21st-Century Business

New Blog: Catalyst

2011-05-06T07:54:00.000-07:00

I have finally succumbed and moved to WordPress. I hope you join me at my new Catalyst blog.

Romance Me First

2011-04-18T03:38:00.000-07:00

Imagine you're at a party. Great music, fun crowd, festive atmosphere; open bar. Then someone walks up to you and says, "Hi, I'm Chris. Wanna screw?"

Hmn. I don't know about you, but the first thing I'd think is, "Sounds like Chris does this for a living. I wonder what this is gonna cost me." Followed up by thoughts such as, "They don't make latex that thick or penicillin that strong." I don't know about you, but these thoughts would lead me rather quickly to, "No thanks, I'm trying to quit."

There are a whole lot of marketing types who don't get this, though. They hear about Social Media and they gloss over that first word, instead focusing on the second. "Great!" they say, "Another medium for me to exploit!" Then they get frustrated when their broadcasting doesn't bear fruit, and they report to their CEO that Social Media is all about Farmville and Angry Birds and drunken status updates, and has no application to business at all.

...And what does the CEO know? He relies on his wife to let him know what his friends are up to on Facebook. He believes John Stewart's dismissive jokes on The Daily Show. CNN's bizarre Twitter-checking makes him change the channel.

Over the next couple of weeks, we'll be exploring some of the ways to make Social Media work for your company and for your career. The next such discussion will be tomorrow night, on Lolly Daskal's #LeadFromWithin Twitter chat, where I am the guest. Our topic will be Total Transparency. I hope you can join us!

Where: Twitter

What: #leadfromwithin chat

When: 8:00 Eastern Time (US)

Host: Lolly Daskal

Guest: me

VIP: You!

Why: Lolly puts the Social in Social Media. This is a must-attend event!

Overnight Social Media Success (in just 2 years!)

2011-04-11T03:25:00.000-07:00

I've been tweeting daily for two years now. Over that time I've built up quite a network of interesting contacts, but I've never tested it to see what it could do: until this weekend, I was content to build and maintain, and more than anything to learn and to help others who could use an introduction or whose brilliant blog posts deserve a wider audience, that kind of thing.

Well, something got me going, and Saturday morning I posted a call for CIOs and their direct reports. That something was a simple fact-finding question: do top IT leaders, especially in the largest companies, use Social Media? The person asking this thought not, and I decided to gather some facts.

I set myself a goal of 100 CIOs and vice presidents. I figured 100 IT leaders out of 45,000 or so followers - that's probably about right.

Wow, shows you what I know!

Within minutes, I had not only a collection of several score CIOs who were already following me, but also several links to the lists that others had already compiled. Within two hours, I had gathered more than 750 CIOs and top IT leaders. I took yesterday off, but I'm still pushing 1,000 when last I checked.

Lessons:

1. Your hobby just might bear fruit for you in ways most of us don't even dare to imagine.

2. The power of a robust network goes far beyond the participants in that network themselves. Think about my 45,000-or-so followers. Are two percent of them CIOs? Well, possibly. But more likely, the folks in my network know where to find a lot of CIOs. And that makes me wonder: who else can my network help me find? (Jaguar drivers? Hmn... hear that, Lexus?)

3. You have a network too. Even if it isn't tens of thousands large on Twitter, your network spans the globe in six degrees or less. Prove it with this ultra-cool tool from PeopleMaps.

4. CEOs: if your current Social Media leaders aren't getting you results that prove Social is a must-have investment, you need better leaders. I found my CIOs with very little trouble, and I have never billed myself as a marketeer of any stripe. (Strategist? Yes. Mad Man? Hardly!)

5. As for that last one: I may not be a Mad Man marketing genius, but I sure know plenty. I'm happy to introduce you. Just let me know.

Social Media Monday is a once-weekly focus on some aspect of Social. Subscribe to this blog's RSS feed to have it delivered to your inbox each week.

*****

And now for something completely different.

If you're a fan of customer service, as I am, or interested in how to run a company much better than best (as in "best practices," which suck), you may already be very familiar with icon-in-hiding Tony Hsei, CEO of Zappos. Either way, you owe yourself the pleasure of reading this article from The New York Times.

Calling all CIOs!

2011-04-09T03:31:00.000-07:00

This is entirely opt-in: if you are an enterprise CIO or top IT executive who uses Social Media, or if you know one, I'm compiling a list to make a fact-based business case that yes, Social is a great way to reach IT decision makers.

So far, I've identified about 750 in the last two hours. But I know there are more. So here's my call-to-action:

1. If you are a CIO, please reach out to me.

2. If your boss is a CIO, please reach out to me.

3. If you know someone from 1 or 2 who is active on Social, please introduce us.

The surest route is http://twitter.com/tedcoine

Five-Star Bureaucracy

2011-04-08T02:33:00.000-07:00

I hope the title of this post made you laugh. It was supposed to - although I'm afraid quite a number of you will be laughing ruefully, thinking to yourselves, "Wow, that's my company (or my former company)."

I use five stars as mental shorthand to measure all sorts of things. Customer service, of course - I wrote the book on that, literally. But also Leadership. Culture. Innovation, as in, "Apple has a five-star ethic of innovation, while Burger King is probably closer to two."

We leaders are what we build. Company cultures don't happen by accident, although it certainly may seem that way in many instances. The leader's words and deeds, his priorities and the C-level staff he chooses to support him, all contribute to his company's culture either consciously or by default. Zappos' and Disney's cultures are built very consciously, and have been since they hired their first employee. Bank of America? I can just about guarantee you that was by default, although I haven't had to dubious pleasure of working closely with their top leaders.*

Rapid growth is a big problem: believe it or not, it's actually much harder to manage than stagnation or even contraction. So I suppose I can understand a CEO's urge to build a bureaucracy that is scalable, a complex system that will keep things the same as the firm grows from $1 billion to $10 billion, or from 1,000 employees to 20,000 employees.

I can understand it, but I can't respect it. You can't mandate something like that. Cultures scale. Rules and systems? Yikes, they scale too, but in all the wrong ways.

And most importantly - because this is always most important to me, because I'm smart - the last thing you want to do is build a company that sheds or repulses innovators, leaders, and risk-takers the way a five-star bureaucracy is guaranteed to do. You know who likes rule-based cultures? Rule people. People who are so happy thinking inside the box that they actually still use the phrase, "Think outside the box."

If you want to win, build a culture that attracts winners: people who ask, "What's a box?" ...the kind who ask that but then don't wait around for the answer, because they're too busy winning to really care.

If the notion of a five-star bureaucracy isn't instantly funny to you, because it's an oxymoron, then you probably need a job at the public library sorting the card catalogue. You know where you don't deserve a job? The corner office.

* And now I never will. Oh well.

Don't be a Twit.

2011-04-04T02:53:00.001-07:00

Imagine you're at the store, and a mother with two tiny kids is struggling to navigate the door with all her bags while keeping her children with her. You hold the door open, just like your mother taught you, but rather than thanking you she stops dead and holds out her iPhone. On it you read, "Bonnie uses TrueTwit validation service. To validate click here." The link takes you to a page where you have to type out two Catchpa words before she'll walk through the door you're holding for her.

Huh?!?!

This happens all the time on Twitter, and just like the mother episode above, I just don't get it!

Say you notice a person interacting with a mutual friend on Twitter. You go to their profile page to check them out. They seem pretty interesting, so you take the plunge and click "follow."

...and the first thing they do is ask you to jump through a hoop. "[Person] uses TrueTwitvalidation service. To validate click here" followed by a link that takes you to a page with two of those Catchpa security words.

How is this okay? Whose mother would say, "Oh, yeah, that's good manners right there. Good going, Sonny!"

Are you with me on this? When you follow me, you are showing me a courtesy. My only appropriate response is "thank you," although I'm sure some people prefer to say "no thank you" for whatever reason. Allowing someone to follow me - that doesn't take me any effort at all. It doesn't detract from my Twitter experience in any way. A person can have a million followers, and so what? None of those followers take anything from the person they follow.

Now, if you spam me, that's a different story. And if you're a bot, there's at least a chance I'll figure it out. If I do, I'll unfollow you and block you with extreme prejudice.

Folks, you aren't doing anyone a courtesy by "allowing" them to follow you on Twitter, any more than that mother is doing you a favor by walking through the door you've opened. Saying "thank you" - that's polite, and expected, and maybe we'll take umbrage if you don't. But let's not confuse the two.

If you use TrueTwit, please stop. It's rude. Your mother raised you better than that.

*****

See you here at the start of every week for Social Media Monday! I post a bunch throughout the week, as well, so don't be a stranger. And if you like what I write: thank you for commenting, and for sharing it with your friends. Don't worry, I won't make you validate your humanity before extending those thanks. ;)

Don't Spam Me, Bro!

2011-03-28T03:15:00.000-07:00

Auto DMs = Auto Unfollow*

A number of us in the #usguys Twitter tribe were sharing how obnoxious auto-Direct Messages (DMs) are on Twitter.

To summarize our chat: auto-DMs are obnoxious.

Here's the thing. You follow someone because you like what they tweet, or maybe because they follow someone interesting, so you figure, "Hey, we have this third party in common. Maybe this is a good match for us to get to know each other, too." I've found many of my favorite people on Twitter this way, a second or third level in.

So you reach out, and what do you get in return? A spammariffic message in your email inbox saying something inane such as, "Thanks for the follow!" Um... you're welcome ...-ish. I don't need another computer-generated email, is the thing.

The Shameless Self-Promotion

Even better, though, is the auto- shameless self-promotion. "Thanks for following! Friend me on Facebook, too (with link)." Or "Visit my website to learn all about ____ (whatever it is they're selling)."

Come on, folks! You can do better than that. Would you walk up to someone at a party and say, "Follow me on Facebook!" or "Check out my website!" Isn't that how people catch social diseases?

It could just be me, of course, but I'm a little slower off the mark. How 'bout we start with some polite chit-chat. Let me learn about you before we take it to the next level, huh? Just sayin'.

My friend @LewisPoretz has even gone so far as to create a LinkedIn group whose only rule for exclusion is shameless self-promotion. He tells me he's already had to exclude 3 of his LI pals in accordance with this one simple rule.

Folks, no one's perfect - some of us far less than others. (That would be me!) We're all trying to feel our way through the exciting new world of Social together, and it's going to involve all sorts of missteps - I've made more than most as I continue to educate myself, so I'm not just saying that. The more you fail the more you learn, as the saying goes.**

But really. Show some shame - and some tact - when you self-promote.

Next Social Media Monday, we'll discuss TrueTwit. As the ironically completely un-ironic name suggests, it takes a true twit to think this imposition is acceptable.

For earlier Social Media Monday posts:

You Can Run, But You Can't Hide

The Three Roles of Social in the Enterprise

My Follow-Back Policy

Introducing Social Media Monday!

* I wish I could remember who tweeted this piece of wisdom this weekend on #usguys. (Was it @starry_girl?) If you know, I'll amend this post. Sorry!

** Maybe it's just me who says this. If so, please make it your own. It really does work.

CEOs: Don't Sideline Your Best Talent

2011-03-27T04:49:00.000-07:00

Quick quiz: what was the day job of the writer and star of the Best Movie of 1976 before he made that film? (Answer below).

A few years ago, the last time the economy was booming, I read one article after another dispensing the same career advice: if you want to move up in your company, leave it. Work elsewhere at a higher position, then (if you still want to) come back - in this way, you can jump the line and gain a much higher position than if you stayed.

Kinda hard to remember a job market so abundant with opportunities that people would throw away perfectly good situations with a current employer for so calculated a move, isn't it?

Here's the thing, though: I saw it work with my own friends and acquaintances again and again and again. And I'm watching this very thing happening again now.

"Whoa!" I hear you shout at your screen. "That's just irresponsible, Ted! Stop that!!"

Okay, okay. As with all responsible career advice, this one comes loaded with caveats. I do not advise you to try this at home (or at the home office). And I certainly am not suggesting that this is a trend - yet. Most people I know are still hunkered down, holding onto their current positions in fear of disaster should they lose it. Given recent events, that's pretty smart.*

But in some sectors, especially technology, the Great Recession is already over. Some firms are once again finding it hard to fill their demand for talent. They're spending all sorts of money on recruiting efforts, and more money on new-hire training, and even more money when some of those new-hires don't fit and have to be replaced - and meanwhile, they're blowing off the greatest pool of already-trained talent any recruiter could ever dream of: their own current employees.

Yes, CEOs, I'm talking to you. Especially if you're in technology, your own company is more than likely hobbling itself by ignoring its own talent within the ranks. If you don't personally, as your company's leader, do something dramatic to reward your staff for elevating those beneath them, you're limiting your firm's growth.

Companies are run by people, and we people are little more than the sum of our prejudices. One prejudice we all suffer from, to one extent or another, is to pigeonhole people. We think,

George is a chicken farmer.

Susan's a waitress.

Andy's a shipping clerk.

Bill's a dropout.

Henry's a mechanic.

Phil's a production assistant.

Sly's an elephant shit-shoveler at the zoo.

...All of which is true. For one period in their careers, all of the people I listed above were employed in those jobs. But they moved on:

George Boldt managed, then owned the Waldorf-Astoria hotel.**

Susan Sarandon is a major Hollywood star.

Andrew Carnegie was the second-richest man of his day.

Bill Gates is the wealthiest man alive.

Henry Ford founded a major car company.

Phil Beuth was President of ABC Entertainment.

Sylvester Stalone's debut movie won three Oscars, including Best Picture 1976.

I could go on with this list all week. The bottom line is, you've got talent in your firm right now that you're grossly underutilizing. What are you going to do about it? Are you going to force your best and brightest to leave because the only option within your company is the slow boat to China? Or are you going to demand that your direct reports reach down amidst the ranks and elevate some of your sharpest talent several rungs up the ladder, and then praise and reward them handsomely when they do?

The most innovative, successful businesses don't make their people stand in line for recognition. "Wait your turn" should not be part of your company's phrasebook.

If it is? Then you deserve all the struggle and lost opportunity that plagues so much of the corporate world today.

* Read this recent post for more sober-minded career advice.

** For the whole story about this remarkable customer service expert, read Five-Star Customer Service

Not In Your Budget? Change Your Budget!

2011-03-25T04:21:00.000-07:00

My friend Gene knows a thing or two about business. While still in his twenties, he created a brand you probably know well (especially if you have kids), took it over $100 million as president, and handed the keys to his backer.

Then he did it again. President. Past $100M. Done.

Then he did it again.

Now, Gene is an author and professor emeritus living by the beach here in Naples part of the year and at Lake Tahoe the rest.

So when you read this, I want you to understand, it isn't coming from me. I may have enjoyed some measure of success along the way in my career, but I've yet to match what Gene can do in his sleep.

Ready? This is Gene's advice to business leaders looking to get stuff done:

"If it isn't in the budget and it will help you make more money, change the budget!"

I know that's going to make an awful lot of professional manager-types uncomfortable. But I hope you'll give it some thought. Compare your results with Gene's before you judge.

And For Best Critic, The Winner Is...!

2011-03-23T02:20:00.000-07:00

If you're after universal acclaim, you're chasing a fool's errand. There is just no such thing as popular consensus. Savvy brands get this, and they embrace it.

Think of vanilla ice cream. Who hates vanilla? It isn't flavorless, just... close. The trick is to start with vanilla and then add stuff, like chocolate chips for starters, or a warm brownie and some hot fudge, plus a little whipped cream and a cherry. Yum. Now you're getting somewhere.

Dumb brands vanilify.* They buy a popular treat from a small producer, and then strip it of flavor so it will have mass appeal. "Too spicy," they say. "Children and old folks won't like that." So they tone down the heat. "Those fresh ingredients are too expensive," they say, so they replace vine-ripened, uber-fragile fruit with frozen and sterile cardboard produce that ships and stores better and so is much less costly.

...And much less delicious. Then they market the heck out of it, and revenues soar - never realizing they're just trading one expense (best-in-class ingredients) with another (advertising).

Don't vanilify. Stand for something!

I see this in my own career just about constantly. It has become a running joke with my wife and me that I will alienate someone - and often more than just one someone - in each talk I give, no matter the group. I says it like I means it, and so I inadvertently step on toes. Now, I really do try to be gentle, and I hate hurting feelings. But when I'm talking to a audience of business owners and I mock the boss who hides in his office all day, sure enough, there will be just such a boss in the third row on the left. Or I pull out an example of a company that gives piss-poor service and, wouldn't you know it, someone's son is a vice president there. Oops. Sorry pal. But his bank really does suck, and you don't have to take it from me, because they just made a media company's ten worst list (again).

So too with this blog. I actually read a post on someone else's blog yesterday that mocked my all-time most popular post, in which I explain my Twitter follow-back policy. It was pretty funny, actually.

Every so often I encounter someone in real life or online who just isn't buying what I'm selling, no matter how appealing I try to make it - and you will too! In fact, let me go one further, because this is vitally important:

If no one is criticizing you, you're doing something wrong!

You're being too vanilla. You're trying so hard to please everyone that you run the risk of inspiring no one.

There are negative people out there, people who resent you because you're positive. You can't change them, because they don't want to be changed. So stop trying. Instead, take a look at what resonates with the people who do like what you have to offer, and give them even more of it! Whether you're a brand, a speaker, a writer, or a clerk at the neighborhood dry cleaners, you're helping some people with some thing - or else they wouldn't be giving you their business, would they? So give them more. Do it well enough, and those very people - the ones who used to like you, and who now adore you - those people will help you by telling their friends. Friends who also want what it is you do better than anyone. Friends who need you.

No one ever won an Academy Award for Best Critic.

Try to keep that in mind next time a snarky co-worker tries to tear down your presentation. How was their presentation? Didn't make one? Oh. I thought so.

* If that looks like Vanilla + vilify, you're not as dumb as you look. ;)

You Can Run, But You Can't Hide

2011-03-21T02:17:00.000-07:00

Recently, something on Twitter got my spider senses tingling.

When I "meet" someone interesting in a chat or through a friend, I like to check their bio - I'm sure you do as well. And what caught my attention was how many of these people are former employees of a certain company.

Interesting. It told me two things right off the bat. One, this company hires talented people. Two, talented people leave this company in droves.

Curious, I reached out to one of these people, a friendly acquaintance who is close Twitter friends with one of my best buds on Twitter. We had a connection through past interactions, and we had a level of trust through our mutual pal. In other words, I wasn't a complete stranger.

"I've noticed something I think you can help me with," I tweeted. "Can we take this to email so I can ask you a question?" He was happy to oblige, so via email I asked him about my observation. This is the gist of his reply:

"That company is a great place to make a name for yourself in our field. Unfortunately, they don't pay well, and management isn't the most enlightened. The nature of the work we were required to do there has changed dramatically since they hired me, too. By the time I left, we were innovating much less, instead spending most of our time on lower-skill tasks. I'm glad I've moved on, and I've never looked back. Same goes for my former colleagues." He named several I also followed, and I reached out to them as well for confirmation, which they readily gave.

I've read a lot of headlines about people losing their jobs because of boss-bashing Facebook posts or indiscreet Tweets. Less sensational, perhaps, is how potential recruits and customers use Social to check before they leap. But it happens every day all day long.

I personally don't choose a movie or buy technology without polling my network first. Of my friends and followers, I've got dozens or sometimes hundreds who will weigh in on anything I'm asking about. Often their replies include really useful links to blog posts, reviews, and articles that make my decision easy and shed new light on the object of my question. Increasingly, this is how it's done in the Twenty-First Century.

Employers, people are checking up on you. Once upon a time (you know, 5 years ago), people would ask a small circle of friends and family before trusting a recruiter and taking the career plunge. Now, that inner circle has expanded to thousands, and through connections it can quickly reach tens or even hundreds of thousands. Because of Social Media, no company can hide behind obscurity any longer.

And this is only the beginning. There are new Social applications, and new uses of existing apps, that haven't even been created yet. Two years from now ...three ...five? What I write about today will be so ubiquitous that companies will have no choice but to actually be better - or suffer the consequences.

Social Media isn't just changing the way business is done for those few of us who participate in robust online networks. It is driving a sea change in corporate transparency. Bad bosses? You can run, but you can't hide.

Join me here every Monday for a new installment of Social Media Monday.

Recruiting Starts at Home

2011-03-17T03:18:00.000-07:00

CEOs: want to recruit top talent? Start by wooing the talent you already have.

Sectors of the economy are heating up, especially technology. That means companies are hiring - a number of them quite aggressively. And whenever there is a hiring blitz going on, recruiters feel the pressure to fill interview slots with bodies. The thing is, savvy hiring managers will pass on any but the most talented recruits, which just brings more pressure: for the recruiter, for the manager with the empty job opening, and for you, the CEO, who wants his company to grow as quickly as the market will allow.

Wow, that's a lot of pressure all around, isn't it? All completely unnecessary.

Right now, I'm observing companies devoting thousands of work hours devising new plans to attract more talent: reaching out via social media, professional organizations, alumni associations, friends and family... paying hefty referral bonuses, flying recruits in from all over the country and the world, offering signing bonuses in some cases - it's remarkable to me.

Just this week, I was speaking to a very talented performer at one such company. And you know what he said about his employer? I kid you not:

"This job is better than waiting tables."

This guy is a knowledge worker, mind you. An expert in his field.

CEO, he was speaking to you! His company is hiring vigorously. He is a top performer in his role, not some slouch. Meanwhile, he's itching to leave - he'll be gone soon, and it's all because his company squelched his enthusiasm somewhere (probably repeatedly) between the hiring road show they put on for him and the reality of the present day.

I'm not going to name corporate names because, well, it doesn't matter. Maybe that's your company. More likely it's some other firm. But even if it is, how confident are you that some of your biggest stars aren't saying this about your company right now?

If you want your company to grow in a sustainable way, stop going after talent - make them come after you! It isn't easy, not at all. But it's painfully, excruciatingly simple. Ready?

In order to attract top talent to your organization, make sure the talent you have is so happy and proud they would never dream of leaving!

Employees who love their company* and who are proud to work there are more productive. They are more loyal. They are much less likely to ever leave - not even when a plum offer comes along from a rival.

For years, I've taught business leaders this basic principle of five-star customer service:

Don't bother to pull customers in your front door if their experience is so bad they're just going to walk out the rear in disgust.

Pulling them in the front: for new customers, that's the sales process and advertising and other marketing activities. In hiring, that's your referral bonuses, job fairs, and headhunter fees. Save some cash. Focus on the experience of those within your company. CEOs, ask yourself:

1. How does every employee feel about our company?

2. How do I know for sure?

3. For those who love it: why?

4. For those who don't love it: why not?

5. What do they suggest we do to improve?

Let me leave you with words from another highly-talented worker, this one who works for one of Fortune's 100 Best Companies to Work For.

"I love this company. I'm never going to work for another company again. I'm finally home here."

Are your tops stars finally home? CEO, it's entirely up to you - and the top talent you have on your staff. Go for it! Build a talent magnet!

*Yes, I said love, not "like" or even "like a lot." Only Five-Star employers, that special top one percent, count in this race to the top.

The Three Roles of Social in the Enterprise

2011-03-14T02:37:00.000-07:00

Welcome to this week's installment of Social Media Monday!

I've been researching the state of the field of social media within the enterprise (the largest companies) for about two years now. My first note: it's a constantly moving target. Where we are today, where we were just one year ago, and where we'll be in early 2012 are entirely different animals. If you want something established, Social Media is not for you.

If you want new and exciting, you've come to the right place.

As promised Saturday and again yesterday, here is a little about the three roles of Social within the largest organizations. I can't stress enough, results vary tremendously by company. Note: annual pay is an average within the US.

Social Media Community Manager. Pay: $50k. This is not a management position per se, but the term "community manager" is prevalent to describe one of perhaps several official tweeters for the company. This position is as likely to fall under customer service as under marketing. Think of this role as strictly tactical/reactive, although many community managers are earning their stripes by taking it upon themselves to think and act more strategically.

Social Media Leader. Pay $90-120k. Typically, this is the leader of the social media team within the enterprise. Management sees this, again, as a tactical/reactive position - when old-school executives decide their company needs to "get social" in order to keep up with the market, often a manager is appointed and given a small team and a smaller budget to "make it happen."

Some notes: Of the three positions I've researched, this one is the least settled. 1. Where does this leader fall on the org chart? 2. What prior role did they play within the company? Often they're hired from the outside; job descriptions I've read for this look like a train wreck, as the person tasked with creating the description may know little about Social beyond their own Facebook dabbling. 3. What should they be tasked with once they're hired? 4. Do they have any say in the formation or updating of the company's Social Media policy? 5. Are they de facto Strategist, or do they report to an official SM Strategist? 6. How will the company know when they are doing well? For many organizations, it helps to think of this role as a stew that as yet has no recipe.

Social Media Strategist. Pay $150k (up to $250k). There are two ways this position can go: actual expert in charge of crafting and implementing a well-constructed strategy, or help desk manager. Results vary accordingly.

Companies with a Social Strategist may bury this quasi-executive in the org chart, or - still rarely, but increasingly - they can elevate the Strategist as high as a direct report to the CEO (thus the pay discrepancy). It is important to note two things: 1. Most SM Strategists still report to marketing, and only about half directly to the CMO. 2. Most companies I've seen with a SM Strategist who reports to the CEO or at least who stands independent of the marketing department do so because the company has an image problem it is trying to "fix."

I can't stress this enough: this is a blog post. It is cursory at best. Yes, I've collected a tremendous amount of data over the past two years, most notably over the last eight months as I've started my deep-dive into all things Social. If you read this and think you're an expert on Social now... oh, boy.

What are your observations? Better yet, for those of you who are Social Media Strategists or practitioners, what is your own experience? I read every comment carefully, and I often learn from what my readers share. I'm eager to hear from you!

The Most Inane Question in Recruiting

2011-03-13T06:31:00.000-07:00

Recruiters: you live this scenario every day. Your company needs to fill a position, so it's your task to find talent and start that conversation.

Compensation is a key part of the equation. You and the recruit will skirt the topic for a while, most likely, but sooner or later you have to see if the pay fits the candidate. If yes, you can continue; if not, you'll each keep looking.*

To get a handle on appropriate pay, there are two gauges that make sense to me:

1. How much do other companies pay for this type of worker? If you're smart you'll offer better.*

2. How much is this individual worth to our company? This one makes me think of somewhat-unique skills, like a particular inventor or a specific "rainmaker" sales pro or a thought-leader in some new field, perhaps Social Media.

Now, here's one that is a pretty standard question in recruiting, and it floors me every time I hear it:

3. How much did the candidate make last year?

What? I honestly, literally don't get that question. I wish I were exaggerating! You want someone to change roles, maybe within your company, maybe from outside. Either way, you can be pretty sure they are concentrating on two key issues among many: "1. How much can I get elsewhere?" and "2. How much am I worth the hiring company?"

Of course there will be mitigating considerations - of course! There always are. Perhaps they hate their current position, so anything else is looking good right now, even for the same pay, maybe even for less. That's entirely possible. After all, as I said at the beginning of this post, pay is a threshold issue only - there are other factors to consider. Perhaps your company or this new business unit has a really desirable culture, one the candidate is willing to make compromises to join. Perhaps the hours or the work-location or the benefits will be better, or some other issue will trump pay. I would never tell you that pay is the beginning and the end of what matters at work.

But I will tell you it's the beginning. Because if you fail this one, recruiter, the conversation stops.

For about eight months now, I've been researching the pay and job specifications of the various Social Media roles within the enterprise. I've read and/or consulted with all the experts I could identify, I've done my own exhaustive research, and I feel I have this one down pat. It's a hot field that is only going to get hotter, which means true leaders will be able to charge a premium for their services - think code-writers during the dot-com boom, only much more so within the next three years. But this isn't just about Social. It's about making sense.

So recruiters, here is my advice to you: for the rest of your career, never ask question #3 again. I've been immersed in business for a long time now, and I've never heard a less germane question in my life.

Join me here tomorrow, when I share the results of my research on "The Three Roles of Social Media Within the Enterprise."

*I've written extensively about how pay = respect, as in "How much does this company respect me as an employee?" Pay is a threshold issue, meaning if the match isn't right, the conversation will stop at the doorway to your company, and you won't get the candidate inside. Jack Welsh chose GE over IBM because GE offered him more money out of school. Yes, it's important.

Want to Win at Work? STOP WORKING!

2011-03-12T12:30:00.000-08:00

A big part of my ongoing self-education over the past couple of years is to learn every possible thing there is to know about Social Media as used by the largest companies ("the enterprise"). My goal is to position myself as the undisputed leader on the topic. I’ve got some stiff competition (many of them friends), so I never rest: I’m up at five seven days a week reading, blogging, and exploring various Social websites. Throughout the day I keep it up on my phone as I walk to the bathroom or refill my coffee cup. Red lights are a great place to fire off one quick tweet or read a paragraph on a cool new blog I’ve found. And I’ve spoken with hundreds of other experts and professional in the field - more legitimate experts than you probably realize exist.

Obsessed? I suppose. But was Michael Jordan obsessed with nailing the perfect three-pointer? If it’s fun, it doesn’t seem like work.

If you want to win, stop working. Play at something that truly delights you, then figure out how it can turn you a dime. Just don’t forget: the play comes first, or never mind.*

I say all this because I want you to truly value the extensive effort I’ve put into my research. I’m not just some dude with an opinion or two – though Lord knows, I’ve got some pretty strong opinions, and I’m not shy of sharing them. But they aren’t merely conjecture. What I tell you about the Social Revolution is based on the current state of the media, and on the undeniable trends my peers and I see coming.

This is an exciting time to be alive if you’re a technologist; in my opinion, the most exciting time that has ever been. The Social Revolution is going to make the dot-com surge (and burst) look like a blip. We’ll dive into that more another day.

Excited? I’ll see you back here Monday, when I post “The Three Roles of Social Within the Enterprise.”

*****

*Case in point: four sentences ago a lady all dressed in green, with a sparkly green antennae headband, caught my eye and said, “You can’t leave your work?” She asked that because it’s an hour before St. Patrick’s Day Parade starts here in Naples. I’m sitting like an expectant hen over my family’s chairs while they finish up breakfast with the Grandmas and come join me. I’m on my MacBook, typing away in the cool March shade. “Work?” I replied. “I haven’t worked in years! This is fun.” And it is!

The Law of the Umbrella

2011-03-09T02:40:00.000-08:00

A lot of the focus of this blog is advice for CEOs - present and aspiring - on how to transition their firms from 20th-Century organizations to 21st. But the Law of the Umbrella dictates that what is good for the organization as a whole will also work for any team within that org.

Leaders: anywhere you find yourself in the corporate pyramid, you can act as an umbrella for your team. If your company has an unhealthy culture, think of that as rain falling down on your people from above. You can take steps to protect your staff from much of that unpleasantness - not all of it, of course, but you can deflect a lot.

Unfortunately, the opposite is also completely true. Every company, no matter how healthy and wonderful as a whole, has backwaters run by jerks. The umbrella is also in effect here: the healthy culture is still the rain in this case, and the boss opens himself to keep that sustaining moisture from his team.

I don't think we need to spend a lot of time on that last scenario. We've all suffered under tyrannical bosses, and it doesn't take a genius to list their tricks.

So back to the image of umbrella as protector against a harsh climate. Say you're a boss, and your company is... less than perfect. Maybe it's "fine," but you know full well that "fine" never inspired an ounce of loyalty. "Fine" never attracted top talent - at least not reliably - and it certainly never kept that talent on board for very long.

That's why, as leader, all you care about is building a team that is great. Here's how to be that umbrella for your people.

1. Explain your expectations of them clearly and unequivocally. Whole books have been written on this. Suffice it to say, winners want to know how to win. Tell them that. They'll go out and make the rest happen.

2. Spend 90% of your time grooming your winners. Learn from them. Think of your time as a reward that their success has earned.

3. Sort winners from losers quickly. Don't delay that pain. You can't turn a weed into an oak tree, no matter how nurturing you are to that weed. And the experience will be painful for that weed, so you aren't even being nice, at least not in the long run.

4. Explain to your winners how much you admire them. Don't assume they know. Also don't be fawning about it. Just state your appreciation, frequently and specifically, for the things they're doing right. Recognize them publicly and in talks with your peers and those up the ladder (this will get back to them, and they'll love you for it!)

5. Act on this guiding principle: "My job is to make your job easier." In other words, facilitate their success. Your role, whether you realized it or not, is to take the junk away from your team so they can focus on what matters. In an unhealthy organization, a lot of that junk comes in the form of bureaucratic nonsense - hoop jumping, paperwork, senseless meetings that take your staff out of productivity. Keep your people focused on what matters, what pays the company's bills. Be a servant leader.

6. Facilitate their success. If they truly are stars, there's a fair chance they'll have ambitions beyond their current role - not necessarily, because we're all looking for different things from our work. But quite often this will be the case. A talented leader understands when she has a winner, and supports that winner's move to the next challenge. Be a champion, not an impediment.

I've only scratched the surface on The Law of the Umbrella, but I hope this is helpful. Your comments, as always, are more than welcome: they're essential to me, and to my readers. Please, tell us what you think.

*****

This post is dedicated to the best manager of my career, C.L. Indeed, she taught me the bulk of this post through her own example.

Hitting Your Number & Other Folly

2011-03-03T11:11:00.000-08:00

If you haven't read The Wisdom of Crowds, by James Surowiecki, you owe yourself the treat. It's fascinating. The main premise is to show how our collective wisdom just plain crushes the expertise of even the highest-paid gurus, at least over the long-haul.

Surowiecki also explores a number of side-issues, and he does it in the engaging style of the journalist-author, reminiscent of another of my favorites, Malcolm Gladwell, author ofTipping Point and Outliers.

It's down one of these thought-alleyways I'd like to take you now. Surowiecki touched on something that has been eating at me for a while. Perhaps it bugs you as well - or if it didn't before, I hope it starts to. He writes,

"Companies tend to pay people based on whether they do what they're expected to do. In a market, people get paid based simply on what they do. After all, your local deli owner doesn't make any more money if his sales at year end beat his own expectations. He just makes as much money as he makes. Ideally, the same would be true inside a company."

I founded my own company, and I owned all the stock: typical of many SMBs. That means when we made a sale, I got to keep every dime of the money left over after we'd paid all the bills - just like that hypothetical deli owner. Granted, I paid myself meagerly and invested heavily back into the business, but I was investing profits: some entrepreneurs buy boats and beach homes; I bought staff salaries and a cutting-edge website.

The experience has left an indelible mark on how I think about business, large and small. It kills me when companies play games with money, or with motivation, as if incenting people for desired behavior rather than results makes any kind of sense. As if paying people the same for disparate performance in the same role is anything but... um... dumb.

Many roles in business support the organization and thus are hard to measure in direct impact to the bottom line. I get that, and I respect it. But here's one that has never made a lick of sense to me: when two people perform the same role, but one outshines the other - in terms of measurable dollar-in-revenue amounts - and yet is paid the same, or close to it.

Take innovation. One of your research teams invents your company's version of the sticky pad (3M) or the iPad (Apple). That breakthrough becomes a major part of your firm's revenue for years to come. To my mind, as that deli owner, this team is one hell of a lot more valuable to the company than the other teams. Perhaps they deserve a pass on their annual reviews for the rest of their careers. Just sayin'.

Or the IT professional who guides his firm away from an unhealthy relationship with an under-performing vendor, and ends up saving her company not only millions of dollars a year with a new vendor, but also headache and "fit" issues that might be a lot harder to measure objectively. Has this pro earned some job security? A bonus? A promotion? It's remarkable to me how often that type of recognition doesn't happen. What would the deli owner say?

And here's my favorite: I saved it for last on purpose. Look at how you pay and manage your sales professionals. Every year, sales pros are given their "number," the target they need to hit in order to stay employed. They beat their number, they earn commissions, bonuses, gifts, vacations... They miss it, they're in trouble. Maybe even sacked.

Now, so far so good; fair's fair you say, and I agree. But anyone involved in sales knows, what most companies do is say, "Okay Bob, last year you sold $X, so we know you can do better next year. Jan, last year you sold half of $X, so you have to beat half of $X next year."

Over my career, I have known plenty of sales pros and team managers at a variety of companies that have been in a situation like this: Bob sells twice, three times, four times as much as Jan, but he misses his number and she exceeds hers. Jan is a heroine, and Bob is in trouble - yes, perhaps even fired for under-performance.

Really? Really. This may make sense according to the conventional wisdom of enterprises around the world, but I wonder... What would the deli owner think of that? One waitress handles four times the number of tables, brings in four times the sales, of her coworkers: isn't she worth more? Isn't she the very last to lose her job? My God, most sensible business owners would marry her in order to keep that money in the family!

In my humble opinion,* perhaps CEOs and boards of directors can learn a thing or two from the humble deli owner. Perhaps hitting one's number should be less important than, say, bringing a company actual profits.

*Okay, I admit, my opinion is only occasionally humble. I'd say sorry, but I'm not.

4 New Rules for 21st Century Leaders

2011-03-01T02:36:00.000-08:00

Tuesday is guest blogger day, and today I have the honor of hosting Shawn Murphy.
Shawn is the founder and President of Achieved Strategies. Achieved Strategies is a organizational change and transformation firm that helps organizations weave together people, technology, and process and business to achieve results. Shawn is an unabashed supporter of the belief that "the business of business is people." He blogs weekly at www.achievedstrategies.com/blog. He also tweets at@shawmu. You can also contact Shawn at info@achievedstrategies or calling 888.361.5181.

Ted Coiné is a kindred spirit. We both are impassioned by the opportunity to spread the beliefs, words, and behaviors of 21^st Century leaders. We see a shift away from arrogant, self-indulgent, controlling, and self-centered leaders driving businesses. Yes these leaders exist today in major corporations, in politics, in small businesses, and in our community. Slowly, however, these leaders will become irrelevant as humanity is added back into how organizations partner with employees, and emerging community-focused and driven companies become more the norm.

The 21^st Century Leaders are learning from the power of social technology and the way it unites people. They are observing, taking note on what NOT to do when the company finds itself in a PR nightmare. They are learning to speak the truth when called to do so, take the resulting lumps, and move forward. These are but a few of the influences on Generation Y current and future-leaders, Gen X and even Boomer leaders.

People are more connected than ever before. They want to be heard. They want to make a difference. This is a powerful influence on leadership. The observant leader will find new ways to invite people to make a difference. In the context of business, 21^st Century Leaders know how to invite people to contribute at work.

Inviting employees to contribute in the changed workplace will need a new set of “rules.” The header on Ted’s blog states, “Welcome to the new rule book.” Here are some new rules to put in your rulebook.

Transparent intentions. We’ve grown disgusted by CEOs, other executives, and politicians’ inability to speak the truth. From infidelity to corruption, we all want to hear the scandalized speak the truth, to fess up to and own their mistakes. We want to see what they’ve learned. Until then, we’re skeptical of their intentions, of their words.

For 21^st Century Leaders, they know to “own” the outcomes of their decisions. And they speak openly, in public with their people, about difficult decisions and about their potential impacts. People can handle the truth. It’s time to start talking about how company’s can move forward from the tough decisions made over the past three years.

Embrace the virtual workplace. With the cloud growing in importance, and mobile technology abundantly available, leaders will allow work to occur anywhere. Why not allow people to work wherever and whenever. Employee isn’t the only role people fill in their life. Work and personal life will be better integrated to bring greater satisfaction in both worlds. It means quality and efficiencies are to be gained. The 21^st Century Leader embraces the virtual workplace because successes aren’t achieved between 9-5.

Employees are first. The axiom “customers are always right” is turned on its head by leaders of the 21^st Century. It’s about employees first. They get that when employees are heard, encouraged to “leave their fingerprint” on the organization’s offerings, and invited to transform the company, customers are taken care of. It’s an outcome of focusing on employees. There’s no relevance for the old saying about customers coming first. It’s a moot point. Why does this work? It’s because there is a clear purpose and meaning in the work.

Create meaning at work. It’s human nature to want to make a difference. Leaders understand that human need and find ways to maximize it. 21^st Century Leaders mobilize their people to invent/improve better services and products. They encourage cross-collaboration across the organization. They allow employees to interact with customers to improve the company’s products and services. This new’ish leadership approach weaves the company’s values, mission, and vision in interactions with others. This type of leader wants to help employees succeed. When meaning is present at work, conversations about profitability become easier. Why? Because employees see how what they do impacts the success of the company.

These four rules are merely the tip of the iceberg for 21^st Century leaders. The social, technical, economical, and political changes are in hyper-drive and changing how people relate to one another. And since leadership is about relating and helping people, your style of leadership must, too, change. Inspired leadership is influenced by the surrounding environment. It cannot exist in a vacuum. Today and future leaders see how their leadership and the environment are interconnected, evolving together. This is the 21^st Century Leader.

Hitting Your Number and Other Folly

2011-02-27T04:36:00.000-08:00

Surowiecki also explores a number of side-issues, and he does it in the engaging style of the journalist-author, reminiscent of another of my favorite authors, Malcolm Gladwell, author of Tipping Point and Outliers.

It's down one of these thought-alleyways I'd like to take you now. Surowiecki touched on something that has been eating at me for a while now. Perhaps it bugs you as well - or if it didn't before, I hope it starts to now. He writes,

Really? Really. This may make sense in enterprises around the world, but I wonder... What would the deli owner think of that? One waitress handles four times the number of tables, brings in four times the sales, of her coworkers: isn't she worth more? Isn't she the very last to lose her job? My God, most sensible business owners would marry her in order to keep that money in the family!

*Okay, I admit, my opinion is only occasionally humble. I'd say sorry, but I'm not.

Your Own Company of One

2011-02-25T02:56:00.000-08:00

I want you to play a trick on yourself, a mind-game. It will make you a better employee, and it will make you a better boss. It will make you enjoy your present work situation more, and it will set you up well for your next gig, whether that's within your current company or outside it.

The game is simple: as an employee, act at all times as if you are an outside consultant brought in by your employer to work on a project. If you do well on this one, if you blow your client away with how useful you are, and with the phenomenal service you provide, you can expect them to ask you to help with another project, and another. There is no contract. They pay you, you do the work, they ask you do do more, pay you, you do that one. You get the picture.

You are a service provider. Your "employer" is really your "customer." Every employee at that customer's office is a customer - they're all on the inside, and you're a guest.

How will you behave in this situation? Remember, only Five-Star Customer Service will (more or less) guarantee they'll enjoy you enough to keep you. Only by doing what they need of you better than anyone can you make sure they don't hire your competition for the next project. Keep this in mind at all times:

Incredible Service + Superior Performance = "Job" Security.

I put the word Job in quotation marks because you don't have a job, remember? You have your own small business. Your own company of one.

Now let's tweak this mind-setting exercise for bosses. You are the "boss;" you're the customer. Your team is composed of specialists you have hired to complete a project. Yes, you should expect very high levels of professionalism from them, because they are each small business owners and they have a reputation to uphold and, they hope, enhance.

But here's the other side of that sword, taken from today's headlines: the economy is heating up again, and the best small business owners are once again able to pick and choose their clients. If you don't treat them right, they're out, and you'll have to find a replacement. Not only is that costly and time-consuming, but the folks you have right now are the best of the best (which is why you chose them, of course!), and you know that to lose one means settling for second-best, or maybe worse, to complete your projects.

You don't have "employees;" you have "vendors." And these vendors are expert at what they do. You pretty much can't survive without them.

I'm very comfortable with this mind-game because I owned my own small, highly specialized B2B business for a number of years, which had me wearing both hats at all times. As my company's representative when I worked with a client, I knew that every minute of every day I was basically on a job interview. And with my team, some of whom actually were small business owners and consultants themselves, I never forgot that they could leave and help my competitors at any time. So I demanded a very high level of performance, and I did my best to treat each like a rock star so they'd never dream of leaving.*

I hope you take two points away from this post. First, for everyone, employee and boss alike:

Act like you're on a job interview every day, all day long. (You are.)

And for bosses:

Treat your team like volunteers, not employees. Expect them to leave if you mistreat them. (They will).

*****

Another time, we'll talk about organizing cats - I mean volunteers, an area I have some experience with (and plenty of scars to show for it!) As many experts will agree, no aspect of leadership is harder, and if you can master this art, the world of work - with its pay and benefits and careers... - will seem a breeze. I promise.

*With varying results, of course - this was the real world, not pie-in-the-sky theory.

How's Your Focus?

2011-02-23T03:51:00.000-08:00

Last year about this time I set my New Year's Resolutions.

I know, I'm like that.

This was nothing fancy or well-thought-out, I just did it. I took a piece of scrap paper and wrote down the five things I wanted to focus on improving. They're a little bit private, but I can tell you this: four concerned some aspect of my career, and one was an athletic goal. Family, friends, spiritually - thankfully, I feel very good about those aspects of my life. Your areas of focus might include those, but mine didn't.

Here's how I did:

#1 - Nailed it. Blew my goal so far out of the water, it's impossible to even compare.

#2-4 - Did somewhere between well and okay.

#5 - Oops. Didn't even touch it. Abject failure.

This list, written on a scrap paper, lives in a drawer in my bathroom. Every few days I come across it as I search for the toothpaste or a nail clipper. It's a handy reminder of what I decided to work on last February.

This worked pretty well for me, but around the start of this month I decided it was time to update my list. Not start a brand-new one, because most of those items are ongoing concerns, not "do it and done" type things. They involve getting better at something, and that's a journey.

So Saturday, I retired the first list and replaced it with another. Three items this time, all in some way related to the original five.

This year, as with last, I'm judging everything I do by this standard: Does it promote one of my three goals? Specifically,

1. Does it help me write my next book?

2. Does it help with the career move I'm making?*

3. Does it help me train for the Naples 1/2 Marathon next January?

This post isn't about me, though. It's about you. What are your goals - not for the year, but ongoing? Try to have only a few. Aim for only one. Write them down. Put them someplace where you have to actually read them - preferably, someplace where they're in the way and you need to move them (and thus read them) as you search for the toothpaste.

And judge every action you take, all year long, by how effectively that action supports your quest for those goals. Cut out fun stuff that doesn't clearly promote those goals. Do more of what does.

Let me know how it goes.

*Career move? I've been eluding to this for a couple of months now. I'm only 44. If my role models are any indication, I have at least 40 more years of active work ahead of me (thank God!). So I'm going to continue to evolve and reinvent myself again and again. I can't wait to share my next step!

Best Practices Suck

2011-02-18T03:14:00.000-08:00

Like every good business heretic, I look at the world of commerce with the eyes of an outsider. That means that I question everything I see, every habit of the business world that most others take for granted. "The way we've always done it" is a phrase that makes me throw up in my mouth a little every time I hear it. Unfortunately, I hear it a lot.

Best practices are great and all - if your current practices are sub-par. After all, you have to start somewhere. But catching up with the Joneses is a fool's errand. The best you can ever hope for is to catch up, but that would assume that the Joneses, and all your other neighbors, don't improve. And I think we should all be quite comfortable by now with the notion that standing still is falling behind. After all, isn't that what the firing squad asks prisoners to do? Stand still against that wall, so they can have a clear shot?

When you go to work today, or next week, take the blinders off and really look around. What do we do that is merely "fine?" Why do we do it this way, or that way? Think less about how to squeeze one percent more efficiency out of your systems this year, and more about how you can double your revenue, this year, by blazing a brand new trail.

Want to know a little secret to innovation? What the heck, here are a couple:

* Hire people from outside the world of big business - teachers, actors, small business owners, bartenders, history majors just out of school - to work on your staff. Don't just teach them how you do things. Much more importantly, ask them to tell you what their fresh eyes think of your systems. Every time they ask Why (as in "Why do we do it like this?"), give them a sign of your thanks - a crisp $100 bill, an afternoon off, a long lunch with you someplace special.

* At that lunch, make sure you take plenty of notes. Bring a pad and pen along. Use them.

* Look at everything you do as if you were the owner of your business. Not a stockholder, which I hope you already are. The owner. And here's how owners think of every dime their business spends: "That's one more dime of my money going out the door." I can say this from experience. When you own 100% of a company, as I did, then every dollar that comes in is yours. Spending money hurts.

* ...But investing money is awesome! Savvy business owners may shudder at the thought of buying a ream of paper for $10, but if an additional $10,000 in salary is what it takes to woo a talented sales pro from her current employer, we're happy to pay it! We see the first as an expense and the second as an investment, a way to bring in even more money. Woo-hoo!

* Put some white space on your calendar, and honor it. White space means no appointments, no email, no phone calls. White space is your time to walk around and talk to people, sans agenda. Just talk. It means read a book, or a magazine. It means take a walk in the parking lot. Respect your white space above all else. This is where your truly great breakthroughs will come - when you aren't looking for them!

In all you do, try to clear the business-cobwebs from your eyes, and see your company from a fresh perspective. It isn't just a nice idea - it's essential to the prosperity of your company, and your career!

Metrics That Matter

2011-02-14T16:27:00.000-08:00

Kicking off Guest-Post Tuesday is Tristan Bishop (@KnowledgeBishop), one of my favorite experts in the fields of leadership, corporate culture, and customer service. He is a true 21st-Century Business leader!

Tristan drives teams toward efficient delivery of effective content. From early days defining the Knowledge Management vision for the first online bank (Wells Fargo) to his current digital strategy role at the world's leading security company (Symantec), Tristan has consistently increased customer access to key content. By integrating technical publishing best practices with web delivery innovation, Tristan forges solutions that optimize customer experience, improving the corporate/customer relationship.

The paramedics burst through the ER door, wheeling a man on a collapsible gurney. The triage nurse quickly moved in front of them and asked, "How long are his fingernails?" "His FINGERNAILS?" gasped the medic, "We got his temperature, pulse, blood pressure and heart rate?" The triage worker shook his head, "We've GOT to measure the fingernails! Just LOOK at these babies: Longest we've had this year."

I offer this ludicrous fictional anecdote only to illustrate a point: Some organizations obsess over absurd metrics. In business, as in healthcare, some measurements matter MUCH more than others. Many of the things we study don't truly reveal the health of our organizations.

I've had a chance to contribute to a number of corporate functions over the years. Along the way, I've seen a variety of metrics claim more mind-share than they merit:

• Within Marketing, I've seen leaders more interested in "direct mail % response rates" than in the actual revenue created by the campaign.
• Within Customer Service, I've seen center managers more interested in lowering Average Handle Time (AHT) than in increasing customer satisfaction.
• Within in Documentation, I've seen managers attempt to determine team "productivity" by tracking "words written, per writer, per day."

For a number of reasons, each metric mattered to the manager in question. But I assert that the most valuable metrics are those that assess attitudes. With the big-picture in mind, I want to offer three metrics: One that matters, another that matters MORE and a third that matters MOST:

Matters: Earnings Per Share (EPS) is a crucial metric for any publicly traded company. In plain language, EPS answers "How much profit did we create for our stock holders in the past three months?" Obviously, this is important. That said, if EPS is the main goal, a brand will OVER-Focus on cost-containment. They will "control costs at ALL costs." Loyalty is built over MANY calendar quarters and, therefore, MUST be measured with a longer view.

Matters MORE: Net Promoter Score (NPS) is a customer loyalty measurement methodology that has gained traction in recent years. NPS is based on a single question a brand asks current customers: "On a scale of 0-10, how likely are you to recommend us to a friend or colleague?" While NPS is hotly debated, due to it's simplicity, there are compelling correlations between "recommendibility" and revenue growth. For example, in key industries (Insurance, Airline, Cellular)
the brand with the highest Net Promoter Score claimed recent profits, even as competitors lost profound amounts of money.

Matters MOST: Employee Net Promoter Score (ENPS) takes NPS methodology and uses it to assess employee engagement. ENPS adoption is growing among thought-leaders. In 2010, extensive surveys were conducted on how likely employees are to recommend their products to friends and family or to encourage others to take a job alongside them. According to Vovoci, there is a direct correlation between employee loyalty and customer loyalty. Consider this quote from Walker Information: "Loyal employees have a positive impact on customer loyalty and retention: 92% of loyal employees do tasks for customers "above and beyond the call of duty." Only 54% of trapped and high risk employees do so."

The corporate world seems to have gone "Penny Wise, Pound Foolish." Speak some sense back into your plans. Going forward, the most valuable commodity will likely be LOYALTY. And, when viewed through the lens of loyalty, metrics that once motivated now matter less than ever.

We have a new opportunity to focus on better metrics: Metrics that strongly correlate to renewal and retention. So I say this: Start with employee loyalty. Let this drive customer loyalty. Let customer loyalty drive revenue.

I suggest that you have to go from ENPS to NPS to EPS. I'm thinking it doesn't work the other way around.

My Follow-Back Policy

2011-02-14T04:42:00.000-08:00

It's Social Media Monday again, and that means it's time for another short post on one aspect of - you guessed it! - Social Media.

This week I'm going to share the policy I've been following since my first Tweet in April 2009. It works well for me. You can adopt this policy for yourself or not, as you wish.

Ready? It's really straightforward.

I follow everyone back on Twitter. (Just about).

There, that's my policy. Here's why:

1. For whatever odd reason, Twitter limits how many people a person follows. If you follow a bunch of "celebrities" and news outlets that don't follow you back, you'll hit a wall at 2,000 where you find you can't follow anyone else. And even if your follow-followee ratio is close enough that Twitter lets you slip past this stupid, arbitrary wall of 2,000, you still have to stay within a close ratio to continue following more people. So any time you don't follow someone back, you're limiting who else they can follow. That's not nice. Be nice.

2. The friend who introduced me to Twitter explained that automatically following back is the ethic of the medium. It's what you do, he said. A lot of us still act that way, and so this rule has served me well in making some really cool friends and acquaintances along the way.

3. In this way, Twitter is pretty much the opposite of Facebook and LinkedIn, where everyone's always asking, "Do I know you?" This open, "We're all friends here" culture really works for me. I'm friendly in real life - I'm like a Labrador Retriever - and Twitter lets me be friendly online as well.

4. Much more importantly (to me), here's why I follow everyone back: I'm not more important than my followers. Indeed, I'm grateful every single time a person complements me by following me. It's their way of saying, "Hi Ted! I want to get to know you better." For me to snub their kindness would be ungracious - and if I were ungracious, I couldn't look my Mother in the eye. [I'm on a lifelong crusade against arrogance. We'll leave it at that.]

5. On that last point, following back is consistent with my status as a customer service author and leader. How on earth can I tell people to provide Five-Star Customer Service, which is based entirely on manners, when I am impolite myself? So for me, it's an easy decision.

I know some of you will find these to be strong words, especially that last part. Let me repeat: this is MY follow-back policy. These are my reasons. You may have perfectly legitimate reasons for not observing my practices, and I'm sure they work for you.

Now, it's time for the caveats:

6. When I follow a new person, I typically give them a week, maybe two, to follow me back. If they don't choose to, that perfectly fine. But at that point I unfollow them. I literally do not follow a single human who does not follow me as well - at least not for more than a week. No one is that important to me.

7. I use a client (Tweetdeck) to manage my Twitter stream. I basically ignore my "All Friends" feed. Instead I set up columns on Tweetdeck that search for key words, hashtags I enjoy, or for lists of special people - my core friends. I recommend you try something similar.

8. I regularly check in with Tweepi to manage my list, and to find new people to follow who share my interests, which are mostly business, leadership, social media, and customer service.

9. Tweepi is great. It lets me find and follow people with similar interests. You can see when they last tweeted, so you can only follow active Tweeters. You can unfollow accounts that are clearly spambots or that have become inactive. Poke around the site. There's a lot to learn.

10. One last thing: do I follow wack-jobs, which to me includes some members of fringe political and/or religious groups that offend me? Hmn. I'm always wrestling with this, but typically yes. I figure engagement is a great way to find common ground with those whose views are different from mine. Often, even if their beliefs in one area make me squirm, in many other respects we find all sorts of common ground. If they really, truly alienate me with their tweets, then yes, they're out. That's pretty rare, though.

Okay, that's this week's short (*ehem*) write-up of my follow-back policy for Twitter. I'm really interested in your comments. I know this one in particular is not universally agreed upon. Let me have it, if you feel so inclined. My favorite thing about Social Media in general is that I'm always learning.

Career Advice part 1: Risk

2011-02-13T05:00:00.000-08:00

I'm often asked for career advice. I take this very seriously, because each time, this is someone's life we're talking about. Giving the wrong advice could mess someone up for years.

So, before we even get into it, let me share this disclaimer:

***Do what I say, not what I've done (or continue to do).***

Sounds a bit backwards, huh? Sure. But let me explain: I have taken more career missteps since college than most ten people will ever take. Oops! I'm like a career crash test dummy. Learn from my mistakes, please!

All right. With my disclaimer clearly in your head as you continue, here goes nothin':

1. Weigh your tolerance for risk.

I put this first on purpose, because everything else you do hinges on this one issue, and no one knows the answer but you. How much economic uncertainty can you stomach? Personally, I hate being broke. Hate it. But quite a few times I've literally been without money to pay the electric bill or even to gas up the car because I have this penchant for taking the main chance, for betting it all on one more roll of the dice.

To me, the risk of being financially middle class for life is much more distasteful than the risk of being dirt poor for a short time before I build a fortune. Key words: To me. This is one aspect of my personality that leads me toward entrepreneurialism. By far, most people are not cut out to run their own companies, and this is one big reason why.

Can you stomach losing it all? Only you can answer that one.

2. Weigh your situation's tolerance for risk.

Are you a kid just out of college, who can move back in with Mom and Dad for a while if things don't work out? If so, you can probably afford to make some mistakes and gamble on your future a bit. Are you a bread-winner with kids to care for, a mortgage, car payments, and all that other good stuff? Do you have employees to look out for, too? Only you can decide what's best for you and yours, but I urge you to think twice before betting the farm.

I'm a Dad now, and the sole breadwinner in our family. My situation is not the same as it was ten years ago. I'm in a different place in my life. How about you?

3. Weigh your spouse's tolerance for risk.

Two things lead to more divorce than anything else: (a) one or both people are selfish jerks, and the couple shouldn't be together anyway, or (b) financial stress. Never mind (a), but (b) is something you have to take sober-minded stock in before you proceed. In all seriousness, you may have to decide between your spouse and a risky career move. Don't kid yourself on this. I don't know which is more important for you. Only you know that.

Taking me as an example again, I decided one hell of a long time ago that Jane is more important to me than anything else in this world. The thing is, she is one of the most risk-averse people I've ever met. If we weren't so in love, we wouldn't be together still - I took risks with our business and my career than she just didn't deserve. So eventually we had it out, and I'm more careful now. No more betting the entire farm.

...Which doesn't mean no more adventure for me - far from it! I just have to be careful that we have a safety net. I'm more of a grown-up now, and it's a good thing. Jane isn't slowing me down at all, she's just inspired me to direct my energies differently than ten years ago, when we both worked and had no kids and lower bills.

These three considerations, all centered around risk (and of course opportunity), are not the full story, but I don't want to overwhelm you right now. In a future post we'll talk about career moves, including what you should do when you're hot to trot in a company that's not.

Tell me what you think so far? After all, this is just one man's advice.

Want to be a leader? Lead!

2011-02-08T15:09:00.000-08:00

The neighborhood bully was picking on my girls not long ago. They told me, and the next time I saw him I called him over to my yard.

"Nobody hurts my family," I explained to this third-grade wretch. "Nobody." I was calm, but I was stern. He got the point, and he has been nothing but pleasant ever since.

My nephew was picking on his sister a few years ago. "You insult my family," I explained to him, "you're insulting me." I was calm but stern. He hasn't insulted her (in my presence) once since. I've even witnessed him use that same line to stick up for his sister to his friends.

Now, this is what a friend's boss told her today when she was making her case as to why she deserved the bonus she had worked for all year. She had to present her case to him before he took it to upper management for appeal.

"You're being too emotional."

Really? About a bonus worth 1/4 of her annual pay. A bonus that he knew she had earmarked for downpayment on a home.

This is my thought: manager, you need to be more emotional.

Sure, sometimes a leader has to reprimand his people; sometimes he even has to fire them. But that's another conversation entirely.

When a member of your team needs you to stick up for her, to defend her from the company, do it! Do it with zeal, with relish, with gusto; hopefully with finesse and persuasion as well.

But more than anything else, make certain you do it with feeling!

They're your team. They're your people. Go to bat for them. Put it on the line for them. Make sure upper management knows that if they mess with your people, they're messing with you.

Make sure it's perfectly clear that nobody messes with your people.

Nobody.

Any questions?

Introducing Social Media Monday!

2011-02-06T12:52:00.001-08:00

Happy Monday! Starting today, I'm going to put the 21st-Century Business blog on a schedule. Every Monday, I'll share a short post about one aspect of Social Media. A how-to for folks who don't live and breathe it like I do because, well, they probably have a life (Me? Not so much, really.)

Today's topic: How to participate in a Twitter chat.

1. All week long, you can see folks including things in their tweets that look like this: #custserv, #tchat, #leadershipchat, and of course the ultra-popular #justinbeiberisadreamcake.

2. Okay, I may have made that last one up. But the first 3 are chats I actually recommend.

3. Like I said, they go on all week - these things, called hashtags, are ways for folks with like interests to find each other amid the 170 million tweets zipping around the twittosphere each minute.

4. So the hashtags are typically used all week long, but once a week, usually for an hour each chat, people converge on the hashtag to have an in-depth conversation.

5. If you want to participate, or even just observe, it's as easy as monitoring the hashtag at the time of the chat. These are open forums, so you're automatically invited. Congratulations!

6. Don't forget to tag your tweets with the hashtag if you want the group to pick up what you're saying.

Let's flesh this out with an example. We'll take my favorite chat, #custserv, which is held 9-10 Eastern Time every Tuesday night. The general topic is customer service, but each week we have a specific aspect of service we discuss.

The chat is a remarkable mixture of authors, business leaders, front-line practitioners, and even some people who just care about treating others right. For an hour each week, hundreds of us converge on the hashtag and share important ideas - it's more fun than a barrel of monkeys, and it's open to everyone.

Of course, for chatty-Kathys like me, followers can get a little overwhelmed with all our tweets that hour. that's why I highly recommend you at least send out a disclaimer about heavy activity to your followers before, and probably a few times during, the chat.

Well, clearly this wasn't short, as I'd intended. Was it useful at all? Please let me know - and tune in next Monday, when I share another Social Media Monday tip.

Why Winning Is Only The Beginning

2011-02-02T11:34:00.000-08:00

Being A Champion Isn’t The End Of Your Work, It’s Just Kicking Things Off

By Ted Coiné & Lou Imbriano

Lou Imbriano is currently the CEO at TrinityOne Sports and a Professor of Sports Marketing at Boston College. He is the former CMO of the New England Patriots & COO of the NE Revolution. Lou speaks regularly to corporations, organizations and universities and he writes the blog Relationship Architecture.

In team sports, it’s often believed that with the right talent, right coaching and a solid plan, victory should come easy. The recent demise of the New England Patriots has shown us that this is not entirely true. The Patriots were a 14–2 team going into the playoffs as the number one seed with home field advantage throughout the post season (or until they lost). They received a bye week, for extra time to plan, and they were clearly peaking in December at the close of the regular season. The Patriots had a team that had performed at the highest level all season long, a leader with a proven track record, and a knack for winning (especially in crunch time). So what went wrong for the Patriots? If there are no guarantees for a championship team like Brady and Belichick, and they can’t win by just showing up, what does that tell us for proven businesses with exceptional leadership?

You can’t just show up. Regardless of how much success you have encountered over the course of time and in multiple endeavors, each situation is unique to the varying surrounding circumstances. What propelled you to the success you enjoy today is never good enough to provide the victories of tomorrow. So with each new campaign and challenge, you must not rely solely on the experience that you have obtained, but also have a clear understanding of all the support and pitfalls that come with new attempts in new times. Your experience is a great foundation, but success doesn’t stop there. Great organizations are always evolving to what makes business sense for today.

Think of the IBM of the 1970s and the IBM of today. In the interim period, that company (one of the most successful in history!) almost ceased to exist. Why? Because the business model that got IBM to number one earlier last century, and kept it there for decades, ceased functioning, and for a time, top leadership failed to see it or act on it. The business world had changed, and IBM had not. Apple, likewise, was sliding into irrelevancy before Steve Jobs' triumphant return to the helm, which infused the brand with the zeitgeist of innovation and disruption that makes it an icon today. HP stumbled and nearly fell to disaster in the ‘90’s and is still feeling its way out. GM, which two years ago was very close to dissolution, is stronger now than it has been in decades. Ford is doing even better than GM after a four-year complete renovation of its brand, culture, and engineering.

Right before our eyes, we can watch this struggle unfold at Google, which appeared to tack from impetuous upstart to staid bureaucrat. It is tacking again right now, its recent shake-up at the top is an indication that leadership recognizes and means to correct its move toward stasis, and is doing everything within its power to be brash and experimental again.

What gets a sports team, or a company, to the pinnacle of success is unquenchable thirst for victory coupled with a culture that breathes innovation-on-the-fly. Only with these two traits can organizations in any field harness what Schumpeter* termed the perennial gale of creative destruction. The alternative to sailing with that gale is to fight it and be destroyed. In business or in sports, there is no such thing as a lull, no "being there" or having "made it." The moment an organization stops struggling, stops reinventing, stops being scared, it starts losing.

The two of us have never written a collaborative blog post prior to this attempt. Our combined passion for the New England Patriots and constantly striving to become better business leaders led us to explore the concept of writing a joint post. Just because we never had done it before, doesn’t mean it’s wrong or a bad way to approach a post. The fact of the matter is that there are many ways to achieve your goals and to become a champion. When you stop searching for new ways to do great things, that is when you are doomed to failure.

No aspect of your business or life should ever be viewed as complete. Approaching it as an ever-evolving process to achieve excellence is not only smart, it’s how you, too, will become a champion. Success is not a destination; it is how you adapt to the circumstances around you to continually achieve great things. The Patriots, IBM and HP all know this to be true. What got you to where you are today is not good enough to get you to where you need to be tomorrow.

* Schumpeter was a well known economist and political scientist, who popularized the term "creative destruction" in economics.

Corporate Culture as Antidote to Contact Center Attrition

2011-01-28T06:38:00.000-08:00

If you've ever visited this blog before, you're likely familiar with my obsession: corporate culture, established and nurtured by leadership that "gets it." And as it turns out, I'm not completely alone. While most businesspeople are a little slow off the mark embracing a 21st-Century style of leadership, there are a few who are already blazing a trail for the rest of us to follow.

Below is a terrific example from author Guy Winch, a friend I made via Twitter who, like me, is obsessed with how companies can get it right and loves to share how a few of them do.

Floored. That's all I can say about how the article below leaves me. You will be, too. Enjoy Guy's post, and then enjoy his book! I can't wait to get my copy.

Contact centers wage a constant battle against high attrition rates and poor job satisfaction, factors that dramatically affect their ability to provide excellent customer service. Attrition rates of 50% in the USA (and even higher in other countries) are endemic to the industry for numerous reasons; employees’ are monitored electronically and constantly, they must adhere to rigid rules and quotas, and they face regular encounters with hostile customers.

The attrition problem is even more profound in outsourced contact centers whose training is dictated (and limited) by the companies they service. Outsourcing contact centers that want to improve employee satisfaction and lower attrition rates can change only the one ‘unscripted’ variable in their control—their own corporate culture.

One shining example of this approach is Call Yachol (CY), an Israeli call center that does outsourcing for companies such as a leading Israeli telecommunication company and a major Israeli bank. CY has annual attrition rates of 20%, which are far below industry standards. What makes CY even more remarkable is the vast majority of their nearly 200 employees are people with significant physical and mental disabilities such as cerebral palsy, severe visual impairment, PTSD, amputees and many others.

CY’s founder and CEO, both of whom spent many years in the contact-center industry before

opening CY (which is now in its 4th year), have developed an innovative and dramatically effective corporate culture and managerial philosophy: They care about their employees! More importantly, their employees know it.

I visited CY while doing research for The Squeaky Wheel and was immediately struck by the supportive yet extremely professional atmosphere, an incredibly difficult balance for any company to achieve. I watched as the company CEO arrived at work and made his way to his office through a labyrinth of busy cubicles while stopping to greet every single employee he passed along the way.

The caring the CEO conveys by doing so costs the company little yet pays huge dividends in employee performance as it provides the employees a psychological armor with which they can better manage the stresses of their jobs.

CY’s low attrition rates have allowed them to cultivate a more experienced and knowledgeable staff that elevates the level of customer service they provide, a win-win-win (company-employees-customers) for all involved.

CY’s corporate culture of caring is apparent in their managerial training and especially in their long term goals as CY’s hopes to revolutionize the employment of people with disabilities. Their success serves as a double proof of concept; that people with disabilities can compete in the free market if given the chance to do so and that corporate culture alone can turn what seems like an impossible challenge into a thriving business.

Further information about CY’s management training and corporate culture can be found in Chapter 7 of The Squeaky Wheel(2011, Walker and Company) or at the company website: callyachol.co.il (English tab).

2011 Guy Winch Ph.D.

Guy Winch Ph.D.

The Squeaky Wheel (Amazon)
http://www.guywinch.com
http://twitter.com/GuyWinch

By the way: Ever wonder if Tony Hseih of Zappos is really as remarkable a CEO as everyone would have you believe? If so, you've got to read this post from Guy's blog!

The Next Great Extinction Event

2011-01-21T09:04:00.000-08:00

Change typically percolates for a long while in the distance somewhere, then sidles into the periphery of the mainstream but doesn't catch on all that fast, and then, eventually, what was "change" a while back starts to gain steam and become accepted. In other words, change is often slow, as most processes are.

Except when it's sudden.

Sudden change is called an extinction event. Think of the dinosaurs. 65 million years ago, they were everywhere, these lumbering beasts that ruled the land, the sea, and even the air. 64,199,000 years ago (give or take), all we had left were some lizards, some little birds, and a few gators, their cousins. There was nothing gradual or gentle about the end of the dinosaurs at all. They were here, and then an asteroid* smacked into the earth, and then they were gone. Just like that.

Extinction events aren't that common, but when they occur, they're scary and exciting, all at once. They're unrelenting. And nothing is the same after the event. Nothing.

Social Media is an asteroid. It has struck the earth. 20th-Century businesses... those are the dinosaurs of our time. And their time has come.

The business climate is changing at such a pace that few people can even recognize it yet. Say the words social media, and most people will reply, "Oh yeah, Facebook," without a second thought, followed by, "So what?"

So what? Here and in future posts, I will tell you so what. I've been playing with and studying this dramatic trend closely for two years now, and it's much bigger than I originally realized. To begin:

1. Customers aren't just getting empowered; they now have all the power - and they have only begun to flex it. When a company screws up, they tweet and post and broadcast it throughout their networks in seconds. Within hours, the offending company has a huge, very public black eye that wipes away the effects of millions of dollars of paid advertising.

2. Out of necessity, companies are changing to actually be better, not just seem better. This transformation seems like a glacial event for those of us caught up in it, but just a few years from now, mark my words, we'll look back and the social revolution will astound. "How did companies ever get away with their 20th-Century shenanigans?" we'll ask ourselves. "Why did we ever put up with that?"

3. Recruiting talent is going to transform right before our eyes, as if by magic. For all time, employers have promised the world to new recruits and often delivered very much less once new-hire training lets out. No longer. Though slow emerging from the freeze of the Great Recession, people are once again on the hunt for better situations - and they're relying on their social networks to find out the truth about potential employers. Like it or not, management will have to become more enlightened just to stay in business.

4. One important aspect of this is that management will have to ease its grip on the reins of power. Before this brave new century, information was power. Now, information is ubiquitous. Savvy companies are already using the full brain-power of their staff, solving business issues with social collaboration tools that bring a competitive advantage that old school, command-and-control organizations simply can't compete with. In order to stay alive, firms will have to embrace social for the human talent it unleashes.

These are just a few of the ways social media is already transforming the global economy for the better. Short of the eradication of the Internet (and of electricity?), there's no going back. Dinosaurs, you've only got a short window left to evolve, or it's all over for you.

Your comments, below or via Twitter, are always immensely valuable to me as I continue to develop my thoughts in this direction.

*****

Read Three Trends, One Direction for an earlier post on this topic.

*Asteroid? Disease? Whatever the cause, something killed those big beasts.

Equality, Even If Just for Selfish Reasons

2011-01-17T09:56:00.000-08:00

"Injustice anywhere is a threat to justice everywhere." - Dr. Martin Luther King, Jr.

I am a business writer, not a social philosopher. I'm aware you can easily find dozens of outstanding, enlightening essays on this day, in which the United States of America celebrates the life of one of its greatest leaders, the writer, preacher, Nobel Laureate, and conscience of a nation, Dr. Martin Luther King, Junior. I wouldn't pretend to write as masterfully as some of those essays.

But I would like you know that I am taking today off from work, out of respect for the man whose death came just a year after my birth. A man who peacefully railed against out our nation's deepest injustice and thus allowed us to shed it and become better as a people. America is a more moral place because of the life of this mahatma, this great soul.

And I would like to share an idea that the rest of the essayists will not likely mention today: any society that forcibly holds down one portion of its population sets itself at a severe disadvantage. To oppress a minority is to harm the entire society. Morally, yes, absolutely. But also merely in sheer economic terms - which is to say that even the meanest-spirited of leaders should actively work toward equal opportunity for all; yes, for purely selfish national interests.

When women are denied education or employment, that society is removing one-half of its population from helping elevate the economy. It's like fighting with one arm tied tightly behind one's back: who could possibly win such a fight? Oppressing a religious or ethnic or racial minority (or even a majority), as many societies still do today: it's a losing proposition.

This is not an appeal to our better angels, and so I suppose not very worthy of such an important day. But a lot of this blog is an effort to show how doing the right thing pays. Here is yet another example, in my argument against prejudice and oppression.

It isn't savvy to hold others down. It's foolish. And who would choose to be a fool?

Fear Kills Yet Again

2011-01-16T06:28:00.000-08:00

CEOs: what would you do if you learned that one of your staff is a tyrant, a leader who instills so much fear in his reports that they refuse to even suggest new ideas for discussion?

*****

So I'm meeting with an operations executive who is only one removed from the CEO of an Enterprise-sized company. They're on a first-name basis (we'll call the CEO John), and said exec. has regular access to the big guy.

While this company is doing well, I was invited to this particular meeting because the company is clear that it can do better. As you can imagine, I'm present to give some advice.

Prospering company wants to up its game. So far so good.

Our conversation leads to the sales organization. The exec says this:

"I've been in operations for years. Variable compensation for our sales force is always our biggest headache. We spend much more time on it than on anything else."

"Why is that?" ask I.

"No matter what we do, the sales reps and their managers figure a way to game the system. So we tweak it, and fiddle with it, and sometimes drastically change it so we can stay a step ahead."

Just to be clear, I say, "So you create incentive pay schemes to inspire your sales force to sell more, and instead a lot of what they do is monkey with the scheme. If I hear you right, they're putting a lot of effort into maximizing their pay at the company's expense, rather than maximizing their sales as you intended."

"Exactly," he confirms. "Which means that we have to go back and close the loopholes they've found, and then they end up finding new ones."

There's nothing new about this at all, as I'm sure you appreciate if you've either been in sales or helped lead a company. So we discussed his very-common predicament, and I brought up Daniel Pink's book, "Drive," which lays out quite nicely the way some companies have embraced the notion that people - even sales people(!) - do not work primarily for money, and so there are much more effective ways to inspire them to perform than through incentive pay.

"Oh, that's a great book," he agrees. "Really terrific."

We discuss some of the finer points and examples at length. It's clear he's read it thoroughly, even discussed it in detail with his co-leaders.

"Have you considered moving from commission pay altogether," I ask, "and trying something possibly more effective to get your sales force to perform the way you tell me you'd like them to?"

He blanches. I swear to God, this grown executive's face loses color at my question!

"If I suggested to John that we take incentive pay away from our sales force, he'd can my ass in a heartbeat!" he told me. "And he should!"

STOP RIGHT THERE!!

This post isn't about incentive pay as a motivating force behind driving desired behavior at work. This post is about fear at work. Specifically, the fear of a top executive to even mention an idea to his CEO that he honestly thinks might work. Remember, he'd told me that himself; we had discussed Pink's book in detail, and he agreed with it.

Leaders, is this you? Are you John, the CEO of this mammoth company? Do you pay your executives hundreds of thousands of dollars a year to help you run your company, then instill in them such a fear of your disapproval that they're unwilling to even suggest new ideas?

The Twentieth Century is over. Fear is just plain inefficient. One leader cannot have all the right answers - and if he does, why does he bother to employ intelligent, experienced, competent adults to help him run his business?

I hope you agree that this company is in trouble. And I don't blame the executive at all, not even one iota.

The fish stinks from the head, as the Jewish saying goes. CEOs, if your company stinks... you are the head. You are the problem. Unfortunately, I don't see much this CEO can do short of firing himself - and I'm not too optimistic about that.

It's a new century, my friends. To compete, we've all got to start obeying a new set of rules. Removing the cause of fear is paramount among them.

Only Three Things Matter

2011-01-14T03:25:00.000-08:00

"Running a Fortune 50 company is like steering a tanker ship at sea. All a CEO can do is guide his company culture. The culture does the actual sailing." - Bill, retired CEO of a Fortune 10 company.

In valuing real estate, the old saw goes, only three things matter: location, location, location.

In business there are only three things as well: culture, culture, culture.

Every organization has a culture, a way that things are done. This is passed along to new members primarily through the retelling of exemplary stories, as I wrote here: Stories Build Culture.

Some cultures are weak, with a lot of differentiation in how things are done. One branch or division may be driven and competitive, another a miserable slave-ship, a third an upbeat but unfocused place to work. At one location, innovation may be the life-blood uniting the entire group, while at another within the same company (possibly even on a different floor of the same building!), the workforce is just keeping its collective head down and putting in its time till the bell rings at five o'clock.

Don't confuse weak culture with diversity, because it's anything but - they're completely unrelated. Weak culture means that the company is unfocused and poorly-led. Weak cultures founder and get acquired at bargain-basement prices. They churn not just workers but leaders. Weak cultures are slow-motion train wrecks.

Strong cultures, on the other hand, are typically incredibly profitable. They're also much more likely to be iconic. Disney has a strong culture. Nordstrom. 3M. GE. Apple and Cisco both have very strong, though quite different, cultures. Microsoft and Google have powerful cultures - yes, I chose these two bitter rivals on purpose, to illustrate a key point: that not all winning cultures are alike. Indeed, far from it!

CEOs, your job is to craft and guide culture. That's it! "Vision" is great, too - you've got to know where you're going, and you've got to share that with your staff so they can help you get there. Duh! But then what? Seriously. You see the future. You plot a course. And...?

...And for the next 3 or 5 or 20 years, you have to get to that Utopian vision you've dreamed of, that goal you've set for your company. Getting from the thoughts in your head today to the cover of Fast Company next year and Business Week in five: that's what a strong, healthy culture will do for you!

If you want to attract top talent on a consistent basis across your entire organization, you're smart. How are you going to win the Superbowl with a team you recruited from St. Mary's School for the Lame? A winning culture will attract the talent you need.

How do you build a winning culture? Focus on the culture. A CEO who focuses her attention on cost-reduction or building plans or next year's investors' presentation is not doing CEO-work.

But don't take it from me. Ask one of the hottest (and unlikeliest?) leaders going, the (un)Celebrity Tony Hsieh, CEO of Zappos. During the Great Recession he sold his 10-year-old online retail company to Amazon for a billion dollars, maintaining full control all the while. How'd he do it? He didn't. He let his company's culture do it for him. All Tony did was build and maintain and refine that culture.

Don't believe me? Read his book, "Delivering Happiness." He'll tell you himself.

Talent Magnet: Catching Up

2011-01-10T03:40:00.000-08:00

CEOs: Do you want to turn your company into a most-desirable employer, so that you can truly attract top talent and the competitive advantages it brings? You've come to the right place!

We're in the middle of a series on that very topic. Following are links to the posts I've written so far on the subject. Two more are coming this week. But for today, best to catch up to the conversation.

Build a Talent Magnet

Don't Get Stuck with the Leftovers!

Don't Just Win. Crush.

Be Fair... Or Be Left Behind

Unfair Workplace? Here's Why

CEOs: You Don't Get a Vote

That's already more than the five posts I originally envisioned for this series, but your comments and tweets inspired a deeper dive on the vital subject of being Fair at work, so... hopefully, no one will object.

On our next post, we'll turn our attention to the (potentially) fun and exciting topic of creating a Winning Culture at work. See you soon!

CEOs: You Don't Get a Vote

2011-01-08T05:38:00.000-08:00

CEOs: do you truly want your company to be seen as Fair by your employees? Honestly?

If so, then you'll have to throw out one of the most cherished of 20th-Century values, the concept of tacit consent.

The Fallacy of Tacit Consent goes like this: "If a person does not agree with something, they'll speak up." At work, it plays out thus: "If employees are silent about management decisions, they obviously agree. Silence = buy-in."

I was raised on this ethic. My parents taught me that to agree or speak up were valid choices. To disagree but remain silent was not. My experience tells me that most leaders buy this logic. But as the term "fallacy" implies, the logic is faulty.

Here's the thing: how many of your employees are ready to quit or risk being fired right now, today? Especially in today's still-moribund job market?

...So what happens when leadership makes a decision that employees find unfair?

1. They can protest, and risk being fired, or at least being blacklisted for future promotion.

2. They can quit immediately.

3. They can update their resumes and leave when the time suits them.

4. They can remain on your payroll, but stop caring.

5. They can suck it up and go on as before, realizing "You win some, you lose some."

Your most valuable workers will choose one of the first four options, each of which means you will lose the very thing that gives your company its most essential competitive edge: your talent! Know who will opt for number five? With very few exceptions, it will be your leftovers, your least-valuable players.

Seriously - you're a leader, which means you're a winner, right? What would you do?

Take this scenario: you are promised a performance bonus. You perform. Your company comes up with a loophole to keep from paying you and others in your situation. This loophole has been right in the rules all along, so top management tells itself it's fair.

But you and the rest of the company - those directly affected and observers as well - know better. And now you realize that you can't rely on the company to pay out future performance bonuses, either. Incentive pay has become disincentive pay.

You're a winner. Which of the first four options do you choose? I can guarantee, you will not choose option 5. My guess is you're going to land on option 3: you'll leave as soon as it suits you. Am I close?

...But meanwhile, to your CEO and other top executives, the scenario looks much different. Because they lack the immediate feedback of eighty percent of their workforce walking out the day an unfair decision is announced, they miss their people's reactions. Because they are victims of groupthink,* they convince each other that everything is fine; that their decision was fair. Because they believe in the Fallacy of Tacit Consent, they think their reasoning for the unfair decision has been accepted by their workforce. The company will muddle on, hemorrhaging its most talented staff and accruing more and more leftovers all the while.

How can a 21st-Century leader get around this mess?

It's painfully simple, and it's incredibly hard. I don't expect many current leaders to follow this advice. Which is fine. Champions do what the masses find too arduous. I only want to help champions.

CEOs: the way to make sure your company is seen as Fair by its workers is to ask them.

And to shut the hell up. You don't get a vote. Your opinion is completely unimportant. You can no more convince your staff that you are indeed Fair than you can convince a person to change favorite colors. People have an innate sense of justice - it's part of being human. You can assuage your conscience with excuses, you can surround yourself with sycophants who tell you how beautiful your new clothes are (Mr. Emperor), but you with can't convince the rank and file who are running your company for you that you are being Fair when you are not.

*****

This is third in a three-part series on being Fair at work.

Part one is Be Fair... Or Be Left Behind.

Part two* is Unfair Workplace? Here's Why.

Please note: not everyone will agree, on any topic. It's impossible. But if you honestly try to lead a Fair company, and strive for continuous perfection, that's a pretty good start.

Unfair Workplace? Here's Why

2011-01-07T03:33:00.000-08:00

Wednesday's post on Fairness at work elicited a few great comments but a tremendous number of tweets about unfair management decisions. Clearly, I struck a nerve.

There are a lot of unfair bosses out there. Yikes!

It got me to thinking, as your comments, tweets, and emails always do. Are that many managers and executives really just plain bad? Is it the norm for leaders to screw over the led?

Maybe. I don't want to discount that possibility. But here's the thing: for years now, my clients have been leaders, mid- and upper-management in companies large and small. Now that I'm in my forties, quite a number of my childhood friends are now C-level leaders and vice presidents as well. Surely not all of these people are cynical enough to be actively unfair to their staffs. Truly, not even most.

There's a different reason so many companies make profoundly unfair decisions all the time. It's called groupthink.

The fundamentals of groupthink go like this:

* There has to be a very powerful leader, someone who holds all the decision-making power. A person at whose desk the buck clearly stops. A CEO, for instance.

* That person often has a powerful personality, one that others gravitate to and want to please.

* If that charisma is combined with the ability to fire, promote, and give bonuses, all the better for this perfect storm of bad decision-making.

* For groupthink to occur, the members of this advisory group are typically selected by the leader. In a groupthink scenario, that leader chooses subordinates who share his or her opinions and outlook to begin with. Sound familiar?

* Finally, the physical presence of the leader in all or most meetings serves to squelch debate. The leader's decisions are ratified, not scrutinized.

The most famous example of groupthink remains the Kennedy Administration's meetings leading up to the Bay of Pigs fiasco in Cuba. John Kennedy's cabinet operated precisely under the rules outlined above, and disaster struck. It was one of America's - and Cuba's - darkest hours in the Twentieth Century.

Kennedy and his staff learned from their mistake. They purposely did not repeat the groupthink blunder leading up to the Cuban Missile Crisis not long after. Debate in cabinet meetings was heated. Opinions varied widely. And most notably, President Kennedy absented himself from many of the cabinet meetings. He had learned the perils of groupthink, and took steps to avert it. The Cuban Missile Crisis was a stupendous success for American foreign policy. Indeed, how Kennedy handled it is as instructive and inspirational as his earlier blunder in Cuba was disgraceful.

Back to business; back to companies making unfair decisions.

I agree, there are some unscrupulous leaders out there, too short-sighted to realize that screwing over their own workforce will destroy their company more surely than any competition or Great Recession will ever do.

But there are many, many more leaders who think their decisions are perfectly fair because they are making those decisions with a team of like-minded reports: if not yes-men and -women, then certainly people chosen for their likeness to the CEO, rather than for their individuality.

I've had countless discussions with top leaders; it's more than my job as a leadership author, it's also my hobby. Most aren't actively evil. Most are just talking to themselves, when they need to talk to their people.

Tomorrow, in "You Don't Get a Vote," I'll share with you how 21st-Century leaders turn the groupthink tendency around - to the delight of their shareholders!

*****

This is part two of a three-part series on Fairness at work.

In a few days I'll return to my five-part series on attracting and keeping top talent at work (of which Fairness is arguably the most important part).

Be Fair. ...Or Be Left Behind.

2011-01-05T03:10:00.000-08:00

CEOs: want to attract and keep top talent? Not just keep that talent on the payroll, but keep it engaged and actually psyched for work? Your company has to be fair. And here's the thing: you and your direct reports don't get a vote in this. Your mid-level managers who have been drinking the company Kool-aide don't get a vote, either (and your front-line managers are likely too scared to vote honestly.) The only people whose opinion counts in this matter are your front-line employees.

* Do they see your company as fair?

* Does leadership have their best interests at heart?

* When the rules stink, does management disregard them in order to bring fairness back into play?

We could keep going and talk about customers and vendors and community - all very important if you want to run a fair company. But for today, let's stop and make sure we've covered the first and most important of management's constituents: the rank and file who are actually running your company.

Do they see your company as fair?

"Fair" is a tough word for a lot of leaders who made their way up in the 20th Century. Fair is squishy to business or accounting or engineering majors. I've spoken to a lot of folks who confuse "fair" with "the rules are the rules." That's nice, but... a little morally retarded. We can do better.

Sure, being Fair means treating everyone equally. I will never abide nepotism or its ugly sibling, favoritism. But there's more to Fair than that. Fair also means correcting clear injustice. It means that, when things go according to the rules and the outcome is clearly not what anyone would have chosen, that the same people who set the rules then step in and fix the rules.

Here's just one example of a million to give you something to sink your teeth into, cuz Lord knows we authors can get too theoretical if we aren't careful.

Management sets a number for sales, an annual quota, and says, "Surpass this number and you win a contest." Pretty standard stuff. Only this year, no one in the whole organization even comes close to that number.

Is it fair for management to say, "Well, the number's the number"? Is it fair for management to admit their number was too high, but there's always next year? Or to come back and say, "Wait a minute! If we'd set the number too low, and everyone had won the contest, who would be complaining then?!"

A key component of management's job is to protect employees from unintended, stupidly-unfair outcomes. I'm fairly certain they don't teach that in any course in most business schools, but they should.

If you want to attract and keep top talent, your people have to see the company as fair - and that means leadership has to step in and defend staff from its own unfortunate decisions from time to time. Otherwise, you might be "right," but you'll never be beloved.

...And if your employees don't love and adore your company, you've already shot yourself in the foot.

CEOs: Don't just be a leader. Be a champion - of your people!

*****

I love how The Nordstrom Code is phrased. Check it out:

Use good judgment at all times.

There will be no additional rules.

See what they did there? It isn't, "Use your best judgment." Your best judgment might suck. Use good judgment - which speaks to a higher, probably more objective, standard of quality.

This is a customer-facing guideline, directed at front-line employees. But today, let me urge you to use it throughout your organization. The higher up the corporate pyramid, the more important it is to let good judgment, rather than blind adherence to rules, guide your decision-making.

Don't Just Win. Crush.

2011-01-04T03:40:00.000-08:00

So you want to turn your company into a talent magnet?

If so, you're savvy. You realize that the best companies attract, keep, and continuously inspire the best people - and that everyone else gets the leftover people, and so the leftover results.

Yesterday we discussed pay as a threshold issue: "threshold" because generous pay is necessary, but not sufficient, to get top talent through the door and keep it long enough to make a difference.

Let's stop right here to think about that, shall we? As a once and future employer myself, I'd rather pay double the going rate for top talent than any amount for leftover staff who lack the skills and drive to make my company successful. In fact, when we ran our language school we did better than that: we paid more than triple the going rate for our part-time teachers, and were far more generous than the market required for our full-time staff as well. Far more. Our CFO wanted to hate it, but the results were impossible to argue with.

What results? We had our pick of the best teachers in the Boston area, which meant we crushed our competition in the results we delivered our clients and, thus, we kept winning business from our competition, while never once losing an existing client to our competition.

Sound like the type of results you'd like for your company? Don't just do as I say - talk is cheap, and nowhere cheaper than on the web. Do as I did, and as I will happily do again when I launch my next endeavor.

But as I said, pay is a threshold issue only. If you really want to Build a Talent Magnet, read the post by that name I wrote recently for the Achieved Strategies blog. Then come back tomorrow for part 3 of this series, when we discuss the role of fairness in business. (Hint: it's everything!)

Don't get stuck with the leftovers!

2011-01-03T10:22:00.000-08:00

I've read repeated reports over the last year or two that eighty percent of us - 80%! - don't like our current jobs.

The other day, a friend shared another as-yet-unverified statistic, that 84% of American workers plan on switching companies in 2011.

Employers: nervous yet? You should be. The economy is already showing some significant signs of recovery. Companies will be hiring over the next year - finally. Your top talent is already being wooed. Pretty soon, even your second-tier talent will find it has options.

If astronomical turnover won't be crippling enough, consider this: who will opt to stay? The leftovers, that's who. Is that really who you want operating your company? The leftovers?

In case you haven't noticed this about me, I am anything but the doom-and-gloom type. I'm a man of action, and I wouldn't give you a dire prediction if I didn't also supply you with a ready way to protect yourself against it.

This, then, is part one of a five-part series on how you can protect yourself from the curse of mediocrity.

Step one: realize that pay is a threshold issue for your staff.

* Pay me adequately for my needs, and I'll stay for a while. ...Until a better offer comes along.

* Pay me fairly, and I'll stay a bit longer. I'll also put more of myself into my work.

* Pay me more than I feel I can get elsewhere, and (all other things being equal) I'll stick around for a good long time. I might even feel appreciated.

* Pay me just a bit more than I feel I deserve, and - again, all other things being equal - I will be grateful! I'll do anything to prove you invested wisely.

Pay is a threshold issue because it starts the conversation: it gets employees over the threshold of working for you, or of staying with you. Talent will find its way to the highest bidder, and there isn't much you can do to fight that. Indeed, if you don't compete on wages, you're unlikely to even get a second look from the most talented workers out there.

And who can afford to employ any but the most talented workers in our competitive landscape?!?!

...But as I said, pay is only a threshold issue. We needed to discuss it, and get it out of the way, if we're ever going to get to the heart of how you'll be building your successful team.

That conversation begins next time, in part 2 of this series.

Not My Job Man

2010-12-30T03:23:00.000-08:00

CEOs: how do you feel when you overhear one of your people say this line?

"It's not my job."

You see red, don't you? Or how about when you hear a sales guy say,

"That's manufacturing's problem."

I've witnessed that last one a lot in my career. The attitude is, sales will sell it, and engineering will have to figure out how to fulfill their promises. Or marketing will promise it, and customer service will have to handle the cascades of disgruntled customers who have basically been lied to. Or the company will produce it, and the resellers, or dealers, or channel partners will have to field all the service complaints because the product is deeply flawed.

Am I hitting a nerve? Is this something you, as CEO, have dealt with? Or maybe, something you are dealing with now, or something you always deal with, and have since your first days on your first job decades ago?

Earlier, I posted on the tension I've noticed in just about every organization between Marketing and Sales. Basically, they are coming at the same task from two very different perspectives. They often don't respect each other. Worse, they typically see each other as vying for the same finite resources, including the CEO's time, attention, and high regard.

Yesterday, I suggested that the problem was with the corporate pyramid itself, rather than with Sales or with Marketing.

Here, finally, is my humble solution. Well, my radical solution. But it's not one I made up myself. W.L. Gore has been using it for decades, and they are a highly successful privately held company. My guess is you, Mr. or Ms CEO, would be lucky to have their financial or operational success at your own company.

The answer? Do away with titles. Eliminate roles, and areas of responsibility. Instead, institute this culture shift: One company, one goal, with everyone working toward it.

Think about any organization, and what do you have? The very highest-ranking leader is a generalist: she is responsible for every function of the company, every single one!

Then, right below her on the org chart, what happens? Speciality. There's a head of finance. A head of manufacturing. Someone else in charge of sales, and a different person in charge of marketing. You've got Bob heading up IT, and Wanda in charge of people or "human resources." Don the legal council keeps you out of jail. Juan the sourcing guy deals with all the vendor contracts. I could go on, but I think you probably see my point.

Something goes wrong at your main data center? Everyone blames Bob. "Not my problem," the rest think, with a combination of relief and disgust. "Geek," some mutter under their breath. "What do we pay this guy for?" mutter others.

Sales start to tank? All eyes turn to John, the Senior VP of sales. "Let's get on it!" the rest of the company brays - as if the quality of the product doesn't matter at all, as if fulfillment of orders in a timely manner isn't a consideration, as if wild promises made in advertising have no bearing, as if employee churn and poor morale have nothing at all to do with why customers are wising up and fleeing the company in droves!

"Not my job" is completely unacceptable when uttered by a front line worker. So why is it so prevalent in the C-suite?

Think Outside the Pyramid

2010-12-29T03:26:00.000-08:00

In an earlier post, I posed a question to my readers: How do we reconcile the seemingly inherent conflict between sales and marketing within an organization?

The replies were of the highest caliber, both in the comments section and in the tweets I received. They've helped me develop my thoughts further to solve this possibly intractable problem.

I'm not claiming to have a cure-all for the turf wars that plague just about every company out there. But I do have a suggestion, and it requires some "out-of-the-box" thinking - or as I prefer to call it in this case, "out-of-the-pyramid." The root of the problem, it seems to me, lies within the very nature of the corporate pyramid itself.

That's all I've got for you today. I just wanted to keep you thinking, and commenting, so that I can continue to develop my suggestion.

Please come back tomorrow for part 3 of this series. Or, subscribe to this blog, and the post will come to you.

Build a Talent Magnet!

2010-12-21T05:26:00.000-08:00

I am honored to be guest blogger on my friend Shawn Murphy's blog today. I hope you read my post there, but then explore the rest of Shawn's blog. This month, Shawn has invited a number of world-class leaders to share their thoughts on how business will change in 2011. He calls the theme Revive & Thrive. I've read each of the December posts, and they're phenomenal!

Writes Shawn,

Our Revive & Thrive in 2011 continues today with Ted Coiné and the topic of building a Talent Magnet. Pay attention leaders. Though the lesson is simple it’s one that can no longer elude managers as we recover from the Great Recession. The lesson is this: employees want to be a contribution and want work that is meaningful to them.

http://achievedstrategies.com/blog/build-a-talent-magnet/

Enjoy! - and please, leave a comment on Shawn's blog. Your thoughts help me develop my own.

On Marketing, Sales, Cats, & Dogs

2010-12-10T02:42:00.000-08:00

You don't have to be a business guru to pick up on one of the deepest tensions within most companies: Sales and Marketing rarely get along - and when they do, it's often grudgingly.

Is it because these two disciplines are coming at the same task from such different perspectives, one using science, the other art? Is it because they're insecure of their positions within the organization, like two siblings with an aloof, judgmental parent?

I've observed companies where the head of maketing, often the CMO, reports to the CEO. I've seen others where the head of sales does. I've seen orgs where sales reports to marketing, or marketing to sales. Rarely have I seen heads of both report directly in to the CEO as true peers.

Now, add to this mix head of corporate communications or public relations. Head of investor relations. Chief Customer Officer. If you think that last, CCO, is new and different, here's one that many companies have yet to even consider: Chief of Social Media or Social Networking.

All these folks can't report to the CEO! Seriously, they can't! One leader can only concentrate on so many ideas and projects until the very idea of "concentration" flies right out the window. Aside from all these disciplines, there are the old standbys to consider, such as manufacturing, R&D, supply chain, people (or "human resources" or "personnel" in 20th-Century parlance), IT, finance, legal, and on and on....

No wonder sales and marketing can't get along! They get, intuitively, that the Big Cheese simply lacks the bandwidth to focus on them both. And since their roles are ostensibly so redundant, well, who better to push out of the nest than your closest rival for attention and resources?

Marketing is a cat. Sales is a dog. Both look around and say, "This family doesn't need two pets. I'm all my master needs to feel fulfilled."

It's natural, and it's wrong. There is a profound problem here, much deeper than just making room at the table for two equally-useful disciplines. I have a solution in mind, but before I share it, I'm very interested to hear what you, my reader, has to say. This blog attracts an inordinate amount of attention from some very savvy minds in business, and I always learn a lot from the comments you leave. I don't want to influence your comments now.

So part two of this post is coming. But first, let's see what you experts have to say.

Experts? It's your turn. Fire away in the comments, please!

What would YOU do?

2010-11-28T09:08:00.000-08:00

There's no shortage of fascinating leaders in my little hometown of Naples, Florida. Indeed, I've heard it said that Naples is to CEOs what Beverly Hills is to movie stars, with more retired and current business leaders per capita than anywhere else on earth.

One more reason for a business author to love this place.

I've befriended quite a number of these folks, and it's always interesting to hear their stories. That goes double for my friend Phil. Phil deserves his own book, but... not today. Today, I just want to share a tale from his early career, from way back when Phil was only the third full-time employee of Capital Cities.

Phil was a workhorse, a child of the Great Depression with a family of his own to support. He was enterprising, filming his own productions on the side as he began his career with CapCities.

Phil's boss, Frank, knew talent when he saw it, and he wanted to harness Phil's energy, drive, and talent. It irked him a bit that Phil had his own projects after work - it meant that Frank wasn't getting all of this young man's talent.

Night after night, as Phil left the station at 5 on the dot to rush off to his own gigs, Frank would remark, "There goes the Hasta La Vista Production Company." It was all in good fun; just a word to let Phil know he was noticed and he'd be missed.

Phil continued demonstrating his value around the station each day, and the company was growing. So finally, Frank made a decision. He asked Phil into his office and said point-blank: "I want all of your energy, not just 9-5. No more Hasta La Vista Productions. If you commit to CapCities, I'm going to commit to you. You're going to help me run this place, and we're going to be huge. Never doubt that."

Frank let that settle in. Then he stuck out his hand, and Phil knew what it meant if he shook. He was committing to Frank and to CapCities.

Phil shook Frank's hand, and never looked back. Through the next three decades, CapCities flourished, until the day in 1985 that "the minnow ate the whale:" yes, little Capital Cities from the tiny backwater market of Albany, NY bought the entire ABC empire. Phil served as the President of ABC Entertainment until it was bought by Disney in 1996. He was the highest-paid executive in TV during his career, and his payout from the purchase was... well, I'm not allowed to share the amount, but it's an awful lot of money. An awful lot!

Here's where this story ties in with a post I wrote a short while ago.

1. Leaders, do you recognize talent among your staff when you see it? The kind of talent your company needs if it is going to swallow the whales of your industry at some point in the future?

2. When you do recognize said talent, do you have the mechanism in place to elevate them to positions of leadership commensurate to their abilities - and on a schedule that they can accept?

Your worth as a leader is tied directly, inextricably, to your answers to those two questions.

Make Your Company a H.I.T. (Video)

2010-11-27T14:39:00.000-08:00

My buddy Jose helped me set up a YouTube channel and showed me the ropes on editing a two-minute clip, just to get my feet wet in another medium.

Are your expectations set quite low enough yet? Okay, here's the tip of a future iceberg:

Make Your Company a H.I.T.

Tell me what you think!

The Third Way Out

2010-11-19T03:52:00.000-08:00

There is always a third way.

Say you're a manager, and the most productive member of your staff asks you to support her as she seeks a promotion.

* What is best for your company?

* What is best for this employee?

* What is best for you as team leader?

Let me simplify that last one for you: What is best for you as team leader right now, this quarter and next, trying to hit your numbers and run a successful team?

I think we all know the answer to these questions. You don't want to lose her. Doing so will make your job harder. You'll have an opening where before you had a star. You'll have to go through the arduous process of recruiting, hiring, and training - even if you replace this star with an even more talented performer in the long run, right now and for the next 6-18 months, you'll be operating at a talent deficit as that person ramps up.

So here's what you can do:

* Say yes, and take your lumps in order to support your company and your staffer. Long term this will reflect very well upon you and help you in your own career, I'm certain. Short term, you're in for some pain.

* Say no, and sit on this person as long as you can. In the short term, your numbers and your own job performance will continue to thrive.

Those are the options most managers will see. Yes or no. We live in a binary world. Next topic.

...Only here's the thing. Your employee has options as well. Here are her choices when you say no to her request for support.

* Take her lumps and bide her time until a future date, when you do support her move.

* Seek a lateral move within your company, so that she can get out from under a boss who's holding her back against her best interests.

* Update her resume and start looking for a new employer where she can exercise the skills she has sharpened since joining your team. And remember, it isn't 2009 anymore. The job market is warming up - in some sectors, it has already heated up considerably.

One more consideration, and this is the most important to me anyway: Manager, what will your boss think of all this? Or her boss? Or the CEO?

Remember my earlier question, What is best for your company? That is where the CEO is coming from. And let me tell you something. If your CEO is half as savvy as he needs to be to keep his job, he isn't going to look with favor upon one of his managers keeping his top talent from rising to serve the company more effectively.

Just sayin.

As always, your comments are vital to me as I continue to develop my own thoughts on this topic.

When Events Trump Commentary

2010-11-18T03:00:00.000-08:00

I love to hate this story. You will, too:

Ryanair crew locks toilets, shuts off lights, leaves passengers on runway in the wrong country ...and maybe they had it coming (at least in a way).

http://www.christophevanbael.com/ryanair-crew-locks-toilets-turns-out-lights-and-leaves-plane-as-passengers-stage-sit-in/

The True Test of a Leader

2010-11-16T04:19:00.001-08:00

The number one test of a leader is, can he recognize talent hiding right in front of him?

The second test: what does he do about it?

Finding raw or slumbering talent, elevating it; harnessing it: that is the true test of a leader.

How are you doing as a leader?

*****

Coming soon - the story of one such slumbering talent, and how he helped create one of the most successful companies of the past sixty years.

CEOs: Are You A Dodo?

2010-11-12T02:51:00.000-08:00

To all my CEO friends out there, present and future:

Dodo birds are extinct, and for a very good reason. They failed to change with their environment. Don't be a dodo.

Click this link to read a fantastic article from Harvard Business Review on the perils that business leaders face when they don't have a strategy to manage their own personal social media presence.

Leaders, try to keep this in mind: if you don't have any use for Social Media at present, that doesn't mean that Social doesn't have use for you. ...And do you really want to get "used" by a cyber world that you don't understand, respect, or have any control over? (Hint: if you don't respect SM today, you will learn to - possibly at your peril - very soon indeed.)

The Social Media revolution isn't coming: it's already upon us. Don't get left in the 20th Century with the passenger pigeon and the dot matrix printer.

From the article:

It’s no secret that social media—global, open, transparent, non-hierarchical, interactive, and real time—are changing consumer behavior and workplace expectations. As a result, the best businesses are creating comprehensive strategies in this area to support their goals. However, my research on the organizational implications of social media and consulting work with dozens of companies in America, Europe, and Asia suggest that it is taking longer for corporate leaders to consider what the new paradigm means for them personally.

Enjoy!

Fear Kills

2010-11-11T01:49:00.000-08:00

CEOs: look around at the people in your organization and answer me this: how fearful are they?

On a scale of professional courage, with Terrified at 1 and Reckless at 5, where do most of your people fall? Are they 4, Brave? Are they 2, Timid?

Leaders often tell me, "I wish my people were more entrepreneurial!" It makes me wonder. If you're a leader, ask yourself this: how committed are you to your people really, truly taking risks and sometimes (often?) falling flat on their faces? What happens to them when they do get it wrong?

In its infancy, Jet Blue faced a powerful test of its culture. In theory, in training, in branding, CEO David Neeleman told his staff and the world, my people have the latitude to make grown-up decisions on the spot in order to serve our customers.

Sure enough, not long into operations, one of its planes was grounded by weather in another city, and an entire flight full of passengers was in danger of being bumped. No worries, though! Taking his training at face-value, a ticket agent solved this potential brand-basher the best way he could think of. He walked down the counter to his competition and bought tickets on the next flight for every one of his passengers. To the tune of $160,000.

Stop right there. What would your company do if one of its front-line employees made a decision on his own to spend $160,000 of your company's funds? Seriously. I think we all know the answer.

...But here's what his JetBlue supervisors did: nothing. And here's what Neeleman did when he found out: he teased the agent. That's it. He just gulped, and laughed, and made a joke of it.

It turns out, there was an empty JetBlue plane right at his airport. If the agent had been a bit more resourceful collecting information before he acted, he could have found this out and saved his company five or six times his annual salary. But he didn't. He was on the spot and he did his best. Big oops. So JetBlue turned it into a teachable moment.

What did it teach? Well, for one, collect more information. Call up the ladder if you have to, even if it's after most supervisors' work hours. That's the easy part.

The more complex, and much more important, lessons this taught? One, JetBlue would not let its customers down. It would go to heroic lengths to do right by them.

And two, JetBlue would not let its people down. It would not leave them out to dry if they made a less-than-stellar choice. Instead, it would stand by them; maybe the CEO would razz you if you made a costly error, but your job would never be in jeopardy for sticking your neck out and trying to do your best.

Let's compare this example with something I heard from another front line employee at a different company just this week. We'll call her Sandra. And for context, this particular worker is the number one performer in her entire organization, of over one hundred people who perform her role.

"I don't post much on our internal blog. You can't be too careful, you know."

You can't be too careful. Hmn. Of what? Of expressing your opinion? To your coworkers? Really?

Let's leave it here for now. I want you to think long and hard about Sandra's words. About where she's coming from. And about what your own folks are saying, and thinking, and doing, and not doing, at your firm every day. About the type of talent you're attracting, and growing, and keeping, and driving away.

Fear kills.

Your comments are very important to me.

*****

For a related post on the dangers of negative emotions at work, read What's Really Dragging Your Business Down.

Social Media? What's the Point?

2010-11-08T03:10:00.000-08:00

Last Tuesday, I wrote on the four stages of Social Media. The fourth, most mature, stage is "build" - as in, build a community. That's where the payoff is. Building a community is the entire point of Social, beginning and end of story. Let me explain:

Social Media can be a ton of fun or a tremendous time-sink, depending on your perspective. If you're a Facebook addict like so many of my friends, you probably think Social is all about keeping in touch with your college buddies and relatives from back home, and you love it. If you're an employer, you probably think of Farmville and Mafia Wars and lost productivity, and you can't wait for it to go away. (Good luck with that.)

No wonder many business leaders are afraid and/or disdainful of Social Media! Seriously, as a former employer, I get that loud and clear.

But if Farmville is where you're coming from, you're missing out - not on the fun, perhaps, but absolutely on the opportunity. Because Social Media is what marketing and public relations have evolved into. SM takes the static, one-way corporate "brain dump" of the 20th Century and flips it on its head!

Ask any CEO in the last sixty years, you'll hear the same thing: word of mouth is the holy grail of business. "We've got to get our customers excited about our product - so excited they go out and brag about us to their friends! So excited they drag those friends into our store/bank/amusement park/self-storage facility to experience us for themselves!"

This is exactly the point of Social Media! Done right, SM allows a company to build customer allegiance by engaging those customers as equals in a two-way discussion of global proportions! It's advertising on steroids, but it's much better than advertising, because we humans are inured to the endless onslaught of ads by now - we're pretty much immune to anything Madison Avenue can possibly throw at us. "Oh, that message is from the company. Why would I trust it?" people say - and rightly so.

Before Social, one person could tell some friends - maybe ten, if she were really enthused. Maybe two of that ten would end up checking the company out. Yikes, even snails hope for faster results than that!

Today? One customer can easily tell ten thousand by taking one minute to Tweet. Add a link to that Tweet, and it can go viral in an instant.

The question isn't, will your brand experience Social Media? The only question is, will your brand be co-leader in that ongoing, never-ending discussion?

Welcome to this exciting new century! As I share along this blog's masthead, the rules of business have already changed. Have you changed along with them? Or are you being left behind?

*****

This weekend, I started playing with this analogy:

Social Media is to traditional advertising what ______ is to _______.

Can you help me? The best I've come up with so far is this: Social Media is to traditional advertising what a jet ski is to water wings (you know, those little floaties babies wear on their arms). I'm pretty certain you can do better. Help me out?

What Social Media Needs to Work

2010-11-06T08:14:00.000-07:00

Here's a quick list of the four things any company's Social Media efforts need in order to succeed:

1. Champion

2. Buy-In

3. Strategy

4. Alignment

1. Before any Social Media initiative is even considered, it is absolutely essential that a company assign the right leader to be its internal champion. This champion will require the skills and personality to use soft power (aka persuasion) to sell the idea of Social to your company's stakeholders. Build coalitions of support or watch this new growth wither through apathy, isolation, or outright resistance.

Remember to clearly articulate at every step along the way: "What's in it for them?" No matter how team-oriented your colleagues are, they're still people, and people look at life from their own perspective. Sell them on how Social will serve their individual goals and your job will be infinitely easier.

Business is always about the Leader. Social Media is no exception.

2. Any successful Social Media effort requires the support of the CEO. That doesn't mean it has to be his or her top priority - probably far from it! But when the top dog makes clear his own buy-in of the necessity of Social, the rest of the company will much more easily accept it as well. Even if the Social Champion is a bit removed from the CEO on the org chart, everyone must be clear that Social is a direction the company is taking, and that the Champion represents the will of the leader.

If this is not indeed the case - if the CEO just doesn't get Social Media, and everyone knows it - well, that's too bad. Use your role to gain experience for your next employer, who with luck will be a bit more attuned to the way business is done in this new century.

Either the CEO is for Social, or he's against it. Which is it?

3. Without a robust strategy, Social Media is destined to be little more than a quaint distraction and, ultimately, a failed project that turns leadership off to the entire concept for several years. Choose your Champion now, but take your time developing your strategy. You can't rush this one. Social is such a huge topic, and evolving so quickly, this is going to be a mammoth undertaking with countless iterations. Enjoy the process!

Champion first, then Strategy.

4. The fourth necessity for a worthwhile Social Media effort is an understanding of, and alignment to, the culture of the business. Business is driven by the constant interaction of leadership and culture, which manifests itself in everything the company does. So be very careful here. If you have a "round peg" 21st-Century Social Media strategy, it won't fit in the "square hole" of a 20th-Century business culture. That isn't to say that the 20th-Century business can't have any Social Media effort at all, it just needs a different one from that of a modern culture's.

With hope, your company's Social efforts will help pull even a reluctant old-school culture closer to modernity. But don't rush it. Remember that Social can't blaze a trail and leave its company behind.

Only three things matter in business: Culture, Culture, Culture. Make sure your Social strategy fits that culture, or you're doomed to failure.

Four essential components, one rousing success. Enjoy the ride!

*****

I'm grateful to say that my last post on Social Media attracted comments from some heavy-hitters in this nascent field - I encourage you to read them all.

Those comments and the Twitter conversations that followed hit home with me, especially the remarks about crafting a careful alignment of culture with whatever social media strategy your company undertakes. In future posts, I'll dive deeper into the whole topic of culture as it pertains to a successful Social Media strategy.

What have I left out? What have I gotten all wrong? Your comments will help me develop my next post.

The Four Stages of Social

2010-11-02T03:25:00.000-07:00

Welcome to the 21st Century, where all business is Social!

...Which is to say that - like it or not - if your company isn't involved in Social Media in some way, what are you waiting for? I hope not a pink slip.

But what can you do with Social? What's the point of it? How is is useful?

Here are four of the main things you can do with Social, in order of sophistication:

1. Listen.

2. Broadcast

3. Repair

4. Build

1. Listen. If you aren't using Social Media to listen to what people are saying about your brand, you're way way WAY late to the party. Fortunately, this is something you can do easily and with no exposure at all. Just open some anonymous accounts online - I'd start with my favorite medium, Twitter - and take a look at what people are saying about (a) you (b) your competitors (c) your favorite brands. In other words, start learning. Now!

2. Broadcast. In other words, you can use Social to get the word out about your company, just as you've been using print and broadcast media to do for generations now. This comes with a caveat, however: those companies that blare their message and fail to interact by fostering a genuine community don't get much traction. That's why I'd call broadcasting through Social immature. It isn't very social.

3. Repair. Restore. Soothe. In other words, use Social as another - necessary, highly effective - channel for putting out your brand's fires. People complain online all the time. Tap into where your customers are, and put your most talented customer service stars online to respond to their problems and complaints.

4. Build. Build what? Build community. Build your brand. This is where the magic is! This is where the potential, the fun, and the payout, is for savvy companies. It requires intelligent brand-ambassadors to establish, maintain, and grow your brand in the instant-paced give-and-take of Social. But if you look at the pioneers of Social Media, you'll notice it is already working wonders for their brands. For some, Return On Investment is already clear. For many others, it's in the pipeline.

Most of all, make sure it's fun! Because that's the number one rule of business: if it isn't fun, you're doing it wrong.

Oh, and of course the underlying rule of all business: if it isn't profitable, it isn't business. At least not for long. Social is all about the long-term payoff, which we'll cover in future posts.

*****

This is the first of a periodic series on the uses of Social Media in this new, exciting century. Stay tuned for more, because this barely scratches the surface of what can be done with a savvy Social effort.

Note: What have I left out? I named this "The Four Stages of Social," but maybe I was premature. Perhaps a more accurate (though less compelling) title would have been "Four of the Ten..." or some such. Please let me know!

Who's The Barber Here?

2010-10-29T02:56:00.000-07:00

Below is a link to one of my favorite SNL skits of all time: Theodoric, Barber of York. It's from one of the first seasons, with Steve Martin in his prime playing the starring role as the village barber/doctor. Have you seen it? It's brilliant!

For the longest time, I thought it was merely a good-natured rant against the arrogance of doctors - "Now, who's the barber here?" Theodoric admonishes one of his hapless patients before yet another bloodletting.

Ah, but it's so much more. This skit is an admonition to all experts, thought leaders, and gurus to tread carefully. What we knowledge specialists take as gospel today may be just as flawed as what we used to think was certain a few years ago.

The next time someone insists they have a monopoly on the truth, be afraid: be very afraid.

We humans do our best. Our best is often very good. Indeed, all of the progress we've made from Theodoric's time until the present day - even just from 1975 - is because we took what we knew and acted upon it.

But it's also because we questioned what we were told was irrefutable. We tested what the experts told us. Those who questioned orthodoxy most thoroughly became our new experts (at least for a while).

The next time someone insists there's a small toad in your belly causing your company's profits to dip, and laughs at past experts who told you the cause was demonic possession, think of Theodoric - and avoid that guru's prescription for another round of bloodletting!

Me? I'll take "reasonably sure" versus Insistently Right every time!

Watch Theodoric here: http://www.hulu.com/watch/3529/saturday-night-live-theodoric-of-york

From Old School to 21st Century CEO

2010-10-21T14:26:00.000-07:00

In 1995, when he became Chairman and CEO of Cisco Systems, John Chamber was a 20th-Century leader at the top of his game. In the spirit of the era, his style was command-and-control all the way, as he himself admitted in a recent interview with Newsweek.

But today? Today, Chambers is a changed man - and his company is far more competitive than ever! As he tells Newsweek,

"I realized there was something that many of us do not understand when we take a leadership role: culture. Great companies have very strong and great cultures. A huge part of a leadership role is to drive the culture of the company and to reinforce it. The other thing that has changed dramatically is [a shift] from command and control to collaboration and teamwork. It sounds easy to do, but it’s hard, because you are trained that way in M.B.A. school, in law school. Around 80 to 90 percent of the job is how we work together toward common goals, which requires a different skill set."

Continues Chambers,

"There’s a fundamental change that may be really important to the future of business in this country and the world. At Cisco, we are moving to collaboration teams, groups coming together that represent sales, engineering, finance, legal, etc. And we’re training leaders to think across silos. We now do that with 70 different teams in the company. So we’ll have a sales leader go run engineering. A lawyer go run business development. A business development leader go run our consumer operations. We’re going to train a generalist group of leaders who know how to learn and operate in collaboration teamwork. I think that’s the future of leadership."

Ask John Chambers if 21st-Century Leadership is a fad, or if he sees it as essential to keeping his enterprise at the forefront of innovation and profits long into the future.

Click here for the entire interview. You'll especially enjoy the longer video-version found on page 2 of this story:

http://www.newsweek.com/2010/06/04/know-what-you-don-t-know.html

*****

This is part 2 of a 2-part entry. Part 1 precedes it on this blog.

Is 21st-Century Leadership Inevitable, or Just a Fad?

2010-10-11T12:50:00.000-07:00

I'm often asked, "If we're trending toward a new style of leadership in this exciting new century, why are so many companies still run like the 1950s never ended?"

This implies the question, "If it's working for these old-fashioned companies, why do leaders need to progress or die out, as you suggest?"

Are you ready for some heresy against my own heresy? Many leaders will continue in their old ways, and some of their companies will continue to prosper. While I'd like it to be otherwise, here's why eddies of the old ways will remain, in some pockets probably forever.

Capitalism isn't all that old yet. When Adam Smith first laid it out for us in 1776, most of the world was still mired in feudalism. Those few economies that were entering what we'd consider the modern era were focused on exploitation of natural resources for trade internally and overseas.

In this first permutation of Capitalism, commodities reigned. Most work required low-skill labor. In such a scenario, the command-and-control, top-down management of the feudal system carried over very well to enterprise. And just as trade was a zero-sum game, where you made money at the expense of your customer, so too pay was zero-sum: the Capitalist prospered more by paying his workers less. Thus, workers and customers were exploited just as was nature.

That is 19th-Century management in a nutshell. A commodities economy, with workers just another commodity.

The 20th Century brought sophistication to the workplace, though. Large-scale manufacturing created an ever-growing demand for high-skill labor. Command-and-control still ruled in the new century, but leadership grew up just a bit, as it became clear that competition over the best workers required better working conditions and pay.

Please don't think I'm claiming that 20th-Century leaders benignly granted better conditions to their workers. Social backlash against the oppressive conditions of 19th-Century management, manifested in new labor laws and unionization, also drove the improvement of management practices. But the turn of the last century did see leaders imposing more enlightened styles upon themselves as a way to attract and retain top talent, as Henry Ford showed when he doubled the going rate for labor in order to combat attrition brought about by the monotony of his new assembly lines. Ford would almost certainly have failed had he not progressed to a 20th-Century leadership style.

Did all of the 19th-Century ways fade away over the course of the 20th Century? Not at all. You can still find examples of completely exploitative management practices even today. Why? Because there remain some industries, such as agriculture, where the old rules still apply.

So what about today? We've trended from a commodities-based economy to a manufacturing one to a knowledge-based economy.

Are commodities and manufacturing gone entirely? Well, if you're reading this post on a computer or smart phone, if you're doing it in clothes while sipping a latte, you know they haven't - and they never will.

But in mature economies across the globe, high-skill, high-education knowledge-based industries are in the ascendancy. And guess what? That calls for an entirely new style of leadership. One that treats workers like adults. One that is both easier, because it's collaborative, and more difficult, because giving orders and expecting workers obey may be simpler, but it is simply no longer feasible.

...But it is genuinely infeasible only where the market forces employers to wise up or go under. Or, as is also often the case, where employers choose to embrace a more enlightened leadership style because it's the right thing to do and they want to do it. (An idea you can poo-poo if you like, but I know quite a number who have adopted a 21st-Century leadership style because they do honestly prefer it.)

Will 21st-Century Leadership ever be the only leadership there is? I promise you, it won't.

But I will promise you this: within competitive high-skill industries, the most successful, prosperous companies will be those that adopt modern management practices soonest and most meaningfully.

Next time, I'll share one CEO's transformation from 20th to 21st-Century leadership and the remarkable transformation it has wrought on his company. I'll bet you're using one of his products right now, maybe without even realizing it.

What's Really Dragging Your Business Down

2010-10-02T08:45:00.000-07:00

Think your competition is the biggest threat to your company's prosperity?

Not even close.

The Japanese have a saying: "The nail that sticks up gets hammered."

What this means is that if someone goes against the grain, stands out and perhaps starts to make a name for himself, it is the responsibility of his peers to slam him down and put him back in his place.

Japanese culture values conformity about as much as American culture cherishes individuality, so for years I took this saying as reflective of an ethic that set our nations apart.

I'm a bit older and, in this case at least, a whole lot wiser now.

It doesn't matter the culture, humans are jealous creatures. Even when there is plenty for everyone, we're quite often more concerned with the other guy - notably, with making sure the other guy isn't doing better than we are.

I see this in my two little girls all the time, as I saw it with my sisters and myself when we were little. Even though in a healthy family there's plenty of parental love to go around, children are incensed by the idea that a sibling may get one more Popsicle, or an extra ten minutes of alone time, or... fill in the blank. It never ends.

And I've seen it in workplaces for years. I've observed it so often that I'm convinced this is a universal human trait.

...But so is rage, and we don't tolerate that in the workplace. Jealousy has no place at work, and it stifles most business' progress. When staff and managers are more concerned with keeping the other guy from the boss' favor than they are happy for a peer's success, that only hurts.

And not one in one hundred companies is truly free of this drag on its productivity.

Several years ago, I had a client with a number of retail locations. I spent quite a bit of time at a number of these spots, and got to know the store managers well. One of these managers, whom I'll call Bob, was highly innovative, and one of his creations was a program that taught math to area school kids in a real-world way that was fun for them, fun for Bob and his staff, and a great PR boon as well. His store thrived as he involved his community in this program. Within a couple of years with him at the helm, they really were the neighborhood store.

Bob was recognized by a trade organization in a national award ceremony. Great for Bob, right?

Well, of course it should have been great for Bob. But before he returned from his trip, the other store managers were poisoning the grapevine with jealous chit-chat about Bob. They teased him relentlessly for being the company's golden boy.

It got so bad that this is what Bob told me a few years after returning from his trip: "I wish I'd never won that stupid award." He was practically shaking as he related this. Not one ounce of him was proud or grateful for the recognition; he was just resentful of his peers and regretful of the entire experience.

There are a hundred different ways that jealousy can manifest itself within an organization. The result is always the same. Jealousy acts like a weight on a company's potential. A culture that tolerates it, even in much more subtle ways than Bob's firm, is paying a huge price in lost morale and de-motivated talent.

How jealous is your culture? And what is even a little jealousy costing you?

How Much Is Enough?

2010-09-30T05:02:00.000-07:00

Every so often I stumble upon a business leader who proves there is more to business than the size of one's bank account; that business has meaning beyond simply "profit."

...Not that I've yet to find one who's starving. Each of these rare leaders has plenty of money, wealth even. But they opt for more than just cash, and I love them for it!

Let me introduce you to my newest hero, Anthony Maglica, founder and owner of California's Maglite.

http://www.npr.org/templates/story/story.php?storyId=130197557

If you like it, please share it!

The One Rule To Succeed

2010-09-27T06:14:00.000-07:00

This general rule is how all leaders succeed, regardless of field: Find out what everyone else is doing, and do the opposite.

Sound simplistic? Fine. There is nothing complicated about success, in business (my area of some expertise) or in other arenas as well.

As you read this article, take yourself away from the sports perspective it's written on and apply it to your business instead.

Enjoy!

Coaches learn when 'no' is a good answer

By Gary Parrish
CBSSports.com Senior Writer Sep. 22, 2010

Adonis Thomas is a 6-foot-6 wing from Memphis, a consensus top 10 national prospect, and only a couple of months away from signing day remains a recruiting target of five programs: Arkansas, Florida, Memphis, Tennessee and UCLA. I've privately talked with at least one coach from each of those staffs about Thomas at one point or another, and they all agree he's a terrific prospect, an awesome kid and the type of player who helps you win.
They also agree on this: He's probably not leaving home.

Thomas won't announce anything for another month, of course. He'll visit Fayetteville and Gainesville and Los Angeles, this after visiting Knoxville two weekends ago. He'll consider his options, enjoy himself, be wined and dined and adored. But when pen eventually hits paper, everybody I've spoken with agrees, the smart money has this certain McDonald's All-American signing with Josh Pastner's Tigers, and all other schools are probably wasting their time.
In fact, two coaches asked me this exact question recently: Why am I wasting my time?
My answer: I have no idea.

But the situation is hardly unique in the recruiting game, which got me thinking about a larger question: Why do so many college coaches -- head coaches and assistants alike -- spend so much time recruiting prospects they know, deep down, they don't have any real shot at signing? It can be an incredible waste of money and energy, and it can also cost guys jobs because while one coach is out scrapping to finish third for a future pro he was never going to get, another coach -- i.e., a smarter coach -- is focused on a more realistic target, locked in and building a program.
"I've had so many coaches make comments to me about it looking good to be on [an elite prospect's] list," said Scout.com recruiting analyst Evan Daniels. "That's bogus. Quit wasting your time and be realistic. Half of recruiting is knowing when to move on and making the right decisions."

With that in mind, I introduce John Costigan to the column.

Costigan conducts motivational speeches and sales training classes around the world for a list of clients that includes Hewlett Packard, Oracle, Tommy Hilfiger, and IBM. I met him at a coaching clinic at Florida last month. He was invited by Billy Donovan and Larry Shyatt and asked to help coaches understand how many of the same principles he teaches in the world of sales translate to college basketball recruiting because, let's face it, that's a sales job, too.
It was fascinating stuff.

Among the first things Costigan did was ask the coaches -- everybody from Butler's Brad Stevens to Purdue's Matt Painter to Oklahoma State's Travis Ford -- if they typically knew "in their gut" whether they could really get a particular kid or not, and almost all of them said they did. Granted, in some cases circumstances change -- maybe an opposing coach gets fired or an opposing program takes a recruit at the same position -- and a school might end up landing a prospect previously considered a stretch. But for the most part, coaches know whether they realistically can expect to sign somebody, which is why Costigan told the assembled coaches to go for the 'No' early when they believe they're going to get the 'No' late anyway.
It's a counterintuitive approach.

But it's also smart.

"Coaches have got to get out of 'Hope Alley,'" Costigan said. "Hope is not a strategy. If coaches can get out of 'Hope Alley' quicker, then they can focus their efforts on the folks who are realistic possibilities to help their programs. That's why I say 'Yes' is a great answer and 'No' is a good answer as long as you get 'No' early on. 'Maybe' is terrible, and a late 'No' is the worst because if you get a 'No' after visits and phone calls and time and energy and resources, then you'll say, 'Damn, I should've focused my efforts on somebody else who I really did have a shot at.'"
And by the time you get around to saying that, that somebody else has typically been scooped up.

Perhaps by somebody like Pittsburgh's Jamie Dixon.

Multiple coaches told me over the past few weeks that Dixon is one of the best at distinguishing between what's realistic and what's not, and that he doesn't waste much time with what's not. That's why Pitt rarely finishes third for an elite recruit. Dixon has no interest in finishing third. In baseball terms, he only swings at strikes, and he's happy to let others battle North Carolina and Duke each July. While that's happening, Dixon is in a gym focused on signing the next Ashton Gibbs, getting ready to win another 25 games.

"It's not about who you can get to visit," said former Pitt assistant Tom Herrion, now the head coach at Marshall. "It's about who you can get to commit and sign."

Costigan agrees.

So do I.

"I love when a coach tells me he's 'involved' with four top 50 recruits," Costigan said. "When a coach says that, I say, 'Great. Define involved. And which one would you bet your salary on?' A coach should always ask, 'Would I bet my salary on this kid [signing with me]?' The answer to that question is usually a pretty good indicator of whether you should spend more time recruiting this person. ... But what happens is everybody thinks they have to play the game, and some people confuse hard work with intelligence. People love to tell you how they've really been out there and seen this kid so many times. But in the end, I think your gut is usually right, and the coaches who stay out of 'Hope Alley' are usually better off."

Judge Me By The Company I Keep

2010-09-17T15:13:00.000-07:00

Granted, this is just one CEO's opinion. Still, I am honored to appear on a list of such heavy-hitters in the business community:

http://www.customerthermometer.com/voiceofthecustomer/top-17-must-read-build-a-business-with-fantastic-service-ethos/

Introducing Clienteer TV

2010-09-12T09:36:00.000-07:00

I wish I could take any credit at all for the brilliance of the following video, or for the potential of Clienteer Hub, but all I did was find it through my friends on Twitter.*

You'll also want to check out http://clienteerhub.com.

*Yes, you Twitter doubters: I'm living proof that you can make some very good friends on Twitter. Several of them also participate in Clienteer Hub, as it turns out. If customer service is your thing, perhaps you should join us!

The following video interview builds directly on Daniel Pink's work in "Drive," which I've blogged on recently. Enjoy!

http://t.co/h6BwPs1

The Myth of The Money-Motivated Sales Pro

2010-08-29T02:52:00.000-07:00

In his book Drive, as in the 10-minute must see-video in my last post, author Dan Pink doesn't address the time-honored doctrine of the money-motivated sales hero.

That doctrine goes thus: Sure, maybe the rest of us would prefer to work for its own sake as long as it's stimulating and we're paying the bills, but what about sales heroes, those rain-makers whose very success is gaged solely by the size of their paycheck, the car they drive, the price of their suits; the lavish vacations their company rewards them with?

I myself have held firmly to this relic of 20th-Century motivation. But I've hoped for someone to show me a better way than my antiquated notion of "The sales-pro exception." So I emailed Dan for clarity.

Dan delivered, and now I'm an even bigger fan.

First, read this column from the Sunday Telegraph.

Follow it up with "some research coming out challenging other orthodoxies. Here, for instance, is some work just out of Stanford."

Quite humbly, Dan finished his reply with this:

"So there's no universal answer, but part of me suspects that salespeople aren't all that different from the rest of us."

Dan Pink's phenomenal work is a key component of how business will be done better in this exciting new century. Read it. Watch it. Absorb it. Most importantly, act on it!

10 Very Important Minutes of Your Life

2010-08-23T13:58:00.001-07:00

Watch this 10-minute video clip with audio from Daniel Pink, author of Drive. I'm going to watch it every Monday until I've got it memorized.

http://www.youtube.com/watch?v=u6XAPnuFjJc&feature=player_embedded

I'd love to hear what you think.

How to Transform Work Culture (part 1)

2010-08-08T13:21:00.000-07:00

As we discussed on my last post, a lot of business leaders are intimidated by the very topic of corporate culture. Culture is "squishy;" it smacks of Kumbaya. It's hard (if not impossible) to measure, completely impossible to chart on a graph and slip into a powerpoint for the board. That's scary!

Relax. No one's going to ask you to hold hands and sing around a campfire. Culture isn't nearly as mysterious or frightening as all that.

Culture is nothing more than widely-shared outlook backed up by widely-shared habits.

See? That's something you can sink your teeth into, isn't it? If you're still a little foggy, try these two phrases on for size:

"This is how we do things around here." and "That's not how we do things around here." (or "...on this team" or "...in this family" or "...in this platoon" or "...in this sorority." You get the picture.)

Look around your company. How are things done? What attitudes are common? What actions are routine? That's your culture, for better or for worse.

How is culture developed and shared with newcomers and reinforced among long-time members? Think of your own family. Rules are great and all, but is that what your family is really about? "Don't do this, don't do that?" Of course not. The way we indoctrinate new members (children) into our family is through the sharing of stories. Stories illustrate. Stories explain. Stories stay with us.

I can tell you every detail of a hundred Coine family stories by heart. Why? Because they're about people I love. ...Because they're a part of me. ...And especially because I've heard them a thousand times!

Now think of the culture shift you'd like to lead at your company. What values and habits do you want to instill or strengthen? Start celebrating these. Let the leaders share these stories with everyone across the organization. Let them start to publicly recognize, praise; maybe even reward those employees who are doing what's right. Let the other leaders farther down the organizational pyramid share and praise these same stories. And watch as new, maybe even better tales bubble up from the bottom to become your company's newest culture-building stories.

And now, time for an example. (I've got hundreds.)

If you're reading this blog from beyond the United States, you may never have heard of a department store chain called Nordstrom. If you haven't, suffice it to say that Nordstrom has built its five-star reputation on the often seemingly-ridiculous lengths its employees ("Nordies") will go to please their customers. They call these acts of unusual service "Heroics," and Nordies even enjoy an internal newsletter where they can read examples of some of the many heroics their friends and colleagues are pulling off each month around the country.

One such heroic begins with a very ordinary act, of a Nordie cheerfully wrapping a customer's gift one afternoon. "Hardly heroic" you think? I did, too. Until I learned that this was a customer of cross-mall rival Macy's, not of Nordstrom at all. It turns out Macy's wasn't able (or willing?) to wrap this customer's present for a birthday party, and the party was fast approaching. So, in a panic, the Macy's customer rushed down to Nordstrom, where she knew they were always ready to wrap a gift.

Stop right there. I don't know if that Macy's customer defected and is now a strictly-loyal Nordstrom customer or not. I wish I knew, but that's not the point. The important thing Nordstrom leadership wants all Nordies to take away from this story is that unbegrudgingly cheerful and amazingly helpful behavior is part of the very essence of Nordstrom. It's what Nordies do, and that's all.

Now I ask you: what stories do you share amongst your members and with your customers to show to each other and the world how you behave? And how does your leadership recognize and reward your heroics?

How do you transform an ordinary culture into one of immense profitability? One heroic story at a time.

Are you a Top 1% Leader?

2010-08-01T09:24:00.000-07:00

You're a business leader and you want more profits. You've come to the right place.

You may have noticed my equation for just this situation, which I'm not shy about sharing on this blog, on Twitter, in my speeches, in my books, and really anyplace you find me. I call it the Three Legs Principle. In part, it goes like this:

LEADERSHIP + _______________ + _______________ = PROFITS

Take a look at that for a moment. What you'll notice is, there's this huge void between savvy Leadership and the Profits that leadership is aiming for.

In other words, no matter how sharp a leader you are, you can't get where you need to go without active buy-in and participation from your people.

The two missing pieces of the equation are CULTURE and CUSTOMER SERVICE. And the equation is in the order I present it for a very good reason. The Leadership has to come first - you, the top guy or gal, needs to get it or the whole show's over before it starts.

...Which explains most businesses. Clueless leaders abound, leaders who don't get that profits are the direct result of top-flight customer service. Most of the few who do get the customer service driver of profits don't value what is really driving the service, which is culture. And because these leaders don't understand culture, and so don't hold it in very high esteem, even these customer-service obsessed leaders don't see the point of throwing their effort into their company's culture.

Fortunately, there's one last cohort of leaders, the rarest of the rare, who have the vision it takes to bring greatness to their organization. They get it; they understand that Culture is where their energies have to lie if they're to affect true and lasting profitability and sustainable growth.

Let's say that describes you; and given that you're reading this blog at all, it probably does. Congratulations. You're in the top 1% of leaders in business today.

But there's still a good chance you're asking, "How do I build a culture of service? I get that five-star customer service is the only way to build a engine of lasting profits. And I understand that without a culture of service, that top level of service is never going to permeate my organization, and describe every encounter my customers have with my company, day after day and year after year. But how? How do we build a culture of service given the culture we have in place now?"

That, my friends, is what the next entry in the 21st-Century Business blog will explain. Stay tuned!

(And good news: while building a prosperous business is rarely easy, it is exceedingly simple.)

Doing the Right Thing Will Save Your Business

2010-07-23T03:07:00.000-07:00

Seventy years ago, in the Third World nation of Venezuela, when other business leaders were still happily making their fortunes on the backs and graves of their workers, one company decided to do things differently.

Today, Polar is Venezuela's most-beloved brand. Its young CEO, scion of the company's founder, is one of Latin America's wealthiest men. He's still running his company according to the forward-thinking principals of his forebears. And that may be the only thing that saves his company from a government takeover.

Read and listen to the story on the struggle to nationalize this remarkable firm (link below). As you do, think about the bedrock principles of Capitalism done right, aka Twenty-First Century Business:

* Doing the right thing pays. Literally.

* Enlightened Self-Interest isn't just nice; it can save your company.

* Sow goodwill with your entire workforce and customer base in the good times, so they have your back in times of crisis.

* Do the right thing because it's the right thing to do. If that alienates some potential investors, you'll be better off without them anyway.

Here's the story. If you like what I have to say in this blog, you're going to love what is happening right now in Socialist Venezuela. http://www.npr.org/templates/story/story.php?storyId=128695640

By the way: let's not draw American politics into this discussion, shall we? I don't even want to go there. Let's just thank our ancestors that our country isn't as dysfunctional as Venezuela is right now.

Purpose: The Art of Business

2010-07-13T02:29:00.000-07:00

Why should your people care about your business?

If you answer, "Because it's their job to care," then guess what? You're right - but that doesn't matter. Your company is already in big trouble. The Twenty-First Century is going to leave you behind.

No matter how mature and professional we are, we all seek a higher purpose through our work - or, if our work fails to provide that purpose, we seek it someplace else, and our performance suffers. Our company suffers. Our customers and stockholders suffer. Our competition thrives.

Regardless of industry, the most successful companies are those that provide a galvanizing purpose, or meaning, or cause for their entire workforce, from the C-suites down to the factory floor and the janitor's cart. This shared sense of mission makes work an adventure shared by a chosen elite - and isn't that more exciting than a routine? ...a paycheck? ...a career? ...a project? ...(yawn) a job?

Too many CEOs fail to grasp this, which is perfectly understandable - after all, when you're Number One, your work almost certainly has all sorts of intrinsic meaning: your company's success is your own success. So they put a committee to work crafting a mission statement, announce that statement at an annual meeting, and turn their attention to more "important" work, such as relating to institutional investors and industry analysts.

...Only to wonder why their job (propping up their stock price) is so exhausting and fruitless.

Your people only have a passing interest in your stock price. And no one's job ever directly impacted the little number on a ticker-tape anyway!

CEOs, stop wasting your time on the trees of your business: you've got people to handle that.Instead, spend all your time telling your people about the forest your company is creating! Do what all the most successful business leaders - all the successful leaders period - have ever done, and share your story. Make work important; make it meaningful.

Purpose! That's what gets us up in the morning. That's what makes work engaging. It's what makes long hours and difficult challenges worthwhile. Fun, even.

Yes, business is fun. At least when it's done properly. But we'll save that lesson for another day.

*****

Missions: How does your company compare?

Disney World: A Happy Place On Earth

Southwest Airlines: Another Way to Get There

Zappos: Powered by Online Shoe Sales

Four Seasons Hotels: We Have Beds

Shula's Steakhouse: When The Wait At Outback Gets Too Long

Walmart: Cheaper Than Most

GE: Another Big Company Whose Executives Are Well-Paid

Ben & Jerry's: Made With Sugar and Cream

(This is fun. I invite you to add to this list yourself in the comments section.)

*****

This is part 5 of my 5-part series introducing the new iteration of this blog. I'm just warming up, though. Winning at business in the 21st Century won't be covered in five posts, or in fifty. I hope you like what you've read so far and come back for more!

Better yet, sign up for the RSS feed and follow me on Twitter. Links for both are on the upper-righthand side of this page.

What 21st-Century Business Looks Like

2010-07-08T02:23:00.000-07:00

This weekend, I'll be posting the fifth of five posts introducing my rededicated blog, all about how business will be done in this exciting new century.

First, though, I wanted to give my new readers a chance to catch up. Here are the first four posts in the series, in order of publication:

1. New Century, New Rules ~ http://savvycapitalist.blogspot.com/2010/06/new-century-new-rules.html

2. Three Trends, One Direction ~ http://savvycapitalist.blogspot.com/2010/06/three-trends-one-direction.html

3. Management Is War? Make That "Was" ~ http://savvycapitalist.blogspot.com/2010/06/management-is-war-make-that-was.html

4. Apathy: The Kiss of Death ~ http://savvycapitalist.blogspot.com/2010/06/apathy-kiss-of-death.html

5. The Art of Business (as yet unfinished).

What do you think? Your comments aren't just welcome; I need them to help me develop this line of thought. So please, crowdsource away!

*****

BTW: you might have noticed that my links don't link. Hey, I never claimed I was a technologist - just a fan of technology! {I'll mail $1 to the first person to explain how to fix 'em!}

Apathy: The Kiss of Death

2010-06-18T13:39:00.000-07:00

Every time your employees think about your company, they have one of three impressions:

1. They hate it.

2. They think it's fine.

3. They love it.

We all know we're in trouble if our employees hate working for us. It's easy for even the most boneheaded boss to grasp what that will mean:

* They'll do just enough to keep from getting fired. Can you afford that?

* They'll treat your customers and each other poorly, which will kill your brand by a thousand cuts.

* You'll have a really hard time attracting the kind of talent upon which to build your firm.

* The few people of talent you do attract will leave - the more desirable the employee, the faster that will happen.

Here's what most employers don't get, though (I believe because so few of them have themselves ever worked for a beloved company): there's no middle ground here. If your company is merely "Okay" or "Not that bad - for work," it's a lot the same as when it is hated. You'll experience the same exact problems as the leaders of a hated company, only the drain on your success will appear in slow motion by comparison.

There's no middle ground in the hearts of your employees. They either love you or they hate you. And apathy is close enough to hate that there's no reason to split hairs over the difference.

If they don't love working for you, they hate working for you.

Maybe - I'm not certain, but maybe - this wasn't always the case. Maybe once upon a time all work sucked, all employers were at least a little lousy, and people took their lumps, put in their time, and stuck around.

But it's 2010. And today, there are already enough wonderful employers out there that anyone of quality need not put up with anything less.

There's a lot of buzz right now about what a phenomenal culture Zappos has, and there should be - they've earned it, they are indeed just as great a company to work for as the hype would have you believe. Or so I've been told by so many Zapponians that I have to believe it.

But let's not stop with that one example.

Read "Let My People Go Surfing," and learn how fantastic a cause - yes, not just an employer, but a cause - Patagonia is.

Go to a Disney park and talk to anyone there about how they love their company. It's practically a cult! Oh, and don't stop there. Find a former Disney employee or twenty, and ask them what it was like working for that company.

Or try CD Baby. Or Southwest Airlines. Or Nordstrom. Or Four Seasons. Or Wegmans. Or Cisco.

Is your company beloved of your employees? Seriously: on a scale of 1-10, ten being the best ever, where would they put you?

I've got news for you. If you aren't earning pretty consistent tens from your people... you're screwed. Especially as the economy continues to emerge from the Great Recession. Doubt that at your peril.

*****

This is part four of a five-part series introducing the way business is being won in the Twenty-First Century. Your comments are invited and cherished.

Management Is War? Make That "Was."

2010-06-10T03:22:00.000-07:00

Name the one defining event of the Twentieth Century. There were several, of course: the Cold War, the Great Depression, World War I, the Sixties. But it's hard to argue that World War II didn't change everything; or maybe I should say it intensified the way we already did things.

The one big management lesson from the Second World War was that command-and-control leadership in the style of the military gets things done. Huge things. Seemingly impossible things. A bit ironically, it saved the world for Democracy.

Backing this up, look at the number one selling international management handbook of the past century. Blanchard's The One Minute Manager? Close, but no. Peter's In Search of Excellence? Again, that's up there, but not number one. No, the best selling management book of the past century is Sun Tzu's age-old military classic, The Art of War. You want to get things done? Looking to win at commerce, to vanquish your foes? Lead your business like it's an army, from the top down.

Here's the thing, though: top-down leadership creates vast waste of human talent. It motivates us to do what the big boss orders, but it also turns off our inner drive to exceed when no one's watching, or monitoring, or counting one acute measurement of our output.

Order your people around, and they'll do the bare minimum to keep their jobs. Measure their performance by the numbers, and they'll give you those numbers - and very little more. Think for them, and they'll stop thinking for themselves - they'll stop thinking for you, for your company.

People are smart. They start a new job eager to give of themselves. A growing handful of companies get that, and encourage that, and benefit tremendously from that. Most still don't.

Look at my favorite list of successful businesses, Fortune Magazine's 100 Best Companies to Work For. Out of those 100, how many are not just popular with their people, but also thriving despite this weak economy? And how many squelch their employees' natural talent and drive with command-and-control, by-the-numbers management styles?

Have you read The Art of War lately? You notice that Sun Tzu is kind of a psycho? Few talented people would choose to work for him today.

...And as I've shared in previous posts, one of the key hallmarks of the Twenty-First Century is choice of employment. Just watch as the economy continues to pick up. We're about to see job migration on an unprecedented scale. Business rulers: prepare to kiss your best talent goodbye as they flee to more enlightened corporate cultures.

My guess is that, as a competitive necessity, top-down management will fall out of favor in this exciting new century. My guess is that Blanchard, or Peters, or Daniel Pink (author of the must-read Drive), or another more enlightened management guru, will finally surpass Sun Tzu's sales. It's about time!

*****

This is part 3 of a 5-part series.

Three Trends, One Direction

2010-06-04T02:43:00.000-07:00

There are three major trends contributing to the breakdown of the Twentieth-Century ways of doing business. Together, these and other forces are driving us into the new modes of the Twenty-First Century. These trends are:

1. Transparency - Especially because of Social Media, but also from the ubiquity of information available to us in general, companies can't hide behind their billboards any longer.

2. Dissolution of the Business/Ethics Divide - Fact is, there never was such a thing as "business ethics" separate unto itself: there has always been just ethics. People are getting that now, finally. As with transparency, this trend has only begun to take effect. Just wait!

3. Employee Mobility - Once thought only to benefit companies, the end of employment for life is also giving employees more power, because they have begun voting with their feet: if an employer rules by Twentieth-Century standards, the best talent won't stick around for long. And unlike a generation ago, there is no career penalty paid for what was formerly seen as disloyalty.

These three trends are all leading us toward the same conclusions:

* Workers: People want to work for ethical companies. In the new century, ethical behavior has turned into a competitive advantage for attracting and keeping talent.

* Consumers: People want to buy from ethical companies. So doing the right thing in business has actually become a competitive advantage in the marketplace.

* Investors: As this change continues to develop, we'll see ever-more investors choosing to grow their money with ethical companies because it pays them a higher return. This has already begun, as I'll relate in a future post.

Enlightened Self-Interest. It's here to stay. Welcome to the 21st Century!

*****

This is part 2 of a 5-part series to kick off the rededication of this blog. Your comments are not only requested, but - in the spirit of collaboration that is a hallmark of this exciting new century - they are essential to the development of these ideas.

New Century, New Rules

2010-06-01T02:40:00.000-07:00

For several years now my books, this blog, and my career have all been dedicated to teaching a few powerful-yet-simple interwoven themes:

1. Doing the right thing pays. In other words, Enlightened Self-Interest.

2. Profits stem from five-star customer service. That level of service is only possible with company-wide a culture of service, which can only happen if leadership gets it and fosters such an environment. Thus my Three Legs Principle, like the three legs necessary to support a stool: Leadership + Culture + Customer Service = Profits.

3. Key to the success of any organization is employee love of that organization. (Yes love, not satisfaction. No one ever moved earth and sky because they were merely satisfied.) So if you run a business and your employees would rather work somewhere else... guess what?

(a) The employees you have aren't going to give you their all; they'll likely only give you the bare minimum to keep from getting fired...

(b) You may - may - attract some talent, but that won't be easy and it won't be the norm, and...

(c) You're going to lose your top talent to better offers - more engaging, inspiring employers - like an ax wound hemorrhages blood, until your organization perishes.

As I said, these are three aspects of the same theme.

There's something deeper going on, though, and I have to admit I didn't fully appreciate it myself until quite recently:

These principles aren't merely important; they don't "just" give companies a competitive advantage. I now realize they're part of a historical trend that is as inescapable to how business is done in the Twenty-First Century as electricity and the assembly line were to the Twentieth.

Trends don't announce themselves: they sneak up on us, often as an entertaining diversion, until the novel becomes ubiquitous and we have trouble even remembering the old ways. Social media is the novelty of the early Twenty-First Century that has rewritten all the rules. This silly little thing, our distracting MySpace and frivolous Facebook and downright odd Twitter and entertaining YouTube, and the myriad interactive features we've come to love on all sorts of websites throughout our day, have established themselves as the new status quo. And they are making Enlightened Self Interest, in all its manifestations, not a should-do, but a must-do.

Let me repeat for clarity: in the Twenty-First Century, doing the right thing is no longer a good idea. It is absolutely essential to the health of an organization.

Thus, the new name of this blog, 21st Century Business.

******

This is part one of a five-part series. Stay tuned for part two later this week. I've got a lot to share, and can't wait to hear your thoughts. Indeed, in the true spirit of Twenty-First Century business, I can't fully develop this line of thought without you!

Who Does It Serve?

2010-05-19T04:43:00.000-07:00

Every time you leader-types make a policy question, ask yourselves first: Who does this policy serve?

If the policy serves your rank-and-file employees, it's a good one. Go for it! What's good for them is good for your company, because a company that puts its employees first attracts, keeps, and invigorates top talent, and nothing is more important to your success than that. Nothing.

If the policy serves your customers, bravo! Do it. Don't give away the store - that's not what this is about. Serve them, fairly and well. If it serves your customers, they'll not only stay for the long haul, but they'll bring their friends, and you'll build an empire on an entirely solid footing.

If the policy serves internal constituents at the expense of customer-facing staff, you really owe yourself a second look. It might be a bad idea after all.

If the policy serves management in some cosmetic way... I recommend you think long and hard before bringing it to life.

If the policy serves your stockholders in the short-term... again, think twice, I urge you.

Leaders, ask this question of policies, as I said. But don't stop there. Ask "Who does it serve?" for every decision you make and every action you take, big and small, vital and trivial, across all levels of the company.

Your call center reps should be asking it of themselves on every call, probably multiple times. Your sales pros should be asking it when they're presenting to the board of a prospective client. Your distribution-center foremen should be asking it of themselves and of their team all day long. Your security guards should be asking it. Your recruiters. Your accounts payable staff.

Everyone. All day long. "Who does it serve when we...?" fill in that blank. And watch your culture gravitate toward profits driven organically from within the entire organization, rather than squeezed out from the Executive Committee.

Let me know how it goes.

*****

Two posts ago, I wrote about the only survey question you'll ever need (http://tinyurl.com/26bhpcv). I think you'll enjoy the post, and I highly recommend you read the comments - a number of customer service experts weighed in, adding great depth to the piece.

The survey question I share in that post is customer-facing, which is to say it is something for your company to ask each and every customer.

Leaders: Try a Look in the Mirror

2010-05-16T09:07:00.000-07:00

This is a shout-out to two of my favorite authors, whom I have yet to meet, and to my new friend Rob,* a leadership expert in his own right. These three men have taught me a few lessons I think you'll find of value as well.

The authors are Jim Collins of Good to Great fame, and John Maxwell, scribe of the mega-bestselling The 21 Irrefutable Laws of Leadership. If you haven't read these two books... um, let me encourage you to do so. Maybe they'll even change your career as they have mine.

I've been a student of leadership literally my whole life. My father was an accomplished executive turned management consultant and an extraordinarily charismatic figure, who began tutoring me in leadership from as early as I can remember. If it seems odd to you for a father to coach his 3-year-old son on the ways of the leader while fishing for sunnies, it was perfectly natural to my Dad. It's just what we talked about.

So fast forward about thirty-five years. The little fisherman grew up to found his own company, a private language school in Boston that sent teachers to some of the most respected area businesses. And, using a lot of the lessons picked up from those talks with his father plus many more besides, the company was thriving. We brought in a professional CFO who helped us value it at $10 million, and we prepared to sell part of it in order to finance even-more rapid growth.

...And instead of going through with it, Jane and I moved to Florida, and I focused my energy on my speaking career and nonprofit interests. We left the school on autopilot, and roughly eighteen months later we wrapped up our last class, graduated our last group of students, and... that's it. No more Coiné Language School.

I want to thank Jim Collins for that decision. You see, in reading Good to Great, I realized I was a Level 4 leader: effective, good even, but not the Level 5 I needed to be in order to bring our company into the Fortune 500 some day.

I needed to improve myself if I was ever going to get where I truly wanted to go. And running a small business 100 hours a week wasn't going to give me the latitude to reflect and grow as I required. I was already burning myself out, and I had only just begun.

That's my lesson from Jim Collins, one any leader needs to embrace. Are you a Level 5 leader? Because if you're not, you've got some work to do. (See why you need to read his book?)

I'm currently rereading John Maxwell's classic for a small book club I joined, and so I'm learning all sorts of vital lessons from him, many more than just the 21 he claims on the cover. But here's the most important one I'm taking away from his book at the moment: he didn't really begin to master leadership until he was fifty. Sure, he practiced leadership all his life, as I have. But he wasn't the expert we all needed him to be until he'd been leading in a professional sense for about thirty years.

That's a relief. I'm 43, and all my life I've put myself under tremendous pressure to be excellent now. But I've got seven years if I want to match the best in the business. John Maxwell's openness and insight has given me the gift of going a bit easier on myself. Ahhh. It feels nice.

All of which brings us to Rob. Rob is exactly my age, but unlike me, he's pursued a career of sales and leadership within enterprise organizations. He is vice president of one such company now, with a solid reputation and some talented followers and other leaders on his team. And the thing about Rob is, this man lives and breathes applied psychology. What I need to observe and ponder, Rob can take a quick glimpse at and nail cold. My impression is that he's been working at this for a long time, but he's a natural nevertheless.

Rob has been kind enough to help me hone my skills - yes, even business authors need career-coaches. And after only a short while working together, he pegged me as an authoritarian. Not a Nazi, mind you, but perhaps still too much of a top-down, my-way-or-the-highway leader. (The way I manifest this now is something like this: "Based on what I've learned from the best in the business world, this is my advice. Take it or leave it.")

Busted! Guilty as charged.

I can't stand authoritarian leadership in others; I've been railing against it in print and in front of audiences for years now. Top-down leadership is 20th Century, it's inefficient, and it's bad karma: it isn't Savvy Capitalism at all. So it's time I redoubled my efforts to leave that part of myself behind.

What can you learn about your own career as a leader from this post? A couple of things, I think.

1. Read Good to Great, and really focus on Collins' treatment of the five levels of leadership. As part of this exercise, it is imperative that you evaluate yourself according to this scale. What level would you say you find yourself at now?

2. Give yourself some time. Even if you're over 50, that wasn't John Maxwell's point. You shouldn't wait to become a leader - leadership is something that requires constant doing. But don't be so hard on yourself. Give yourself time.

3. Look at yourself frankly, and probably uncomfortably. We don't truly learn until we move far out of our comfort zone. Unfortunately, we humans are also famous for self-deceit. So do what I did, and ask a friend you respect what (s)he thinks of your leadership style. Chances are, you aren't going to find as remarkable a mentor as I've found in Rob. But any wise eye is better than just your own.

Let me know how you do. Or if you've already gone through this process, how did it go for you? My guess is, at least in my own case, this is a process I'm likely to repeat and refine forever. ...Though hopefully it will get less painful with repetition.

*"Rob" is a pseudonym.

The Only Survey Question You'll Ever Need

2010-05-02T06:01:00.000-07:00

Bold title to this post?

Thank you.

I realize that people have built careers, even sizable corporations, based on intricate surveying and analysis. I'm actually a huge fan and a friend of a few of these folks, most notably author Marcus Buckingham, formerly of the Gallup Organization, and Jamie Power of JD Power & Associates. I love their work, and don't mean to detract from its value at all.

But here's the thing: life is an essay test. When we ask multiple-choice questions, we limit responses - and what fool leader wants to limit the feedback she gets from a customer, employee, peer, or constituent?

This topic - the one survey question you'll ever need - speaks to a management philosophy that's been out there in the collective wisdom for more than half a century, "management by walking around." Bill Hewlett and David Packard grew their iconic company by leaving their offices and quite literally walking around their facilities, without preset agenda, talking to all levels of employees as they wandered.

If you want to lead, talk to your people. And when I say talk, make sure your lips move a maximum of about 20% of the time. By "talk to," what I really mean is "ask questions and listen."

It's hard. You're the boss. You know lots of stuff. Your subordinates haven't achieved your level of success, so they don't know as much as you.

Yeah, right. Get over yourself.

Now let's go from internal surveying to your client-facing survey. Ready? Ask each and every one of your customers this question:

"On a scale of one to five stars, from horrible to awesome, how would you rate our company over-all? And why?"

That's it: now shut up! Your turn to talk is over. Now it's your customer's turn, and you can't do a thing but listen: you can't explain, you can't justify; you can only listen and - if appropriate - take your lumps.

And learn.

That's it for now. Just ask your customers that question, collect the answers, and we'll talk again in a week or two.

*****

It might be useful to give folks a yardstick or two to compare your company to, so I hope these two lists come in handy:

Five Stars: Shockingly good. Top 1%

Four Stars: Outstanding. Close to perfect, though not quite

Three Stars: Unremarkable in any way

Two Stars: Disappointing, though all too typical

One Star: Terrible.

Zero Stars: Infuriating. Bottom 1%

Five-Star Companies: Zappos, Nordstrom, Wegmans, Chick Fil-A.

Four Star Companies: Marriott, many mom & pop firms

Three-Star Companies: McDonald's, Holiday Inn, Publix

Two-Star Companies: Dunkin Donuts, most banks and hospitals

One-Star Companies: Bank of America, Comcast, AT&T

The Ninja in a Parallel Universe

2010-04-21T03:15:00.000-07:00

This is a follow up to my guest post “Ninja – The Power of Expectation” on Barry Dalton's blog Customer Service Stories…and Other Thoughts (http://custservicestories.blogspot.com/).

Barry is a customer service and technology executive with a passion for the responsible use of technology to enhance the customer experience. His current focus is on service innovation and the contact center of the future. He's a thought-leader with an active and loyal following on Twitter, an expert who honors me by guest-posting on this blog.

In Ted’s post, he presented a compelling analogy between customer’s expectations and her perception of the experience delivered. In Ted’s example, you expect great service at a luxury hotel. So that presents a challenge to the experience provider in the “wow factor” category. How do you exceed an already high level of service expectation? And, if you simply meet the expectation, what does that gain you in terms of loyalty, retention and brand equity? On the other hand, in a low value, commoditized transaction, little incremental improvements in the experience can have a dramatically positive effect on the customer’s perception of the overall experience and the business. So in those situations, there is significant leverage to move the needle on those dimensions.

What happens however to the ninja in a parallel universe? The place where customer expectations are set and the service fails to deliver on that expectation.

The negative impact of poor service, I would argue cuts across the brand spectrum and destroys value indiscriminately. Unfortunately for those value-based brands, the contrary to Ted’s proposition does not hold up. If it did, you would think that the luxury brand would have more to lose from a slip and fall on the customer service banana peel. However, in today’s experience economy, when the low value brand falls of the cliff, it doesn’t get a free pass vis-à-vis the high value ones.

With the myriad choices available, at a time where information is overabundant, consumers need to apply a finer set of filters in order to organize their buying criteria. It seems to me that customers’ expectations of service these days are universally high, regardless of the absolute price of a product or service or its elasticity.

As basis for my conclusions, I wouldn’t characterize myself as a luxury shopper. I’m pretty simple, shopping most often at Target, Costco, Joseph A Bank and, if I feel like splurging on occasion, stopping by a Whole Foods or Fresh Market for something “exotic” for dinner. Regardless, whenever I’ve have a poor experience, I’m equally disappointed and apt to take my business away from The Holiday Inn in Columbus as I am from The Mark Hopkins in San Francisco (yes, both actual examples).

So while the concept of “giving a little extra at the time of purchase triggers surprise and delight”, as Stan Phelps of 9 Inch Marketing (http://9inchmarketing.com/) describes, buys the low value brand an exponentially positive benefit in customer perception, a little slip up can pummel any company, grand or meek, into submission. Just take a peek at the latest reaction to Spirit Airline’s decision to start charging for carry on baggage (http://ow.ly/1AoXU).

*****

My earlier post, "The Ninja-Power of Expectations," which appeared on Barry's blog earlier this month: http://custservicestories.blogspot.com/2010/04/ninja-power-of-expectations.html

The Ninja-Power of Expectation

2010-04-10T12:34:00.000-07:00

I'm honored to be guest-blogger at Barry Dalton's extraordinary Customer Service Stories blog.

http://custservicestories.blogspot.com/2010/04/ninja-power-of-expectations.html

Two Great Women, One Awesome Free Chapter!

2010-04-10T03:24:00.000-07:00

I love the power of connection.

Just this morning, I was reading the blog of one of my favorite Twitter friends, Dr. Natalie Petouhoff (http://Twitter.com/@drnatalie) when what do I see but a free chapter from one of my favorite books, by former Lands End customer service leader Jeanne Bliss. Apparently, these two dynamic business gurus, both now living in Los Angeles, have met and formed their own "mutual admiration society." Awesome!

Click here to get yourself a copy of the first chapter of Jeanne's phenomenal new book, I Love You More Than My Dog.

http://drnatnews.com/2010/01/free-chapter-1-i-love-you-more-than-my-dog-by-jeanne-bliss/

While you're there, learn more about Dr. Natalie, too. These are two experts whose work I'm proud to promote.

No Office for This Savvy CEO!

2010-03-07T08:47:00.000-08:00

For years, I've been telling any leader who'll listen: "Lock yourself out of your office for a day. Lose the keys. Walk around and mingle with your staff and customers." My hope is that they find enough value in mingling that they never look for those keys they've lost. No boss should have an office to hide in.

I wish I'd made this genius advice up myself, but to give credit where credit is due, the concept of "management by walking around" comes from HP's founders, Bill Hewlett and David Packard. Not that they didn't actually have offices of their own, as I espouse in person and, soon, in my upcoming book Spoil Your Customers Rotten. But the core idea is certainly theirs.

...So imagine my delight when I saw the title of Today's New York Times story, "An Office? She'll Pass on That" (http://nyti.ms/9sixc5). And let me tell you, I was not disappointed upon reading the whole article.

Savvy business isn't easy, but it is simple. One of the most important precepts shared by savvy leaders: get your hands dirty. Mix with the people who are making your company happen. Get out from behind that desk and do some work!

*****

Some highlights from this article, an interview of Meridee Moore, founder of Watershed Asset Management, that I especially enjoyed:

Q. What’s it like to work at your hedge fund?

A. We sit in one big open room. It’s the ultimate flat organization. We all have the same size desks. I can hear how the analysts are communicating and asking questions. There are no interoffice memos or office hierarchies. There’s not much that is distilled or screened. When we’re working on something, there’s a lot of back and forth.

Q. How do you hire?

A. We look at grades and scores, of course. We want the person to be competitive. Also, if the person has had a rough patch in his or her past, that’s usually good.

Q. Why?

A. Well, if you’ve ever had a setback and come back from it, I think it helps you make better decisions. There’s nothing better for sharpening your ability to predict outcomes than living through some period when things went wrong. You learn that events aren’t in your control and no matter how smart you are and how hard you work, you have to anticipate things that can go against you.

Q. What else do you ask job candidates?

A. The other question I ask is if they’ve ever been in anyone’s wedding party. If someone has asked them to stand next to him on the most important day of his life, at least one person thinks they are responsible. It means they’ve been able to establish and continue a relationship. It’s not always true, but if you build strong relationships with people, you tend to go into a management meeting or a negotiation and come out of it with some respect. You go into it thinking: “I’m going to leave this situation better than I found it. I don’t have to kill everybody to get to the right result for myself.” These are good qualities in a person and a partner.

For the entire article: http://nyti.ms/9sixc5

The Four-Way Test

2010-02-20T08:59:00.000-08:00

“To endure, the competitive enterprise system must be practiced within the framework of a strict moral code. Indeed, the whole fabric of the capitalistic system rests to a large degree on trust . . . on the confidence that businessmen and women will deal fairly and honestly, not only with each other, but also with the general public, with the consumer, the stockholder and the employee.” - James Fish, U.S. Better Business Bureaus

“If I followed the Test explicitly, I would starve to death. Where business is concerned, I think The Four-Way Test is absolutely impractical.” - Unknown

Imagine if you ran your business bound by Rotary International's Four-Way Test:

Of the things we think, say, or do...

1. Is it the truth?
2. Is it fair to all concerned?
3. Will it build goodwill and better friendships?
4. Will it be beneficial to all concerned?

Sound like a great idea? Or is it too scary to contemplate? Mine isn't a public test: you're the only one who needs to know your answer. But either way, it's something to think about, isn't it?

*****

Doing the right thing pays.

I've built my career, and my reputation, around that one piece of wisdom. It sums up the essence of Savvy Capitalism.

"Doing the right thing - always, every single time, even when no one's watching - pays" is a bold claim, and I'm sad to say it still flies in the face of conventional wisdom. Despite paying lip service to more enlightened principles, most businesspeople today remain Primitive Capitalists in deed, out for a quick buck at the expense of customers, rivals, employees; even stockholders. So as you can imagine, I'm always on the lookout for evidence to prove the validity of the Savvy way of business.

A couple of years ago, I learned the story of the Club Aluminum Company. What you are about to read are excerpts from a longer piece I found on a Rotary International website (for attribution, read to the end).

In 1932, Herb Taylor was in line for the presidency of the thriving Jewel Tea company in Chicago, when an opportunity came his way to salvage the flagging Club Aluminum Company. The cookware manufacturing company owed $400,000 more than its total assets and was barely staying afloat. Herb responded to the challenge and decided to cast his lot with this troubled firm. He resigned from Jewel Tea, taking an 80 percent pay cut to become president of Club Aluminum. He even invested $6,100 of his own money in the company to give it some operating capital.

Looking for a way to resuscitate the company and caught in the Depression’s doldrums, Herb sought inspiration to craft a short measuring stick of ethics for the staff to use.

As he thought about an ethical guideline for the company, he first wrote a statement of about 100 words but decided that it was too long. He continued to work, reducing it to the four searching questions that comprise the Test today.

Next, he checked the statement with his four department heads: a Roman Catholic, a Christian Scientist, an Orthodox Jew and a Presbyterian. They all agreed that the Test’s principles not only coincided with their religious beliefs, but also provided an exemplary guide for personal and business life.

And so, “The Four-Way Test of the things we think, say or do” was born:

1. Is it the TRUTH?
2. Is it FAIR to all Concerned?
3. Will it build GOODWILL and BETTER FRIENDSHIPS?
4. Will it be BENEFICIAL to all concerned?

Profound in its simplicity, the Test became the basis for decisions large and small at Club Aluminum.

But any test must be put to the test. Would it work in the real world? Could people in business really live by its precepts? One lawyer told Herb: “If I followed the Test explicitly, I would starve to death. Where business is concerned, I think The Four-Way Test is absolutely impractical.”

The attorney’s concerns were understandable. Any ethical system that calls for living the truth and measuring actions on the basis of benefits to others is demanding. Such a test can stir bitter conflict for those who try to balance integrity and ambition. Sizzling debates have been held in various parts of the world on its practicality as a way of living. There are always some serious-minded Rotarians, not to mention skeptics and negative thinkers, who view The Four-Way Test as a simplistic philosophy of dubious worth, contradictory meaning and unrealistic aims. The Test calls for thoughtful examination of one’s motives and goals. This emphasis on truth, fairness and consideration provide a moral diet so rich that it gives some people “ethical indigestion.”

But at Club Aluminum in the 1930s, everything was measured against The Four-Way Test. First, the staff applied it to advertising. Words like “better,” “best,” “greatest” or “finest” were dropped from ads and replaced by factual descriptions of the product. Negative comments about competitors were removed from advertising and company literature.

The Test gradually became a guide for every aspect of the business, creating a climate of trust and goodwill among dealers, customers and employees. It became part of the corporate culture, and eventually helped improve Club Aluminum’s reputation and finances.

One day, the sales manager announced a possible order for 50,000 utensils. Sales were low and the company was still struggling at the bankruptcy level. The senior managers certainly needed and wanted that sale, but there was a hitch. The sales manager learned that the potential customer intended to sell the products at cut-rate prices. “That wouldn’t be fair to our regular dealers who have been advertising and promoting our product consistently,” he said. In one of the toughest decisions the company made that year, the order was turned down. There was no question this transaction would have made a mockery out of The Four-Way Test the company professed to live by.

By 1937, Club Aluminum’s indebtedness was paid off and during the next 15 years, the firm distributed more than $1 million in dividends to its stockholders. Its net worth climbed to more than $2 million.

Too idealistic for the real world? The Four-Way Test was born in the rough and tumble world of business, and put to the acid test of experience in one of the toughest times that the business community has ever known. It survived in the arena of practical commerce.

In 1942, Richard Vernor of Chicago, then a director of Rotary International, suggested that Rotary adopt the Test. Herb Taylor transferred the copyright to Rotary International when he served as R.I. president in 1954-55, during the organization’s golden anniversary.

Today, more than six decades since its creation, has the Test lost its usefulness in modern society, as some critics maintain? Is it sophisticated enough to guide business and professional men and women in these fast-paced times?

Is it the TRUTH? There is a timelessness in truth that is unchangeable. Truth cannot exist without justice.

Is it FAIR to all concerned? The substitution of fairness for the harsh principles of doing business at arm’s length has improved rather than hurt business relationships.

Will it build GOODWILL and BETTER FRIENDSHIPS? Man is by nature a cooperative creature and it is his natural instinct to express love.

Will it be BENEFICIAL to all concerned? This question eliminates the dog-eat-dog principle of ruthless competition and substitutes the idea of constructive and creative competition.

The Four-Way Test is international, transcending national boundaries and language barriers. It knows no politics, dogma or creed. More than a code of ethics, it has all the ingredients for a successful life in every way. It can and will work in today’s society.

The final test is in the doing. William James, the noted psychologist, once said, “The ultimate test of what a truth means is the conduct it dictates or inspires.” At the heart of Rotary today is The Four-Way Test, a call to moral excellence. Human beings can grow together. Modern business can be honest and trustworthy. People can learn to believe in one another. At the 1977 R.I. Convention, James S. Fish of the U.S. Better Business Bureaus said, “To endure, the competitive enterprise system must be practiced within the framework of a strict moral code. Indeed, the whole fabric of the capitalistic system rests to a large degree on trust . . . on the confidence that businessmen and women will deal fairly and honestly, not only with each other, but also with the general public, with the consumer, the stockholder and the employee.”

Few things are needed more in our society than moral integrity. The Four-Way Test will guide those who dare to use it for worthy objectives: choosing, winning, and keeping friends; getting along well with others; ensuring a happy home life; developing high ethical and moral standards; becoming successful in a chosen business or profession; and becoming a better citizen and better example for the next generation.

Eloquently simple, stunning in its power, undeniable in its results, The Four-Way Test offers a fresh and positive vision in the midst of a world full of tension, confusion and uncertainty.

By Darrell Thompson, who is a member of the Rotary Club of Morro Bay, California. This article is adapted from a speech given by Darrell, with contributions from Rotarians Douglas W. Vincent of Woodstock-Oxford, Ontario, Canada, and Myron Taylor.

Mind the Store, not the Score

2010-02-16T03:53:00.000-08:00

Would you rather invest in a company whose stock price rises a dollar this quarter, or that doubles in five years?

It depends on your investment goals, of course. But if you ask me, I'll go for the long-term investment over the short-term bet every time.

To gauge the future health of a company, look to its CEO every time. Does the "Chief in Chief" slavishly react to the whims of the stock ticker? Or does she largely ignore that "score," instead focusing all of her attention on the "store" - whatever that means in her particular business.

Primitive Capitalism is all about maximizing the short-term gain. It counts pennies and ignores pounds.

Savvy Capitalism is focused on the long-term health of the company. It won't skimp pennies to earn more pounds.

Are you savvy?

A Tale of Two Recalls

2010-02-06T06:32:00.000-08:00

In my previous post, I shared my all-time favorite service-recovery story, the act that catapulted Lexus to #1 in its class and has kept it there ever since.

I also shared that I'm going to hold off judging the current Toyota recall until it has played out a while longer. I'll stick by that: I am going to wait before I weigh in.

But not so The New York Times, which claims, "(Toyota) may suffer far more than anyone could predict for the worst example of crisis management in the history of the auto industry."

Ouch! This is undoubtedly one of the harshest-yet-most-enjoyable, snarkiest pieces of business writing I have ever read. Note how the author, Matthew DeBord, gives it to GM and Apple toward the end of the article: no one is safe from his stiletto-wit.

A few choice excerpts:

"This chain of events could cripple Toyota for years. After all, the fanatical devotion that the company has inspired in owners is based on the perception that the cars and trucks it builds are nearly perfect. They always start. They never leak. In the case of the Prius and other hybrids, they save the planet."

...

"Companies that aim for cultish loyalty are vulnerable... Apple doesn’t respond well to customers criticizing its products. Toyota, likewise, doesn’t have much experience being attacked. It just wasn’t ready to handle doubt, dismay or the obliteration of trust."

...

"Contrast this with the eight-decade reign of G.M. as the world’s largest carmaker. Now there was a company that could handle hatred. There were times, in fact, when it seemed that G.M. didn’t care what its customers thought. Consumers loved Saturn — so naturally G.M. starved it, then killed it."

Your thoughts on this piece are quite welcome. Enjoy!

http://www.nytimes.com/2010/02/06/opinion/06debord.html

The Immaculate Recall

2010-02-01T15:14:00.000-08:00

Say "Toyota" and "recall" in the same sentence all of a sudden, and you're sure to get a conversation started.

We'll see how the current recall plays out for the world's largest automaker. In the meantime, I'd like to share the lesson of another Toyota Corporation recall, this one from 1989.

At that time, Toyota had just introduced a new division, Lexus, with the express goal of redefining the very meaning of luxury car and of "made in Japan." Now, at that time Japanese cars were popular for their fuel efficiency and, sure, reliability - but luxury? The very notion had auto executives in the US and Germany in hysterical fits of laughter, and much of the buying public shared their skepticism.

Still, within a few months Lexus had managed to sell 8,000 of its LS 400s. Then one American customer reported a problem with her cruise control. Shortly thereafter, another customer in a different city experienced the same problem.

Two faulty cruise controls out of 8,000 cars. Not the end of the world, right?

How you answer that question has everything to do with how savvy a businessperson you are. You see, the executives at Lexus weren't just trying to sell cars that quarter or that year: they were trying to redefine the national "brand" that was the Japanese automotive industry. To them, the question was never, "Will this problem blow over with minimal expense and (please-oh-please!) minimal bad press?" To the leaders at Lexus, the question from the very beginning was, "What will we do about this problem to show the world that no one does luxury like the Japanese?"

So, Lexus recalled every one of the 8,000 cars it had sold. Dealers drove to customers' houses and left customers a high-quality loaner car while the work was done. They returned repaired cars washed and detailed, with a full tank of gas and a present on the front seat - all, remember, for a faulty cruise-control: nothing more than a slight nuisance, when you think about it.

What's more, in the cases where the owner lived some distance from the dealership, a mechanic traveled to the customer's house with the new part and did the work there in his driveway. In one example, a customer had bought the car in Los Angeles and driven it to his home in Alaska, so a mechanic flew to Alaska to do the repair.

Short-term, this was way over-the-top: "Come on!" I can just hear some suits in Detroit and Stuttgart exclaiming. "They can't be serious!" But if there was any laughter, it was now tinged with more than a bit of nervousness. Because in this one heroic act Lexus did, indeed, show the world that the meaning of "luxury car company" would never be the same.

Foolish choice? For years, Lexus has held two proud distinctions: they are the perennial top choice of customers for "best service reputation." And they are #1 year in, year out, in luxury auto sales.

Was it worth it to spoil customers this rotten? Ask any savvy capitalist, she'll tell you: saving pennies on customer service will cost you dollars.

*****

I've heard this tale from several sources over my career, but my favorite version comes from Satisfaction (2006) by Chris Denove and James D. Power IV. I can't recommend their book highly enough.

The Simple Truth

2010-01-17T11:20:00.000-08:00

LEADERSHIP

CULTURE

CUSTOMER SERVICE

PROFITS

Leaders: Do You Follow the Nordstrom Code?

2010-01-09T07:19:00.000-08:00

I'm writing Spoil Your Customers Rotten! as a story, complete with plot and characters, in order to show how five-star customer service should happen in a real-life situation. The setting is Boldt's supermarket; the protagonists George Boldt (named after the first manager of the Waldorf-Astoria hotel, a distant relative of mine) and Candace, a college student inspired by the hero of Voltaire's Candide.

In this excerpt, Candace has just asked Mr. Boldt what the over-arching secret is to his company's five-star reputation and commensurate success. This dialogue ensues:

“Are you familiar with the Nordstrom Code?”

“The stores, yes. They’re icons in the service industry. The code…? No, what’s that?”

The Nordstrom Code: Use good judgment in all situations.
There will be no additional rules.

“I like it!” Candace said. “Before starting here, I would’ve thought that was impossible: my impression of most managers is, they’d tell you that if you trusted your employees to use their heads rather than their handbooks, the whole company would disintegrate in a day!”

“But you’ve noticed something different is possible here at Boldt’s, haven’t you?”

“You live by the Nordstrom Code, don’t you, Mr. Boldt?”

“I didn’t invent customer service, Candace. When we come across a trick that works somewhere else, we adopt it without hesitation. Nordstrom is a phenomenal company, with a top-rate reputation. They hire competent adults, and give them the freedom to use their talent for the benefit of the customer—and the stockholders.

“There’s a flip side to the Nordstrom Code, you know. Got your pen handy?”

Candace held it up, poised for action.

If you treat your employees like children, guess how they’ll act?

“That’s why our standard operating procedures aren't a list of rules made to be strictly enforced. Instead, they're a collection of practices that we encourage. Strongly encourage, mind you. But we prefer the carrot to the stick around here.”

This section of the book is a litmus test for business leaders. I ask you to pose it to yourself right now. How does the Nordstrom Code make you feel? Are you comfortable with the idea of treating your employees like adults? Truly? Are you ready to throw away your employee handbooks; your stifling policies and procedures? Or does the very thought make you squirm in your chair as you read this?

You can lie all you want, but only to yourself. For a fact-check on how closely your firm observes the Nordstrom Code, look at your policies and your management practices. Better still, ask your employees - though I wonder how many of them will have the guts to tell it to you like it is.

*****

For those of you who are curious, a couple of notes.

1. I happily give credit where credit is due: the style of parable I've incorporated for this book is based directly on my own enjoyment of Ken Blanchard's books, including my favorite, Raving Fans. Fortunately, he was kind enough to recognize the compliment and write a generous endorsement, which will be featured prominently on the back cover.

2. If this passage seems remarkably familiar, then thank you: you've clearly read Spoil 'Em Rotten, which I co-authored with my wife Jane and published in 2007. There's a whole story behind this, but not a very interesting one, so I'll spare you. The bottom line is, this new Spoil book started as a brief clean-up of the first version, but has morphed into almost an entirely new work altogether. So, I'm in the process of removing the earlier version from the market to allay any confusion.

Another of my favorite authors, Aldus Huxley, rewrote Brave New World 13 times before his editor surreptitiously published it. An artist's work is never good enough for himself, I'm afraid. Still, I'm going to try to make this second version of Spoil my last. I have too many other works to share with you.

When Customers Aren't Even Last

2010-01-01T11:54:00.000-08:00

One might argue that a company is wise to put its customers before all else. Certainly I argue that very thing every chance I get.

But even if your customers aren't first in the minds of your executive leadership, even if they aren't second or third; still certainly customers should factor into how you do business somehow!

Alas, that's not always the case. Take the ongoing saga of my friend, design maven and influential blogger Ken Peters, as he wrestled with Barnes & Noble over the past few weeks. I've blogged about his misadventures a few times myself right here on Savvy Capitalist.*

Seems to me, the leadership at Barnes & Noble doesn't consider life from its customers' perspective at all - not first, not fifth or eighth; not even last. Apparently, customers just don't matter to the top dogs at this firm.

But enough from me: you deserve to hear it right from the horse's mouth. So, for "my" first blog post of 2010... http://www.nocturnaldesign.com/cm/content/maximizethebenefit.asp

* I mistakenly wrote in an earlier post that Erin, who tweeted advice to Ken as this fiasco was unfolding, was an employee of Barnes & Noble. Turns out she probably wasn't - just someone piping in trying to be helpful. Uh... thanks, lady.

The CEO's Challenge: CCO, End Your Own Job

2009-12-28T18:47:00.001-08:00

My friend, customer service leader Barry Dalton, just came up with a great challenge on his blog, http://custservicestories.blogspot.com/. You'll enjoy the read.

The short of it is to imagine yourself as the Chief Customer Officer of a large corporation. You're all ready to charge into 2010 when the CEO calls you into his office and says,

"Your challenge for 2010 is to bring us to an entirely new level of service as a company, elimanating your postion in the process. You act with my complete support. What is your plan?"

My reply is posted on the comments section of Barry's blog, along with those of a few of the Blogosphere's other great minds in customer service.

Link to this post: http://bit.ly/7zO04m

The Customer Is... Sometimes Right?

2009-12-22T03:26:00.000-08:00

What do Nordstrom and Chick Fil-A have in common? Fast food and upscale retail. Tough one, right? Here's a hint: they're both market leaders.

How about Lexus and Wegmans? Luxury cars and price-competitive groceries. International footprint and 70ish stores in the Northeast. Tough to see a connection?

How about Connecticut's Griffin Hospital and Diamond Plumbing of Greater LA? Yes, they have something in common with each other, and with each of the other brands I've mentioned.

Oklahoma's Loving Care Home Health Care and Four Seasons Hotels. Saratoga Technologies and Stew Leonard's, "The World's Largest Dairy Store." Mitchell's ultra-retail clothiers, with rack upon rack of $3,000 suits, and Ooh-la-la Jewels Du Jour, with tables-full of $8 bracelets.

Give up yet?

These organizations all function on the same bedrock principal: The Customer is Always Right. And guess what? They are each wildly successful. They lead their fields or their markets.

I've gathered a vibe lately that perhaps the ages-old adage "The customer is always right" has fallen out of fashion with many self-proclaimed "thought-leaders" (aka experts) in business and even within the realm of customer service.

Guess again.

Being right will never be out of fashion - or more to the point, who cares what the latest trend is, if what you're doing is winning the day with your customers.

The next time someone tries to tell you that the customer can sometimes be wrong - not in a literal sense, but from a business-philosophy perspective - ask them how that attitude is working for them. What corporate ship do they steer? How are they faring against the competition? How many of their customers brag about them on a daily basis to their friends, coworkers, even strangers in line at the bank?

These remain tough times. Be careful who you take advice from.

Too Big to Thrive?

2009-12-10T03:13:00.000-08:00

Is your company too big for its own good?

Size amplifies culture, for better or for worse. That's why most enterprise-sized corporations are such disappointments in the human arena - their leadership is mediocre at best, and so it duplicates itself in the form of... you guessed it, mediocrity.

Compare that to Wegmans, the grocer that keeps growing - slowly but steadily - and keeps winning lifelong loyalty from its customers, year after year, store after store, region after region. Or Nordstrom: same deal - they're always amazing, coast-to-coast. Or Four Seasons Hotel. Travel the world, and Four Seasons is stunningly great no matter where you land.

Excellence is contagious. Culture doesn't just matter, it is the only thing that matters. Ignore this law of business at your peril.

*****

Barnes & Noble update

Are you ready for the latest on my friend Ken's Barnes & Noble saga? Here it is...

Nothing new. He has still not connected with anyone at B&N on Twitter or via their customer (dis)service 800 line. Wow, nice going, guys.

Meanwhile, have you read The NY Times' article on the technical aspects of the Nook today? These guys have more than just a customer service problem, it seems.

Is your company too big for its own good?

[Ken's story is two entries down.]

Spoil Your Customers Because You're Smart. Period.

2009-12-07T10:08:00.000-08:00

Let me throw something out there for you to think on for a minute: companies that provide top-tier customer service, that upper one percent, are more profitable than their competitors.

So as a business strategy, it’s not only nice to spoil your customers, it’s essential. If you don’t, you’re leaving money on the table – and probably even worse, you’re leaving a big, fat hole open for your competitors to drive right through. Nature abhors a vacuum, and so does the marketplace. If you don’t provide outstanding service, it’s just a matter of time before someone savvier comes along to steal your customers.

I promise.

This is the “Why” of spoiling your customers rotten: don’t do it because it’s nice, although it most certainly is. Don’t do it because you’re grateful to your customers for feeding your family and paying for your mortgage and vacations, although I hope you are. Provide five-star customer service with every customer, every day, across the board, because it’s foolish not to. As a business strategy. As a career decision. Doing the right thing is smart.

Customer Service on Twitter: No Room for Half Measures

2009-12-05T11:18:00.001-08:00

Correct me if I'm mistaken, but this is how I believe retail is supposed to work: you give the merchant your money - in the form of cash, for instance - and they give you the item you want. In the case you're about to read, that item is a Nook, Barnes & Noble's answer to Amazon's wildly-popular Kindle e-book.

Turns out I'm wrong, and not all retailers take cash anymore. Sound crazy? Read on...

I'm on Twitter just now (I know, what are the chances?), and something interesting flashes across my screen. Turns out thought-leader, graphic designer, and fellow blogger Ken Peters is having a ridiculously tough time making a simple purchase at Barnes & Noble.

* Here, let me insert one of my favorite business maxims: CONVENIENCE = PROFITS.

* And here's another I learned from my first multimillionaire-mentor: If someone offers you money, take it.

Back to Ken. He tweets about how B&N won't let him pay cash. Instead, they insist he buy a gift card to purchase his Nook. When he complains, the clerk gives him an 800-number which, rather than connecting him with customer service, brings him to a sex-line.

So at least he's got that going for him.

Now this is where the story gets compelling for all of us social media fans out there. For at the end of his second Tweet, Erin from Barnes & Noble tweets to Ken about his problem.

Yeah, social media saves the day, making enterprise-sized megacorporations seem small and responsive!! This is how business in late 2009 is supposed to work, isn't it?

...Except that Ken didn't like Erin's solution. And then Erin didn't get back to Ken very promptly. So I butt in and share this live saga with my Twitter followers as well. And I reach out to a fellow author and Twitter guru I follow with over 100,000 followers to see if we can engage him in this fascinating social experiment.

[Cool aside: I thought of this guru just then because he tweeted about buying 2 books at Borders. Coincidence, you say? Uncanny, says I!]

This will go one of two ways for Ken, and for Barnes & Noble.

1. It's going to be really hard for her, but with the right kind of customer service ethic plus the support of her company, Erin will come through for Ken, winning him back to the Barnes & Noble fold. In handling this complaint with aplomb, she will actually turn him from a casual customer to a raving fan. That's how these things work, when done right. Or...

2. Erin and her employer will not go the extra mile (or even a few extra yards) to fix Ken's wholly-legitimate complaint. And they'll have three bloggers spreading this story to their networks on Twitter, and... then Barnes & Noble may just regret its policy to not take cash for Nooks.

Stay tuned! Either way, there's a good lesson to be learned here.

Ken Peter's graphic design company: http://nocturnaldesign.com
Ken's blog: http://nocturnaldesign.com/cm/content/blog.asp
Follow Ken on Twitter: http://twitter.com/thinkBIG_blog/
Buy an Amazon Kindle: http://amazon.com

Everyone wins. Isn't that the point?

2009-11-21T11:25:00.000-08:00

You've got to feel bad for IT security leaders. Often dubbed "Dr. No" by their colleagues, the IT security professional's role has traditionally consisted of telling their peers why they can't do what they'd like to do. None of this is frivolous, of course; it's all about protecting companies from hackers, IP theft, corporate spying, viruses... these folks are there to save the rest of us from the hazards of the technology we often don't fully understand.

The problem is, saying No and But and We can't doesn't always mean they get the final word. Another part of this tradition has been for leaders from the business side to weigh Dr. No's dire prognostications against the alluring upside of technology.

In other words, saying No doesn't just make you unpopular. Often, it also makes you overruled.

Recently, though, I spoke with a security leader who had decided to take an entirely different tack with his peers. No more were he and his staff going to be Doctors No. In fact, he banned the words No and But from his department's vocabulary altogether.

Literally. Those two words are banned.

"Instead of No, we say Yes. In place of But, we say And. As in, "Yes, that's a great idea, and I'm going to work with you to make sure it's successful."

Partnering. Enabling. Turning Can't do into Can do - and then being careful with how it is done. That is how this particular company is aligning security with the business.

Everyone wins, because everyone is working together to make Yes happen. Isn't that the point of business in the first place?

Some industries get it. Others? Oh, boy.

2009-11-08T06:24:00.000-08:00

Ever notice how some industries have higher or lower collective standards of customer service? This has fascinated me for years. For instance, we frequently compare the best service we receive to top-flight hotels. It isn't that all hotels get it, but the best sure do - Four Seasons, Ritz Carlton, W, and Waldorf-Astoria all come immediately to mind.

So too with fine dining, some retail stores, some car brands: Wegmans, Nordstrom and Lexus are three of my favorite examples here.

At the other end of the spectrum... You can find a customer-centric hospital, like Griffin in Connecticut. But in general, hospitals are famously obtuse when it comes to the customer experience. They don't even call us customers, do they? We're patients, as in "it requires a lot of patience to put up with how we'll treat you."

Airlines? Oh, boy. Don't even get me started. While I love and admire Southwest and, to a lesser degree, Virgin Atlantic and JetBlue, you have to take it in context: Southwest is exemplary for an airline. But since airlines give abysmal customer service, being the best doesn't necessarily mean much.

Then we come to banking....* And all I can say is, What is wrong with bankers? I mean morally wrong. As people. I'm... I'm beginning to get discouraged in my fellow man, and anyone who knows me knows that this is just not the kind of thing I say lightly.

There are countless thousands of people working at companies that legally steal money from unsuspecting customers. This is such a scandal that Congress is enacting legislation to oppose it. Do you do something in your daily work that they have to pass a law to stop you from doing?

Let's think about this in context, shall we? Let's say that you, too, can swindle money from your customers right now - go for it! It'll bring in a whole pile of cash and prop up your bottom line this quarter and this year.

Sure, you'll alienate some customers along the way - so what? Everyone else is doing it, so what are they going to do, go to your competitor? Ha! Let's watch 'em and see how that goes!!

Here's my question for you. Forget all about repercussions from the law or from irate customers, and let's just focus on this one thing: can you live with yourself? Really?

That's my question for employees of big banks, including (but not limited to) Bank of America, Wachovia, Capital One, Fifth Third, and TD Bank. How do you feel about yourself?

*This is where I add my disclaimer, "Some small local bankers really know how to treat their customers." That's a different topic for a different day.

Out of the frying pan, into... TD Bank.

2009-10-12T15:48:00.000-07:00

I'm a crash-test-dummy of customer service research. All for you, my gentle readers. I do it all for you.

A few weeks ago, I drove across Florida to open a checking account at TD Bank, a trip I'd been looking forward to for at least 2 years. You can read all the details in the post directly preceding this one. Note the catchy title:

"TD Bank: Truly the Most Convenient Bank in America!"

I fawned over it like a freshman over the quarterback. Note this line in particular:

* My favorite? No stealth overdraft "protection" (and corresponding fee) on your debit card.

Well, guess what? The QB gave me a wedgie and left me swinging on my locker door for the entire World-Wide Internets to see.

I opened the account with $1,000. I asked the banker if they had overdraft "protection" for their debit cards. "No," she told me resolutely. "We don't do that here." I was in heaven.

But just to be sure - just because this is what I do at every bank I research - I kept using and using that card until it was rejected. $0 balance, right? Everyone happy?

...So imagine my surprise today when I learned my balance had gone to -$376.40. Yes, almost $400 below.

I called to find out the story behind the story, and here's what I learned: $26.40 in purchases below zero. $350 in fees.

Can you believe, I left Wachovia and drove cross-state over a measly $110 in fees? Man, am I a chump, huh?

Anyone know a good lawyer out there? I'm beginning to think that only a class-action lawsuit is going to end this mess. Certainly Congress hasn't shown any leadership.