 10% be rated as “needs improvement”, with everyone else being spread equally across the center of the curve.

Let’s take a look at the impact of this process in more detail:

  • First we limit the number of potential high performers. In a team of 12 – 25 employees, this limits the process to just one or two individuals. What if there are more with high potential and performance in this team? How will they react to not being recognized?
  • Secondly, we force those at the bottom of our imprecise and biased assessment system to become the absolute losers. They will not be considered for merit, advancement or development. They must change the perception of their performance before the next review period or risk loss of their employment. What if we missed it, what if they fell into one of our blind spots or biases, what if they are good performers and we just do not know them well enough?
  • The remaining group is the middle of the pack, which is more or less rated average. The policy requires splitting hairs between individual performances to make sure it fits the curve. Interesting enough, from a financial perspective, this is where the majority of the merit increase budget is spent (not on high performers), but we are splitting pennies between resources for average performance. The difference between a 2.1% and 2.2% increase is insignificant at the individual paycheck level.
  • This practice creates a class system of winners and losers, pitting the team against itself for survival. This is clearly not a cultural characteristic commonly attributed to creating teamwork or high performance organizations. The resources are now focused on internal competition rather than collaborating to focus on external threats and competition.
  • It creates an environment where associates will come to believe that their performance is not the true driver of opportunity and success. They may realize that in spite of their outstanding efforts and results they may not be recognized and possibly even penalized by being part of this group. It can certainly be a cause of higher “churn” within a team or turnover at the company level.

The net result is that this policy and approach do not yield the results the business really wants. It does not properly recognize and reward performance, creates a culture of conflict, lowers engagement and misappropriates corporate funds and opportunities.

A significant problem with the use of the bell curve as a measuring and metering tool is that it is the wrong curve. Research conducted in 2012 across 633,000 people in 198 different categories of work found that performance across 94% of these groups did not follow a normal distribution (bell curve) but rather into a power law distribution. We are more familiar with power law distributions with names like the Pareto Curve or the 80/20 rule, also referred to as “long tail” curves.

The research found that typically there is a small number of “hyper-performers” that are clearly outperforming the rest of the population and the remaining group that are simply “good performers” and that there is very little statistical difference in the performance of the good performers.

These findings are further validated by another study conducted in 2012 that concluded that the top five percent of workers in most companies outperform average ones by 400%.  In an article published in the McKinsey Quarterly in 2016 titled “Ahead of the curve: The future of performance management”draws several key conclusions from these observations:

  • “…bear in mind the bigger news about power-law distributions: what they mean for the great majority of employees. For those who meet expectations but are not exceptional, attempts to determine who is a shade better or worse yield meaningless information for managers and do little to improve performance.”
  • “The point is that such companies now think it’s a fool’s errand to identify and quantify shades of differential performance among the majority of employees, who do a good job but are not among the few stars.“

The net of these finding is that the use of the bell curve or normal distribution curve does not drive a process that meets the needs of the business. Instead a simpler approach using a power curve such as the Pareto curve (80/20) will produce much better results with less effort.  To further simplify, what we want to do is identify the top 20% that are the clear contributors and heap rewards and opportunities on this group. The balance of the group which will be the majority of the population will all receive the same base merit increases based on retaining this group at current market rates. As McKinsey points out, there is little benefit to be had in trying to identify the shades of differential performance among the majority of the employees. To do so risks evoking the unfairness of the stack ranking approach over the broader population with all of the risks that go with that approach. The 20% that are leading the pack are easy to identify and most readily accepted by all of those around them as being high performers.

For the annual merit and compensation cycle we use a performance curve that allows us to reward the clear performers and not penalize everyone else. As managers we all know the people who have made outstanding contributions and we all know those that are not performing. We do not need a complicated and discriminatory process to deal with those situations. We encourage everyone to develop their skills and potential and let their personal drive and performance sort out the achievers.

The use of the power curve approach meets the needs of the business. It achieves the goal of providing a process based on meritocracy, rewarding those producing the greatest results, without the downside of creating internal team strife and competition. It accomplishes this while being able to keep labor expenses manageable by keeping the cost of labor at market rates.

Summary

In summary, many businesses are stuck in the past using an approach that is over 35 years old and repeatedly failing to produce the results the business needs. The process requires that the entire organization becomes distracted from their core business activities to perform the annual review process, often taking months to complete at a huge expense.

The process starts with attempting to recall all of the accomplishments for each associate over the past year and summarize in self-reviews. We are then required to bundle all of this together, combine it with our comments from the performance review and hold an annual review/feedback session with each associate. Based on concepts such a pay-for-performance, meritocracy, and overall fairness, the business would smugly declare that their process effectively ties performance and reward into a tightly managed and effective process, rewarding performers, providing development for future leadership needs, delivering feedback to drive engagement, and manage associate performance.

Here is the net effect of the process according to recognized authorities on performance management:

  • “Today’s widespread ranking- and ratings-based performance management is damaging employee engagement, alienating high performers, and costing managers valuable time.” – Deloitte Insights 2014
  • “In a public survey Deloitte conducted recently, more than half the executives questioned (58%) believe that their current performance management approach drives neither employee engagement nor high performance.” – Marcus Buckingham – HBR 2015
  • “Only 16% of employees feel they benefit from their annual review; 76% don’t feel heard during reviews.”– INC Apr 2016
  • “In 2016, only 33% of employees in the United States were engaged, and employee engagement as a whole increased only 3% from 2012-2016.”– Gallup 2017 Employee Engagement Report
  • “Annual review cost estimates run from $35 Million for a 10,000 employee company ($1.2 Million for a 500 employee company).”– Accenture 2018

So let me sum this up. The typical annual performance management process is a waste of time, it is expensive and is counterproductive. Why do we still do this? If you are in executive leadership, why do you let this happen? For all of the rest of us, when are we going to express our sincere dissatisfaction with this process and push for change? If you need help with this, contact me.

Here is the next question, “so if I am not able to change the current system, how can I best operate within its limitations and do the least damage?” I think this will be a great topic for next time. In the meantime, let me know your thoughts on performance management through the annual review process.

Thanks,

Skip Gilbert

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Performance Reviews are Counterproductive (pt 2)

Performance reviews (pt. 2)

Performance Reviews are Counterproductive (pt. 2)

“Traditional performance reviews have passed their sell-by date. Big time. There’s research showing that roughly two-thirds of performance appraisals have either no effect – or a negative effect! – on employee performance.” – Dan Pink

In the previous post we laid out an argument that the performance review process currently used by many businesses is a collection of patched together policies and practices that are completely ineffective and backward. It is a big statement in itself, so let’s take a closer look at it logically and in detail.

Does this process seem familiar in some manner? As a manager of a small group of resources that is part of a larger business, I ask you once or twice a year to perform a self-review of your activity and accomplishments against an ambiguous set of annual goals handed down from Corporate. These goals are so broad they actually have little to do with your day-to-day activity. Even when these goals are narrowed to better fit your department, they are largely out of date not really reflecting the current highest priorities.

You do your best to fit your actual activity and accomplishments into these goal categories, but many are really a stretch. It is difficult to fit your activity as a trainer into the goal of improving margins on core products, but you do the best you can with it. You work through your notes and report some significant accomplishments as well as your performance against the routine portions of your position. It is really a challenge as there are so many, and they are difficult to describe in sufficient detail to others that may not understand the details of your responsibilities. Perhaps you even resort to just using bullet points to facilitate a conversation, hoping that your manager will engage in a conversation with you before moving forward with your review and performance rating.

As your manager, I am now faced with trying to recall and respond to the information you have provided and blend it with my perception of your contributions as well as the 12 to 25 other people on my team. I do the best I can to reflect and recall your contributions and find a way to reconcile with my perceptions. Here is part of my challenge, I do not have a consistent set of metrics that truly reflect your performance in comparison to your peers or the overall goals (assuming that you even perform the same function as they do), and so I am left with my perceptions and intuition.

Given the number of people in my communication circle, you and I only get a chance to talk occasionally and when we do, it is usually about a business issue that requires my assistance to resolve. We rarely have time to talk about what you are working on; after all you are a trusted team member and generally make good decisions. I do tend to talk more with those that have developed some sort of personal relationship or are working on more controversial projects, but you and I talk on occasion.

Now I am required by a misguided policy to rank my employees to fit a performance curve considering only the people of my group. Even if I am a fantastic leader and have led my group to be high performing, I must rate my people into the same curve as any other manager that may or may not be performing to the same level. By making this rating I am going to reward some and penalize others, solely based on my perception. The impact of this action may place you in a category to receive special career development opportunities, extra compensation, greater job security and a host of other benefits, all based on my perception. Conversely, this rating may place you at the bottom of the stack, denying development opportunities, lowering compensation and placing your employment at greater risk. (We will go into more discussion on performance management and performance curves in the next posting, but let’s stay focused on performance review for now.)

I make the case to my management that since my team is meeting and exceeding its goals that I do not have a group of low performers to fit the performance-rating curve. I am informed that I have no choice, my ratings must fit the curve which means that I have to penalize members of my team that I believe are truly meeting expectations or better with a lower performance rating. The only reason their rating is below acceptable is that there are too many rated acceptable or above. It has very little to do with their individual performance.

Now how do you feel when you receive your review and performance rating? If you are favored, you probably acknowledge the review and enjoy the benefits of the perceptions. If you ended up in a category that you do not agree with, how do you feel? Motivated to change or upset with a system that does not recognize your accomplishments? Do you know what kept you from being a top performer or what you could have done better? How do you feel about receiving a lower rating when you can see others on other teams are receiving a high rating and producing far less than you do? Does this raise your level of engagement?

Ever have one manager give you great reviews and the next one gives a poor review only to have the next manager go back to great reviews? There you go. This approach is arbitrary, creates inequality of opportunity, perpetuates mediocrity, and is possibly discriminatory and illegal.

Let’s try this. How about if we do away with performance reviews completely? How about if we setup a system of weekly communication where we briefly discuss what we are going to do this week and then measure ourselves against our progress and potential. How about if we set weekly goals based on current needs and require leadership to do their job and ensure work alignment?

To start with, let’s disconnect the annual or semi-annual process of the performance review from the merit compensation cycle. Let’s make the performance review a proactive every week brief conversation. The manager asks the associate, what are you working on this week? Is there anything you need? The associate asks am I meeting your need? Is there anything I could do better? That is it. It is a conversation that takes a few minutes in the week. It happens every week. The manager is ensuring that the work being performed is aligned with business needs and the associate receives guidance and feedback. Everybody knows exactly where he or she stands all of the time.

Note to associate: there will be no excuse for not knowing how you are performing. If you are unsure where you stand, it is your responsibility to ask.

Note to manager: you need to become comfortable with providing direction and direct feedback. If you are unable to do either of these, then you need to find another role. Also, this is not an excuse to micromanage the associate. Notice the question was what are you working on; it was not instructions on how to accomplish a specific task.

For the record we enter a brief summary of our weekly goals and accomplishments into our performance system and with little effort we have a rolling record of our activity and accomplishments. No need to spend days or weeks at the end of the year trying to recall and structure a picture of our accomplishments. It documents itself. The performance review has actually become a proactive management conversation between associate and their manager.

To wrap-up this segment, there is a lot more we can say about the shortcomings of the previous performance review process, such as are the managers truly qualified to evaluate their team? If a manager is rated as low performing by their manager, how does that reflect on how they rate their team? What if you are stuck with a poor performing manager, will they recognize your contribution, what does that mean for your rating? But now we are moving into the performance management aspect of the performance review cycle.

In the next segment, we will discuss performance management concepts and practices and discover that there is a better measure than the normal distribution curve and actually encourage each person to grow and prosper as they choose.  In the meantime, what are your thoughts on the performance review cycle? Is it productive or not? Please be sure to leave your comments below.

Thanks,

 

Skip Gilbert

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So What Now?

So What Now?

“The path from dreams to success does exist. May you have the vision to find it, the courage to get on to it, and the perseverance to follow it” — Kalpana Chawla

There comes a time where we find ourselves at a crossroads of decisions about our next steps in life. Whether professionally or personally, there are occasions when the question is “what am I going to do next?” This is not the same as the small questions of what shall we have for dinner or which movie to watch, these are the big ones, the decisions that have a major impact on us and those around us.

Most often the timing is not of our own choosing. Perhaps there has been a major change in our personal or family situation that has reached a crisis point, or perhaps the unexpected loss of employment. On a more positive note, perhaps there is a new employment opportunity, or family situation that has great potential, but requires significant change or risk. Perhaps we are suddenly unencumbered by previous constraints and now free to pursue our passion and interest. It comes back to the quote from the movie “The Untouchables” – “What are you prepared to do?”

So what do we do? Have we prepared a plan for our next steps personally and professionally or are we just drifting along and hoping for the best? Have we reviewed our passions, talents and strengths and set goals based on our vision of the future? Have we prepared so that as this crossroads approaches we can leverage it for our advantage?

If we are prepared and know where we are headed, then the impending decision can be a very exciting time. As we consider the opportunity we can measure the advantages versus the disadvantages and be in a much better position to evaluate the risk and move forward appropriately.

If we are not prepared, it is not too late but we need to get very busy quickly. We have some serious reflection and planning to do to get ourselves in a position to know how to evaluate our options and which path to pursue. There are many tools available to help us evaluate our current capabilities and market ourselves to available opportunities. A great resource to evaluate our current capabilities and identify a path forward can be found in my book “EXCELLENCE: You CAN Get There From Here!”

Here is the thing, because we find ourselves at a crossroad we have no choice but to make a decision and take action. We can either be prepared to leverage this to move in a direction that helps us achieve our life-goals or we can grab a random opportunity and hope it gets us where we want to go.  I suggest we take the path that helps us grow and prosper.

As for me, I am pursuing my future on my terms. I am fortunate enough to have the opportunity to focus on my passion; to work with you to help you become a more effective leader.

I am pleased to announce the re-launch of SkipGilbert.com as a Center of Excellence. The purpose of this Center of Excellence is to provide a GPS to guide you through the discoveries, thoughts and experiences on your journey to Excellence.

The Center of Excellence provides a portal to thought provoking and industry leading concepts and practices on Excellence, Leadership and High Performance Organizations.

The GPS tab provides access to topic-specific webinars, discussion groups as well as personal and business consulting engagements.

The Book Store provides links to reading material on leadership, excellence, and other materials to help support you on the journey.

Again it is great to be back to working with you as we move forward together pursuing Excellence in everything we do. Please feel free to offer comments and suggestions about this topic as well as reaching out to me individually to discuss mentoring and consulting opportunities.

Thanks,

 

Skip Gilbert

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Keep Moving Forward

4 Tips to keep moving forward

Keep Moving Forward

“We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.” — Walt Disney

Are there times when you just feel overwhelmed? How about those days when nothing seems to be going right, have any of those? Have you or someone you known faced a significant heath or financial crisis? Most of us have at one point or another and we are likely to face more in the future. Sometimes life throws some big challenges our way. What can we do?

We will all most likely face stressful times and hard decisions in our lifetime. These events will happen, usually not by our own making, and most often without warning. As these things occur we have two choices. We can either face the challenge and find ways to keep moving forward or we can surrender. We can either assess the situation and find a way to get to the next day, or not. Clearly the or not option is not a viable solution, so it really leaves us with the move forward option.

People who have faced difficult challenges tell us that the only really solution is to find the strength to move forward. Today may appear bleak and perhaps even hopeless, but if we can find the will to make it to tomorrow we will find that we are one day closer to our solution. When we are able to focus on getting to tomorrow we are in the process of moving forward.

There are many people facing difficult circumstances everyday and if we are one of them then we know the challenge of moving forward. Fortunately, for most of us we are not facing dire circumstances and we should be grateful for that blessing. Nonetheless, most of us feel the stress of things not going our way and have the same feelings as those in dire circumstances though perhaps to a lesser extent.

When we face difficult circumstances either personally or professionally, the best thing we can do is “put one foot in front of the other” and keep moving forward. There is no future in looking back, after all the future is in front of us. Looking back allows our emotions to relive the event and does nothing to help us get to the next opportunity.

Most of the things we fear never happen to us, they are just projections of our imagination. Sometimes we tend to view our current circumstances through a negative lens and only see more negativity in front of us. The reality is that most of the things we fear will not actually happen to us. Our fear is mostly driven by projecting ourselves into other people’s difficult situations. Our empathy for them can make us feel as though we are there and allow us to relive an event that we have never truly experienced.

Our worry is just wasted energy. Worrying about things that most likely will never happen engages us to focus on things that fortunately we will never experience. When bad things do happen, they usually happen in unexpected ways. And here is the thing, we are so resilient that when something bad happens, we almost always find a way to rise above the issue. We would not have gotten this far if our first action was to surrender.

When things are not going our way, the best thing we can do is to keep moving forward. Find a way to get to the next day and things will be better. Hang in there and give ourselves a chance to find a solution. Tomorrow will open a new door and we need to see where it leads.

Here are 4 tips for helping us continue to keep us moving forward:

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Our Reputation is our Currency

4 Tips for managing our reputation account

Our Reputation is our Currency

“It takes many good deeds to build a good reputation, and only one bad one to lose it.” — Benjamin Franklin

One of our greatest assets is our reputation. Our reputation is a reflection of our character and our calling card for our future. Our reputation is the current accumulation of the impression others hold of our accomplishments. It is the net result of what we have done and the way we have done it. Even those who have chosen to produce nothing have a reputation. We each have a reputation. There is no escaping the fact that others consider our credibility and set expectations based on our reputation, and that either opens or closes doors for our future.

Our reputation serves to provide opportunity or stand in our way to our next success. In a way, it serves as a form of currency. We add to our account when we accomplish something that produces respect in the eyes of our observers. When we complete a task or activity or produce something of value, the net result of that accomplishment gets credited to our reputation. Completing a project with excellence, helping someone in need, taking time to teach another, producing a better widget, all are things that get credited to our account in a positive way. Think of these as a net deposit to our account.

We make withdrawals from our account when we do something that damages our reputation. Claiming someone else’s work as our own, not meeting our commitment, not completing the work we were paid to produce and other things of that nature, withdraw from our account. The rate of withdrawal may be much more rapid than the rate of deposit of positive experiences.

We borrow from our account when we ask other people to trust us or to trust someone else based on our recommendation. When we ask people to move forward with something they are not sure about, they do so based on the value of our reputation. If in their eyes we have proven knowledgable and trustworthy then they will take a risk based on our advice. We have loaned out our credibility and reputation in the form of trust. If our advice proves trustworthy then our account will be credited with interest. If our advice proves not to be trustworthy, then we will have lost the value of their trust and reduce the balance in our reputation account.

Everything we do or say impacts our reputation and impacts how other people see us. With every interaction we are either adding or subtracting from our balance. We either continue to prove our trustworthiness or we diminish it. Every transaction either adds or subtracts from our account.

More than ever our reputation is being measured in public. Social media like Facebook and Twitter make it extremely convenient for others to vocalize their opinions of us. Metrics are available such as likes or retweets. If we publish, our readers may make comments. When we produce something our product may be reviewed on Amazon or Yelp and our comments may produce reactions. Consider that even our credit rating is a measure of our reputation. All of these things drive the total picture of who we are and either raise or lower the balance in our reputation account.

Our reputation is earned, not inherited or purchased. There is no amount of money that can buy a good reputation. Money may be spent to create positive messages, but in the end it is the people that we interact with that determine our reputation. Eventually, our true character will filter through the publicity and set the tone of our reputation. Our reputation is driven by our actions and how they are perceived by others.

It takes a long time to build a positive balance in our account but we can throw it away in a few minutes. We need to be careful how we spend our reputation. Do we continue to use it as capital to build greater success or do we throw it away by compromising our values?

Here are 4 tips for managing our reputation account:

1) Live our values. Ultimately our true values will be revealed. We are better served to understand our values and live up to our standards. Anything else will eventually be revealed in our reputation.

2) Think before we act. Is this action something that we could be proud of or does it fall short of our character? Pause to evaluate our action and not just follow the crowd.

3) Consider how our actions will be perceived. We need to act according to our values, but we need to do so in a way that considers how it will be received. Act in a manner that is encouraging and uplifting, even if the action is providing adjusting feedback.

4) Learn from our mistakes. We are not perfect and it is beyond our capability to be so. However, we can strive to do better next time. As we demonstrate our commitment to following our values our failures will be diminished and our reputation will be reinforced.

In the end it is all about living up to our values and making sure our actions reflect that. The accumulation of the net of our deposits and withdrawals from our account sets the value of our reputation.

Thank you for spending time with me today. I am very interested in hearing more about how you spend your reputation account.

Thanks,

Skip Gilbert

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Motivated or Lazy?

4 Tips for being a better leader

Motivated or Lazy?


You don’t lead by hitting people over the head—that’s assault, not leadership. — Dwight Eisenhower

How do you see people, naturally motivated or lazy? Do you think the average person inherently dislikes work and will avoid it at all cost or do you assume that if people are treated fairly and positively that they will perform at a higher level? The way you answer these questions may tell a lot about how you manage people and the likelihood of your success.

These two different approaches to management are often referred to as Theory X and Theory Y based upon the research of Douglas McGregor at the MIT Sloan School of Management. In his book titled The Human Side of Enterprise he identified two fundamental models of management contrasting the differences in workforce motivation applied by managers.

Theory X is based on an authoritarian or perhaps more traditional style of management. These managers assume that people are lazy and are not motivated on their own to work. This type of manager sees it as their role to force or coerce the worker to perform work and people are largely viewed as a cost to the business. Managers who subscribe to this approach tend to see people as the following:

  1. The average person is lazy, dislikes work and will avoid it if at all possible.
  2. Most people have to be intimidated, controlled, directed or threatened to get them to work toward organizational goals.
  3. The average person needs to be overseen, will avoid responsibility, is not ambitious and simply seeks security.
  4. Workers will take every opportunity to slack off, will not achieve their potential and require close supervision.

Managers who practice Theory X are often autocratic and controlling and believe they need to drive people to make them do their work. These managers tend to micro-manage, are extremely task oriented and not largely interested in developing relationships with their subordinates. Little effort will be expended toward developing a positive work environment and recognition and appreciation is rarely shown. Workers in this environment tend to be motivated by fear and feel unappreciated.

A significant aspect to Theory X management is that people are the first to blame, not the process. If something is not working as expected it is assumed that the employees are at fault and should be observed, reprimanded and perhaps even have their employment terminated.

Theory Y on the other hand is based on a more enlightened view based on a model of human need for higher order achievement. These managers believe that if workers are treated fairly and positively with respect for them as individuals that they will perform at a higher level. Mangers who subscribe to this approach see people as the following:

  1. People are naturally motivated to achieve as more of their basic needs are met.
  2. People will exercise self-direction and self-control to achieve organizational objectives.
  3. The average person is willing to accept and seek responsibility as part of their quest for self-fulfillment and seeks recognition for accomplishments.
  4. Most people have the capacity for imagination, ingenuity and creativity and produce more when engaging these skills.

Managers who practice Theory Y are often more participative when making decisions. They value input and the results of collective thinking and value relationships. They tend to see and treat people as individuals and encourage each person to fully apply themselves to the situation at hand. These managers tend to empower their people and trust them to do good work. They tend to see employees as important assets to be invested in and important to the business. Employees in these environments tend to feel appreciated, motivated and part of something larger than themselves.

A significant aspect to Theory Y management is that when problems arise the manager and the employee attempt to examine the issue together as a team and examine where both people and process could improve.

Current research and common experience indicates that Theory Y management will lead to better results. People feel that they are part of something larger and are encouraged to achieve more for the benefit of the business and their own self-fulfillment. They are encouraged to engage the more positive side of human behavior and focus more of their energy on accomplishing the mission.

At times there may be a role for Theory X management when in an extreme turnaround situation or something of that nature, but generally this approach produces inferior results. That is not to say that people should not be held accountable for their results. Quite the opposite. However, with appropriate structures in place Theory Y will outperform Theory X on most occasions.

So here are a few tips for being a Theory Y manager:

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Perform at Our Personal Best

4 tips for achieving our personal best

Perform at Our Personal Best

The will to win, the desire to succeed, the urge to reach your full potential… these are the keys that will unlock the door to personal excellence. — Confucius

Do we perform at our personal best everyday? Are we keeping track of our personal best in the areas that matter most to us? Are we familiar with the concept of setting a personal best? These are great questions to ask of ourselves and great food for thought. To perform at our best we need to keep track of our performance so we can celebrate our success and learn from our challenges.

Part of accomplishing our goals is tracking our progress against those goals. As important as it is to create our goals so that we have direction for our activities, it is equally important that we keep track of our progress toward those goals. When we created goals we made sure that they were going to lead us in the right direction and we probably used a technique such as SMART goals to identify them.

If you are not familiar with the SMART goals process, here is a quick overview:

Specific – Exactly what we want to achieve
Measurable – Set a metric that can be tracked
Actionable – Stated to take action like run 3 miles in less than 30 minutes
Realistic – A stretch but not something impossible
Time-bound – Identify a time that it will be accomplished by

Using the SMART technique we will create goals that we can actually use and ensure that we are making progress in our intended direction.

A key part of the SMART goal is making it measurable. With this we are able to understand our starting point and how we are progressing toward accomplishing this goal. Since it is measurable we can track our progress and use that progress as a motivational tool to encourage our performance. We can see if we are succeeding and celebrate our success or challenge ourselves if we are behind in our progress. With this we are able to see how we are progressing and adjust our approach as necessary.

A great technique for measuring our progress is to create a spreadsheet or create a grid on paper that identifies the starting point for our goal and then provides space to update our current status. Using the running example, if my overall goal is to run 3 miles in less than 30 minutes, then I might setup a calendar and write the number of minutes it took me to run the 3 miles each day. I could convert that to a chart if I am analytical in nature and see my progress or I could give myself a star every time I achieved my goal.

Another great technique and a quick way to see how we are doing is to identify our personal best in our tracking log. Our personal best is the best time or highest level of achievement that we have had so far on our journey to our goal. We could circle or highlight it in our log but also just put it on a sticky note or on our desktop as a reminder of our accomplishment to-date. By doing this it gives us a great target for our next attempt.

Our progress will not always be linear meaning that todays performance may not be better than our last attempt. We may be trying some new technique or approach or just not be able to deliver a better performance than our last time every time. It does however give us a target that is just a little better than last time and something obtainable with just a little better performance. Beating our target keeps us motivated and provides the sense of accomplishment that we need to push ourselves into ever better performance.

Here are some practical tips for achieving our personal best:

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Do Our Best Every Time

5 Tips for Doing Our Best

Do Our Best Every Time

The pursuit of excellence leads us on a journey of self-improvement that can be simplified to doing the best we can and doing better with each chance we get. Excellence demands that we fully apply ourselves maximizing the use of our abilities and knowledge and always strive to produce something better than our previous efforts produced.

Our results at first will only be slightly better than the standard of ordinary as we measure our surroundings at the time. With each opportunity to apply our abilities and expand our experiences we move ourselves step-by-step to a higher level of performance. Just like using our muscles in our exercise program, the more they are used the stronger they become. It is the same with our pursuit of excellence. The more we add to our experiences and learn how to more deeply leverage our talents, the greater the outcome we produce.

In doing the best that we can do, we can fully apply ourselves to see what the best we can do really is. If you are like me, there are many times I have given something less that one hundred percent subconsciously on purpose as a guard against failure. My misguided reasoning would go something like, I will give this a good shot, but not really everything I have so that if it fails, I do not have to face the reality that the best I could do was not good enough. This is a trap that does not serve us well. It does not protect us from failure, but in fact creates a greater likelihood of failure. Not doing our best cannot produce our best results. It will at best produce ordinary results.

One of the biggest challenges is to put aside our ”risk buffer” and actually attempt the very best we can do. We often rationalize our ordinary performance by leaving something on the table so that we do not have to deal with the realization that our best effort was not good enough. The problem is if we hold on to that buffer we never really find out what we can do and we lose the opportunity to make larger strides in our progress.

The idea that somehow not doing our best protects us from risk is just an illusion. Anytime we do not do our best we are by definition producing a lower level of output than we are capable of producing. With a lower level of performance we have increased the likelihood that someone else will produce a more effective result than we have and actually increase our exposure to criticism.

In order to pursue excellence we have to put it all on the table every time. We can not leave something behind to protect our ego from the true reality. If as part of our pursuit we position ourselves to learn from every experience doing less than our best because it might not be good enough seems laughable. All that we truly risk when we do our best is dealing with the reality of where we truly are when compared to the ordinary.

However, in the past ordinary results have been good enough. It was safe (so we thought) being good enough as there was always somebody worse and ordinary was good enough. In fact, occasionally good enough was rewarded sufficiently to allow us to believe we were exceeding expectations without having to do all of the work. Compared to someone who is on a journey of excellence, we will be falling behind as the standard continues to be raised. Not giving one hundred percent will become a self-fulfilling formula for mediocracy, leaving us exposed and conditioned to underperforming and overall not driving our personal satisfaction.

We might surprise ourselves that we are more capable than we thought, or discover that we are not much better when fully engaged than when we did not fully apply ourselves. In the worst case at least we know where we stand and in the best case at least we know where we stand. The only difference being our own self-perception, which we control anyway.

There is no other sure path to excellence than to take the risk of doing the best we can do. We are not trying to be perfect, just better than last time, every time.

Here are some tips to be sure we are doing our best:

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Excellence is an Attitude

It is a journey

Excellence is an Attitude

It is a journey

Journey

For many years I have been searching for examples of excellence and the things that lead to excellent results. Through my search I have found that excellence is not something that can be acquired through training, but it is an attitude or way of thinking. Overall it is a journey from where we are to the best we can be in every aspect of our life.

Excellence is not something learned, but a mindset of relentless pursuit. Just understanding something does not by itself change our behaviors. It is the internalization of this knowledge and the resultant change in our approach and actions that puts us on the path of excellence.

That is not to say that we cannot learn about excellence. Quite the opposite. We need to be exposed to the concept of excellence to understand what it looks like and how we think about it. Much of achieving excellence comes from an understanding of quality and setting standards as a personal best and improving with each opportunity to perform.

When we take a look at the basic definitions of a skill versus an attitude we can clearly see the difference and gain more perspective on excellence as an attitude. According to The Merriam Webster dictionary, the simple definition of a skill is: “the ability to do something that comes from training, experience or practice.” They provide a simple definition of attitude as: “a feeling or way of thinking that affects a person’s behavior.”

The pursuit of excellence is something we have to cultivate from inside ourselves. It comes from the point that we find we are no longer satisfied with our results and seek to achieve the best we can in every area of our lives. It starts the moment we finally decide to put it all on the line and see what we are really capable of producing. It is the point that we take away the safety buffer of leaving something on the table and fully applying ourselves to a result that would be better than anything we have ever done before. Discovering and dealing with our shortcomings may be a rude awakening, but it sets the benchmark for doing better next time.

Nobody can give excellence to us and there is not a course we can take to get a degree in excellence. It is only something we can achieve from within ourselves by doing better than we ever have done before. We do not have to be perfect. That standard is unattainable, but we can push ourselves to do the very best we can. It is our own race, others can keep the score but we are the only ones that can measure the satisfaction.

So what are some of the attributes of excellence we can strive for everyday?