A small company invests in leadership – Part 3 – initiating the process

Circle - phases 1 and 2

The team development process in which I spoke about in previous blogs (posts from Feb 12 and Feb 24) got started in the past two weeks.  The managing director of the German operations agreed with the process I proposed and gave the green light to go ahead.

Since then I have put the process in motion, concentrating on establishing the appropriate framework for the team development process and starting the initiative.

Getting the right framework is critical.  Two questions need to be answered before anything else can be done.  The first question is Why? – i.e. what is the purpose of making this effort and what does the company expect to be the  outcomes of this initiative.  The second question is Who? – who is and who is not on the team (and why or why not?).

I met with the managing director and the executive in charge of personal development for three hours to discuss these two vital questions.

Normally I would include more people in the search for the answers to these questions.  In the case of this client, I made a judgement call that keeping the number of people to a minimum was the appropriate strategy.  The key in this particular situation is having the 100% buy-in of the managing director who is de-facto the team leader.  This company has never gone through a process like this before.  Opening up the process to a larger group of people might create more questions and doubts than answers at this very early stage of the process.

My role was to facilitate an answer to the two key questions of Why? and Who?  that was both compelling and motivating.  Our conversation was very fruitful and the two company representatives came up with the following formulation:

“The purpose of this initiative is to prepare our organization for the next level of performance by strengthening our key success factor ‘Customer-Centricity’ and living and transmitting our values (respect, readiness to communicate and continuous improvement).”

This formulation puts the whole initiative in perspective, indicating what needs to be emphasized and what does not.

The next step was a bit more difficult – who should actually be on the team.  Studies have shown that in order to build a cohesive and interconnected team, that the optimal size is between 4 and 8 people.  The managing director had originally conceived of her team as consisting of 12 people.  Size does matter.  The larger the group, the more it tends to subdivide into smaller units.  If cohesion is an important goal of a teambuilding initiative, reducing the size of the team is imperative.  Of course, by reducing the team you have to avoid creating adverse effects with those people who are not selected.

After a thorough discussion, the team was paired down to 9.  The managing director the next week then communicated the purpose and the goals to not just the selected team, but to the entire company.  She also had personal meetings with the 3 that were not to be part of this development process.

With the purpose in place and the team defined, this week I officially launched the process for the team with an online questionnaire.  I wanted them to begin to think about what it means to be a team.  The questionnaire was made up of 12 basic questions about teams and took approximately 20 minutes to fill out.  Below is a sample view of a few of the questions in the questionnaire:

Questionnaire

Next week I will be meeting with all nine team members individually.  Two hour interviews have been arranged.  The purpose of the interviews are for me to get to know the team members personally, get them to think further about the meaning of a team and their role within that team and to address any barriers that may exist in entering into this team development process.

Circle - complete

The rubicon has been crossed….

Many men go fishing all of their lives without knowing it is not fish they are after.”   Henry David Thoreau

Global6 – Assessing Leadership in a Global Context – Part 1

What is considered good leadership practice  in Germany may not be considered good leadership in Japan or may need some modifications when dealing with US Americans.  Intercultural differences have been the subject of much study since the 1950s.  I have always been fascinated by the insights derived from these studies given that I am thoroughly multicultural person myself.

As an aside – I was born in Panama, raised in Mexico, and studied in the US and Germany. My mother’s side of the family is French, my father’s US American. I have worked in Mexico, US, France, Belgium and Germany.  My work as a strategy and leadership consultant over the past twenty years has taken me to – at latest count – 30 different countries.  I truly think of myself as a World Citizen.

My first encounter with the intercultural literature was reading Edward T Hall – considered the founding father of intercultural communication as an academic field of study.  During the 1950s he worked for the US State Department,  teaching inter-cultural communications skills to foreign service personnel.  He came up with the concept of low-context versus high-context cultures – a concept still much in use today.  Low-context cultures such as the Germanic culture transmit information explicitly – i.e. through language and tangible information.  High-context cultures such as the Japanese culture transmit messages implicitly – the context, the body language and other non-verbal clues provide the information.  A spoken ‘Yes’ does not necessarily mean ‘Yes’ – it depends on the context.

The Three H’s of Intercultural Communication – Hall, Hofstede and House

edwardthall_1993Hofstede house_robert_rdax_192x226

Obviously leadership in these very different cultural environments needs to take on different forms.  Ever since Edward T. Hall various further attempts have been made to codify the differences between cultures.  As our economy has become more global, understanding how to navigate in these diverse waters and currents of culture has received increasing attention from both public and private sector leaders.

In the 1970’s Geert Hofstede significantly expanded the framework from which to look at different national and organizational cultures.  Using survey data from over 100.000 individuals from over 40 countries, he developed a model composed of 5 different dimensions of culture.  It was a great honor in the year 2004 to have Geert Hofstede talk at a Forum which was organized by my colleague Ted Baartmans and me in Maastricht.

This work has been continued through further studies.  The most recent and comprehensive being the GLOBE Study led by Robert House, professor at Wharton at the University of Pennsylvania.  The GLOBE study included 170 countries and established 9 cultural dimensions.  I was also very fortunate to be present in London in 2011 when he received the prestigious Lifetime Achievement Award from the International Leadership Association.

Yet despite all of this information, how can business leaders truly know how to change and adapt their style globally?

This week I had the privilege to be one of  the first people to be certified in the brand new 360° instrument – Global 6 created by the Center for Creative Leadership. It is the first instrument I am aware of that provides business leaders with practical information directly from the people they work with.   It gives them pragmatic advice on how they need to adapt their leadership style globally.  In my next blog I will explain how this instrument works.

If we are to achieve a richer culture, rich in contrasting values, we must recognize the whole gamut of human potentialities, and so weave a less arbitrary social fabric, one in which each diverse gift will find a fitting place.”  Margaret Mead

Communication, Communication, Communication (aka Leadership made simple)

When a painter considers what to paint there are two primary factors that he/she needs to take into account before beginning to paint on the canvas – form and color.  The approach to these two factors has influenced the style of painting throughout the ages.

Leaders also have two main ingredients with which to work –  Energy and Information.  The latter is so essential, that leadership without communication is unthinkable.

I recently assisted a mid-sized company to address the issue of effective communication at all levels.  This company is a family business in Germany’s Westphalia region which is specialized in the area of technical gases.  Over time, the number of products and services which the company offers has multiplied. As a result, the geographical footprint of where these products and services are sold has also expanded into 6 different countries.  With this much sought after and desired expansion, both the complexity of the business and the challenge of optimizing effective communication throughout the organization have increased.

As with any company, communication is at the heart of co-ordination, effectiveness and efficiency. But how do you go about adressing this key issue?

The first step in the process is to create a collective awareness of the specific issues at hand.  By doing so, the foundation is being established for taking decisive action and implementing concrete measures.  140 managers from across the organization were invited to participate in a 4 hour large group participative dialogue. During this dialogue, they discussed and mutually agreed on the communication issues which are of greatest importance for their work in the company. The following Word Cloud captures the key issues that were discussed.  (FYI – the larger the words, the more importance which was placed on the issue by the managers).

word_cloud_communicationAll of the 140 managers explored these issues together and identified concrete recommendations on how to improve the communication within the company.  The following mind map summarzies the managers’  key recommendations. A detailed data base of the individual entries were used to create this overview. The numbers adjacent to the recommendations record the number of suggestions made in this category.

Blog_Post_Communication

Through this large group dialogue process, the communication issues within the company was made visible to everyone.  The platform to launch a systemic change in the way the company communicates with each other (as well as with clients) has been established. The next step is to prioritize the issues and create working groups of managers throughout the company to put these ideas into action.

“The art of communication is the language of leadership.”     James J. Hughes

3rd Industrial Revolution and Leadership

Let me start 2013 with a macro view of leadership…

I was in Philadelphia last year as part of the delivery team for one of the acknowledged top leadership development programs in the world – the Philips Octogon program.  It is a program involving 32 selected top performers at Philips.   The program takes place over 8 months in three locations.  The first session was at the Wharton School of Business.

steinberg center

Steinberg Conference Center – Wharton School of Business

Of course I felt quite comfortable coming back to this location.  Back in the 1980s I obtained my MBA at Wharton – one of the more prestigious business schools in the world.

I had the privilege to be able to listen to a presentation by Jeremy Rifkin on the first day of the program.  Mr. Rifkin established the Foundation on Economic Trends (FOET) .  Among many of his activities, he is a valued advisor of heads of state in Europe (including Angela Merkel) and has had very direct impact on European economic policy.  He is the author of the concept of the 3rd Industrial Revolution which is a road map for long-term economic sustainability.  This concept was formally endorsed by the European parliament in 2007.

This concept has fundamental implications for leadership in the 21st century.

His talk began pessimistically enough.  We are in the end phases of the Second Industrial Revolution and the only way out of this dead end is to completely change the fundamental infrastructure on which our current civilization is based.

Each industrial age is characterized by two fundamentals: energy and information.  Mastering a new energy process provides the means to create a new form of information dissemination.  The First Industrial Revolution centered around coal-fired steam-driven power generation.  This new energy regime also enabled the advent of mass produced newspapers and magazines based on steam-powered rotary press and linotype technologies.

The Second Industrial Revolution began with the advent of the internal combustion engine powered by fossil fuels.  This revolution was complimented by a communication revolution based on the creation of an electric grid infrastructure which eventually led to telephone, radio and television.

This Second Industrial Revolution is reaching its limits according to Rifkin.  The most important recent economic occurrence in the past five years is not the financial crisis of 2008, but the rise of oil prices to over 140$ a barrel in 2007.  This rise in the price of oil represents a major threat to the welfare of human society on the planet.  So many of current modern materials are based on fossil fuels (from plastics to fertilizer), that this price has seismic implications for the economy.  Rifkin concludes that the current economy is doomed to limited growth for decades to come.  Every time the price of oil goes over 120 $ a barrel, a new global recession is virtually assured.  The problem is not the amount of fossil fuel available.  There are still plenty of reserves.  The problem is that getting at those reserves is becoming more costly over time.  This limit threatens ALL economies including emerging economies such as China and Brazil.   It is a global phenomenon.

What is the way out?  What are the implications for leadership?  Stay tuned for more….

“One thing I have learned over these last 30 to 40 years is that people make history.  There is no fait accompli in any of this.”         Jeremy Rifkin

The Science of Motivation

One of the more provocative pieces of the Maersk workshop in Copenhagen had to do with the issue of employee motivation and performance appraisal.  Many corporate incentive and performance systems are not taking into account what the science is saying about what motivates people.  Daniel Pink in a TED talk outlined the key points:

  • As long as a task requires only mechanical skill, bonuses work as they would be expected – the higher the pay, the better the performance.
  • Once a task calls for even a rudimentary amount of cognitive skill, a larger reward often leads to poorer performance.
  • Extrinsic motivators, which Pink refers to as “if-then” rewards, often destroy creativity.
  • The secret to high performance isn’t rewards and punishment but rather that unseen intrinsic drive, the drive to do things for their own sake, the drive to do things because they matter.

There are two videos that I highly recommend.  The first is the original TED talk from August 2009.  More visually entertaining is the RSA video which shows the same content but portrays it using graphic recording.

The conclusions reached by Pink are the result of various studies.  For instance, in early 2009, economists at the London School of Economics looked at pay for performance schemes and concluded that “financial incentives … can result in a negative impact on overall performance.”  In the video, Pink cites studies sponsored by the Federal Reserve Board of the United States.

The implications of these studies for how we manage and lead our organizations is fundamental.  These findings are the essential building blocks of any modern approach to leadership.  So what motivates people?  Autonomy, Mastery and Purpose

In short, people are most motivated when they have choice, when they are able to demonstrably improve their skills and when what they do has meaning to them.

This may not seem like surprising results, but they do contradict what most business do in trying to incentivize performance.  Watching this video at Maersk produced the expected results.  Workshop participants had a long discussion on the implications for their performance review system and for the company bonus system.  At Maersk, there is a forced ranking of employees on a performance scale.  The ranking directly influences the bonus that an employee receives.  Every year, the “leaders of leaders” at Maersk could sense the demotivation that is created by this process. The Dan Pink video helped them to see their intrinsic unease with the process in a different light. Real motivation – that extra striving to do something not only well, but to the best of one’s abilities – is not created by a bonus system.

“Motivation is a fire from within. If someone else tries to light that fire under you, chances are it will burn very briefly.”  Stephen Covey

 

Leadership Pipeline at Maersk

This past week I was at the new leadership centre of A.P. Moeller Maersk in Rolighed. A former 19th century patrician home was converted last year into a state-of-the-art training and development facility.  It has a beautiful lake as a back drop and is only a few minutes walk from the ocean.  It is a temple of calm and reflection – a perfect setting for leadership development.

A.P. Moeller Maersk is one of the world’s largest shipping companies.  The company’s main shareholder is The A.P. Møller and Chastine Mc-Kinney Møller Foundation, which was established by company founder A.P. Møller in 1953 to ensure that the company would always be owned by parties that held a long-term view of the company’s development.

It is therefore not surprising that Maersk would be attracted to long-term development of its leadership.  In 2005, Maersk was introduced to the concept of the Leadership Pipeline, pioneered by former General Electric executives Stephen Drotter and Jim Noel.  The first edition of their book, co-authored with Ram Charan, came out in 2001 and was so well received in the corporate world, that a second edition came out last year.

The Leadership Pipeline Concept is simple.  As leaders progress through an organization there are several critical transition points.  At these transition points, the way that leaders lead changes.  Leaders transition from “Individual Contributors” to “Leaders of Others” to “Leaders of Leaders” to “Functional Leaders” to “Business Leaders” to “Enterprise Leaders”.  At each level different priorities, skill sets and usage of time are required.  For instance, a “Leader of Others” needs to learn the skill of delegation which was not necessary at the previous lower level.

It is important to manage the transitions well at each level.  If that does not happen, first you will have ineffective leaders in the organization.  Second, the pipeline gets clogged.  Leaders that do not make the transition make it difficult for the next transition to take place.  If an organization wants to insure that it has the leadership capacity it needs throughout the company, it has to manage and support these transitions at every level.

Curious? Take a look at the Entheos approach to instutionalize the Leadership Pipeline in your organization.

In my next blog, I will describe how I supported 18 top leaders at Maersk to make the transition to a “Leader of Leaders”.

Leadership Strategy at Philips

This past week I was in Amsterdam.  I had the privilege of being part of one of the longest running leadership development programs that I am aware of – the Philips Octagon program.  This leadership program has been running for more than 30 years. In 2011, the program received an excellence in practice award from the European Foundation for Management Development (EFMD).

The program combines the development of both business and leadership skills.  Participants are top leadership prospects at Philips.  During the 3 module – 3 continent program, participants prepare new business proposals which are presented to members of the Philips board .  In the past many of these proposals have been the inspiration for the launch of new businesses at Philips.

The current group of 24 top leadership prospects was finishing its program in Amsterdam after previous sessions in Philadelphia and Moscow.  On Wednesday morning, the group had the opportunity to listen to the Philips CEO, Frans van Houten.  The focus of his talk was on leadership and organizational culture.

I spoke to the group immediately after the session with Frans van Houten on the topic of leadership strategy.  Managers of companies throughout the world are well trained to put together business strategies.  They know how to analyze market and product opportunities.  They can put together project plans, calculate costs and estimate returns on investment.  This is all part of normal business practice.  But does anyone know how to put a leadership strategy together?

Leadership strategy has many components.  First is the issue of capacity.  Is the leadership in place to actually implement the foreseen business strategy.  Very often great plans fail, because that capability is not in place.  A second aspect of leadership strategy has to do with mental mindsets.  If you are proposing something new, very often the new way will require a new mindset.  For example, if as a manufacturer you are used to only delivering hardware, a shift to a a service mentality – where most of the profit comes from the comprehensive services provided with the hardware – can prove to be a major challenge.  Finally there is the issue of individual leadership. This is where leaders look into the mirror.  In leading this change, do I have the passion, skills and resilience to make this happen?

I asked the 24 Octagon participants if they had ever put a leadership strategy together for any of the business plans that they had crafted.  The answer was as expected.  None of them had ever done so.  Yet if the success of a business proposition is so dependent on having the right leadership in place, why is this not part of normal business practice?

“Leadership is the ability to do, not the ability to state”  Paul von Ringelheim – sculptor