Monday, March 25, 2013

Until morale improves

You may be familiar with the term cognitive dissonance,  the "psychological conflict arising from simultaneously holding two incongruous beliefs."

It is a theory that we all seek to "hold our attitudes and beliefs in harmony and balance" and when conflicts arise, we seek to restore our sense of harmony by reducing or eliminating the dissonant. The idea that spawned the theory is that we humans want "cognitive consistency" in our beliefs -- to believe what we believe, in other words -- and that need can lead to irrational and sometimes destructive behaviors.

This pop-psychology lesson is prompted by an interesting week in the pursuit of cognitive consistency in employee-related matters.   It was a somewhat futile pursuit:
  • An employer who has bemoaned the quality of applicants for open positions, but who continues to seek candidates from the same talent pool using the same recruiting tools.
  • Employees who decry micromanagement, but won't follow simple procedures and checklists designed to make their jobs safer and more productive.
  • A CEO who was surprised when a senior staffer left after being passed over for a promotion, but who refused to discuss with the employee why they weren't being considered for the post.
Yup, it sure is hard to be an employer.  But you know what, it is also hard to be an employee.  How do some bridge the gap and remove the dissonance that is endemic in many of the disagreements relationships between boss and staff?  Many organizations are considered great places to work.  Is it as Tolstoy wrote of families, that happy workplaces share common traits, but that unhappy ones are unique?

Monday, March 18, 2013

Would you believe?

Do you thrive on order or disorder? Into Ccontrol or Kaos chaos?

Are you a connect-the-dots kind of manager, taking comfort in plans and processes, trusting in systems that provide structure to move your organization forward step-by-step?

Or do you prefer a more freewheeling environment, believing that adaptability and improvisation is a litmus test that allows one's mettle to come shining through.

It's probably not a question that business owners ponder very often, but it came up in conversation a number of times this week, speaking with prospective TAB Board members about their approaches to managing their companies.

Some of those I met with professed to love the challenge of dealing with constant change, navigating a stormy environment and choosing the correct tack to keep forward progress going.  Others, well, not so much. They preferred a more grounded and gradual approach.

I'm sure you know successful executives in both camps. Today's entrepreneurial zeitgeist certainly reflects more of the swashbuckling, freewheeling, disruptive business type. And, while the it may be a more sexy story, would you believe that this approach yields worse outcomes than the old-school methodical, follow-the-plan approach?

As Jim Collins illustrated in his book Great By Choice, a discipline he calls "20-Mile March" behavior is a leadership trait that gives organizations "the ability to impose order upon disorder, consistency amid swirling controversy" but only when it is combined with a near obsessive focus on making continued progress against the objective.

According to Collins:
"Some people believe that a world characterized by radical change and disruptive forces no longer favors those who engage in consistent 20-Mile Marching. Yet the great irony is that when we examined just this type of out-of-control, fast-paced environment, we found that every (successful) company -- unlike their less-successful peers -- exemplified the 20-Mile March principle during the era we studied."
Collins relays the expeditions of Roald Amundsen and Robert Scott, two well-matched teams racing for the South Pole.
"For one team, it would be a race to victory and a safe return home. For the second team, it would be a devastating defeat, reaching the Pole only to find the wind-whipped flags of their rivals planted 34 days earlier, followed by a race for their lives -- a race that they lost in the end.... One leader led his team to victory and safety. The other led his team to defeat and death....What separated these two men? Why did one achieve spectacular success in such an extreme set of conditions, while the other failed even to survive?"
Find Collins' answer here.

The difference between success and failure is often small, with progress sometimes barely measurable and perceptible only in hindsight. Most often it is the result of a series of incremental actions and decisions rather than any single event.  Having a well-drawn plan, combined with the temperament and leadership skills to implement it consistently, even in the face of adversity, gives your organization a demonstrable edge over more flamboyant but less dependable competition.

Missing by that much may make for comedic gold, but it is often not so amusing in life or in business.  Believe it.

Monday, March 11, 2013

The stuff of dreams?

My cousin is married to a musician of some note in certain musical circles. A blues and R&B bassist, "Choppy" performs with several bands and we try and catch him at his local shows whenever we can.  This past weekend, he and friends played a gig in Hudson.

One of their pieces was a raucous, bluesy cover of the country standard "16 Tons" that segued into the Eurythmics' techno-pop hit "Sweet Dreams (Are Made of This)," that they stripped down and rocked out.  They synthesized two seemingly discordant musical styles and schools into a jam that brought the house down.  Smartly, the bartenders chose this moment to pass around the tip hat.  Naturally, this got me thinking about finances.  Small business finances, specifically.

I have met with several business owners lately who have not taken advantage of opportunities that would accelerate their growth.   They each had reasons:  uncomfortable funding the investment from their equity, uneasy about diminishing their cash flow, unwilling to take on debt.  It made me wonder, have even entrepreneurs become too risk-averse when it comes to employing all options for financing growth?

In the aftermath of the financial crisis that began in 2007, debt has become a figurative four-letter word (it already was a literal one.)  There's no argument that we had a debt binge in this country (globally, actually) and that our economic challenges are attributable in large part to postponing working through the necessary deleveraging process.

As marketer Seth Godin once noted:  The guy who invented ships also invented shipwrecks.  Thankfully, the perils of sailing did not scuttle seafaring.  Has the pain of the debt bubble created a mindset that is too limiting where debt financing is concerned? 

Access to debt financing can be a powerful force for small business growth.  It has ever been thus.  It is called leverage for a reason:  small amounts can have a powerful effect.  If you've kept good books, are profitable with a history of good cash flows (and have good credit score), banks and community lending institutions will and want to lend to you. 

Capital is the essential lubricant of commerce and for small businesses it is practically the elixir of life. Yet some now view debt as if it were unicorn blood, extracting a terrible toll for its employ. Smoothing out the cyclicity of cash flows rather than being hamstrung by them is smart financial management.  And the right debt can often be cheaper and provide more operating flexibility than equity capital.

Tennessee Ernie Ford may have lamented debt "to the company store" as an unholy burden, but for smart business owners, it is the stuff of which sweet dreams can be made.

      Monday, March 4, 2013

      Don't fear the reaper

      Donald Trump insinuated himself into the American psyche and lexicon with his signature bellow: "You're fired." His show, The Apprentice, had a good run before, as with many things Trump, it descended into caricature, evoking petitions for The Donald himself to be axed.

      While Trump's exterminator persona may have raised the eyebrows of kinder and gentler executives, not all disagree with his methods. One business owner I know advises:  "the best time to fire someone is the first time you think of it."

      Unrealistic, pig-headed, cold-hearted and self- destructive?  Perhaps, (and word does get around about bad bosses these days) but terminating problematic employees is not a matter for the meek or mild mannered.

      The above owner's snarky remark belies pragmatic thinking: if an employee is giving you reason to question their continuation, you'd better gear up for an exit sooner rather than later. A prepared mind, and all that.


      Trump notwithstanding, I don't know any business owners who relish the task of relieving anyone of their livelihood.  However, I have personally witnessed instances of owners extending an employee's tenure to the point that their business was gravely affected.  Not just by the brilliant jerks, whose contributions often mask their destructiveness, but by those who are chronically under-performing, disrespectful, deceitful and, in some cases, criminal. Bad apples, in other words.

      What to do?  Here's how to cowboy up, pilgrim:
      • Document, document, document:    You may think it is tedious and unnecessary, but you would be wrong about the latter and immature about the former.  Did I mention write it down? Like, yesterday?
      • Get good advice:  If you don't have an HR advisor or employment lawyer, don't be penny wise and pound foolish.  Talk to a pro. Stat.
        • Process is your friend:  You must discuss issues with the employee, and detail a plan of remedial action.  Have a plan and procedure and follow-it. Don't freelance or improvise.
        • Rehab your culture:  I have worked with a number of organizations who flourished after problem employees were exited.  This occurs only when and if owners allow an honest dialogue to occur after the dismissal.  These conversations, if conducted respectfully but openly, can rebuild trust that may have been lost through inaction or complacency.

          No business owner likes admitting to a hiring failure -- it's contrary to entrepreneurial DNA -- and many take employee issues personally.  Get over it.  If you have an employee who needs to exit your company, you must act decisively and deliberately.  Chronic bad behavior that goes unchecked is a cancer within any organization.

          Don't fear the reaper.