Posts Tagged ‘management’

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“Get Rid of the Performance Review!” – more than a catchy title

Wednesday, July 14th, 2010

get rid of the performance reviewSamuel Culbert’s new book “Get Rid of the Performance Review!” has proved itself headline-worthy. A PR person’s email to me stated, in part, “Culbert’s book has been featured in The Wall Street Journal, AP, Gannett, Reuters, the New York Post and many other outlets.” And it’s easy to see why. Almost no one likes or values performance reviews – managers who give them, and, certainly, those who are subjected to the stilted process and its results. Another lousy raise, another year in the same job, another set of unclear expectations for the future.

Thankfully, though, Culbert’s book is more than a rant against the performance review as currently practiced – though, for the first 55 pages, it is that. Manager-only reviews, 360 degree reviews and, most of all, HR organizations come are subjected to withering critique. The rest of the book provides an analysis of why performance reviews are ill-suited to their objectives (justifying pay increases, setting out critical performance goals and outlining personal development plans).

To Culbert, the structure of the review is fatally flawed. A boss of limited insight and deep personal biases (this isn’t an attack on bosses, merely a description of human beings in general) dictates the content of a review and a powerless subordinate sits there and takes it (or dissents, at some risk to her own career). The boss checks off things the subordinate is good at, and decides on some things she is not good at, and there it is.

After shooting down such an easy target, Culbert takes the remaining 170 pages or so and lays out some very commonsense but profound lessons about managing people and leading organizations. Particularly striking is this advice on compensation:

For straight talk about pay, the corporate world requires a shift in which compensation is recognized as the marketplace-dependent variable it is. Don’t mix apples and oranges by bringing up pay during a performance review. Don’t send mixed messages to subordinates, telling them one minute their performance is top-notch and then in the next minute that their pay isn’t going up.

How might this new system work?

First, bosses need to decide what pay raise and other forms of compensation they are willing to offer. Figuring out the offer entails every bit as much self-assessment (by the boss) as assessment of the subordinate’s value. Bosses need to scrutinize the bases of their beliefs about the subordinate’s talent and skills, what they are willing to pay incrementally for them, and their faith in their own capacity to provide the support needed to increase the subordinate’s productivity.

Bosses also need to assess the subordinate’s expectations and make a judgment about how the subordinate values the current compensation package, which includes such intangibles as, say, happiness with a child’s school situation or proximity to a spouse’s office, or whether they are going through a divorce. Finally, bosses need to study the marketplace. They need to know what people in comparable roles receive and assess the availability of a replacement if the subordinate leaves.

Once the compensation package is determined, it should be communicated impersonally–perhaps written down and handed to the subordinate in a sealed envelope.

At this point it’s up to the subordinate either to agree or to negotiate. If the choice is to negotiate, the ensuing “conversation” should be exclusively about pay. It shouldn’t be about performance quality or perceived “faults.” If the boss doesn’t like the quality of the subordinate’s performance and can get someone more to his or her liking, the boss should do so.

There’s tons more great stuff in the book. HR won’t like it. Neither will many bosses, because Culbert insists that bosses need to be full partners in their employees’ performance. If performance suffers, the boss is also accountable. The boss and subordinate are a team delivering results to the organization. This implies, to me, a lot of work on the boss’s part. But it’s important and crucial work.

Something has to be done to improve the current situation, which with the economic crisis has only gotten more dysfunctional. I was reading the book on a recent airplane flight and my neighbor asked me about it. Then he related a story he had lived through some years earlier.

I got a new boss who was really well-respected in the company. He thought I had potential to be promoted. He was pretty hard on me in my first review. He laid out all the things I needed to do to be ready for the next step. It was a bit harsh, but I understood. A few months later the company merged. They needed to cut staff by 20%. HR didn’t really know any of the employees, so they took the performance reviews and simply cut the people with the lowest 20% rankings – including me. My boss was appalled but there was nothing he could do about it. So instead of getting promoted I got let go.

There are probably thousands of these stories. Hopefully enough people will read and absorb the lessons in “Get Rid of the Performance Review!” that this situation will become rarer in the future. But I’m not too sure about that.

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Walter Kiechel’s “The Lords of Strategy” fills in a missing piece of business history

Wednesday, May 26th, 2010

lords of strategy coverHow did management consulting get to be where it is? Did firms like McKinsey, Bain, and Boston Consulting Group simply appear out of nowhere, fully formed, to foist re-engineering on companies everywhere and snap up graduates of the top business schools? Well, no. To find out what really happened you need to read “The Lords of Strategy: The Secret Intellectual History of the New Corporate World,” by former HBR editor Walter Kiechel, a well-written, cheeky history of the birth and growth of the modern consulting industry.

Kiechel paints vivid pictures of industry pioneers like Bruce Henderson of BCG and Bill Bain, and cannily outlines the keys to their success (in Henderson’s case, a passion for using mathematics to analyze business; in Bain’s, an ability to build relationships with CEOs and a willingness to tie project compensation to increased stock price). He also traces the next wave of strategy emerging from universities, most prominently the ideas of Michael Porter and their impact, through the re-engineering craze to the current day.

But most importantly, he puts into context what the strategy revolution, as applied by the firms he focuses on, meant to US (and eventually worldwide) business. One, a belief in the power of analytics; and two, the value of models to spread learning (i.e., best practices).

The book ends with a whimper rather than a bang. The last couple of chapters, looking ahead at the future of strategy and discussing the impacts of the financial crisis, are not up to the standards of the rest of the book, as if the events of 2007-2008 derailed Kiechel’s intended story arc. As a result, the summing up is a bit disoriented, as I suppose we all are in business after those cataclysmic recent events.

I also wish the book were more carefully sourced. After reading several chapters, it becomes clear that much of Kiechel’s source material comes from direct interviews with key members of the consulting world. The book would be better if those sources were identified and end-noted, and that other assertions connected back to their sources as well. Why this wasn’t done is a mystery to me and undermines the book’s authoritativeness.

Nonetheless, “The Lords of Strategy” is a valuable addition to the business bookshelf. It shines a light on and humanizes a part of the business world that operates in secret but which has significant influence on businesses the world over.

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Common sense isn’t common

Wednesday, May 5th, 2010

“It’s just common sense,” people say, as if this is a resource that we all possess in ample quantities. Yet if that’s the case, we don’t tap this resource very effectively.

The very impressive Wikipedia entry on common sense helps illuminate why this is so: “The common sense is an actual power of inner sensation (as opposed to the external five senses) whereby the various objects of the external senses (color for sight, sound for hearing, etc) are united and judged, such that what one senses by this sense is the substance (or existing thing) in which the various attributes inhere…”

commonsenseSo, common sense is not a pool of basic information that everybody has at hand; instead, it’s a way of putting information together to gain a deeper understanding, in a multidimensional fashion. In this, it has some similarity with Roger Martin’s term “integrative thinking,” or the way of finding creative approaches to reconciling two seemingly contradictory notions (such as, from fifty years ago, the thought that high quality and reduced costs could go hand in hand.

“It’s just common sense” doesn’t mean that an answer to a problem is easy – it means that in order to solve it, you have to find the common “inherence” between what you observe with all your senses. It doesn’t mean nod in agreement when the beautifully-formatted spreadsheet is presented; it means to probe the numbers, try to find flaws, vulnerabilities; it means, in the words of my son’s Kindergarten teacher, “Using your resources,” instead of blurting out the first thought that comes to mind.

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Using virtual currency to help police email usage: you can’t be Serios!

Wednesday, April 28th, 2010

total engagementThe recent book “Total Engagement: Using Games and Virtual Worlds to Change the Way People Work and Businesses Compete” by Byron Reeves and J. Leighton Read discusses how the spread of massively-multiplayer online role-playing games (known by the titanic acronym MMORPGs), will affect businesses and people’s work lives. There are a lot of interesting ideas in the book (including the importance of objective scorekeeping and goal achievement to individuals – more on this in another post), but the one that made me sit up in my seat was the idea of virtual currency, especially applied to that blessing and curse of the modern enterprise: email.

The authors illustrate the idea with a story they create about a fictional currency, called Serios:

…Serios are currency that you and your colleagues can use to signal each other that some e-mail is more important than others, and to reward valuable correspondence. When you receive an email with Serios attached, you get to keep them! But sometimes, it’s useful to return Serios to the sender if you find their message valuable….

8:44am: Claire sends her first note to Joe, still skeptical. But she uses the new tool and attaches five Serios to Joe’s note, out of her initial allowance of one hundred, curious to see whether they will get her attention…

5:00pm: At the end of the day, Claire looks at a couple of new features in her inbox and can see all of the Serios sent and received…. She also takes one last look at hte remaining messages to see if she’s missed anything important. But first, she rank-orders the messages in her inbox according to the Serios attached to the notes. The ones with the most currency go to the top….

2:00pm the next day: Claire receives an e-mail from Joe that says he’ll send each team member twenty Serios if they come to a planning meeting. She might have gone anyway, but the Serios are a good signal the Joe thinks the meeting is important…. With this experience fresh in her mind, Claire attaches twenty Serios to one of ther own meeting announcements. Unlike previous invitations, she only invites the people most central to the agenda. “Don’t want to waste Serios on unnecessary invites,” she thinks to herself. (pp 111-112)

The idea is outlined in Chapter 6, and is well worth reading in full. But the idea of attaching a limited resource (Serios) to something that people consider free and unlimited (email) is a stroke of genius. You see, while there has been no shortage of complaints about email inundation (here, here, here, and here, as a sampling), there have been precious few suggestions that hold promise of solving the problem.

If any readers know of a real-world application of virtual currency to email systems, I’d love to hear about it. Hell, I’d love to use it.

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How to escape “The Acceleration Trap”

Tuesday, April 13th, 2010

Yesterday I posted on Heike Bruch’s and Jochen Menges’ article, “The Acceleration Trap,” in the April Harvard Business Review, which examines the effects on companies of a culture of constant change.

I left off before discussing what companies can do to get out of the trap. Before taking that up, I’d like to reflect for a moment on what creates the culture of constant change. As Bruch and Menges discuss, it often follows the success of an initial change program:

Most of the companies in our study landed in the trap after an exhilarating ride. A good example is the European conglomerate ABB. Founded in 1987 in a merger between the Swedish Asea Group and the Swiss Brown Boveri Group, ABB grew rapidly, buying 55 companies in its first two years. After eight years of strong growth, the company began to show signs of excessive acceleration. Acquisitions were no longer well integrated; different parts of the company were competing for the same customers.

I can sense the pressure that ABB’s CEO must have felt after the initial growth. Shareholders, board members, the press, must all have been asking, “Great start! What’s next?” And so the feeling is, not only must we sustain what we’ve started, we must do more. Keep going! Bonuses are at stake, as well as perhaps an even more intense motivation, the needs of the ego.

I’ve sometimes been hard on senior management, but I have to say I can sympathize with the CEO caught in the acceleration trap. And while Bruch and Menges offer prescriptions to help extricate companies from the trap, they don’t provide any easy answers to that harried CEO. Instead, they challenge her to short-circuit employees’ instincts to respond to constant change with frenetic activity and project proliferation:

  1. Stop the action. Ask employees what to stop doing.
  2. Be clear about strategy – especially in terms of what not to do.
  3. Decide how to make decisions – create and adhere to a process to select which projects to do, and which not to do.
  4. Declare the turmoil over – make a pronouncement to employees that the crisis has passed.

Tough medicine? Yes. Try explaining to your board that you have declared a moratorium on new projects for six months so your employees can recharge their batteries. But the alternative may be a culture that has a large list of brilliant initiatives but little in the way of results.

Related posts:
What’s the cost of “change is the only constant”?
Why “Undercover Boss”’s drama is a bad sign for business
Are CEOs powerless to lead?

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Posted in leadership | Comments

HBR article points up the downside of “change is the only constant”

Monday, April 12th, 2010

Change is everywhere. Sustainable competitive advantage is obsolete. To thrive, organizations must continually adapt to new marketplaces, regulations, competitors and technologies. With all that, is it possible to have too much change?

Yes, write Heike Bruch and Jochen Menges in “The Acceleration Trap,” in the April Harvard Business Review. Bruch and Menges assert that in many companies the constant desire for change has overwhelmed the human and organizational capability to absorb it:

[Companies] increase the number and speed of their activities, raise performance goals, shorten innovation cycles, and introduce new management technologies or organizational systems. For a while, they succeed brilliantly, but too often the CEO tries to make this furious pace the new normal. What began as an exceptional burst of achievement becomes chronic overloading, with dire consequences. Not only does the frenetic pace sap employee motivation, but the company’s focus is scattered in various directions, which can confuse customers and threaten the brand.

The authors find three patterns that over-accelerated companies fall into:

  1. overloading
  2. multiloading (assigning too many diverse activities – a diseconomy of scope, perhaps)
  3. the habit of constant change

The third of these is fascinating for how Bruch and Menges describe how employees react to it:


This pattern deprives workers of any hope of retreat for recharging their energy. To compensate, they hold back their efforts whenever they can, even if doing so hampers the company.

This caused me to recall a recent HBR Breakthrough Idea by Teresa Amabile and Steven Kramer, in which they argue that the factor providing the greatest motivation to employees is the simple idea of making progress every day. Amabile and Kramer write:


On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.

One thing I’ve witnessed in “overaccelerated” environments is the frustration of lack of progress. It can mean simply too much to finish (overloading), so many balls in the air that nothing gets done (multiloading), or the despair that accompanies the realization that no matter what happens, there’s another change project around the corner.

Is there a way out of the acceleration trap? Bruch and Menges say yes. But that will have to wait for another post.

Related post:
Top 5 2010 Breakthrough Ideas

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Getting Things Done works nicely with Google Calendar

Tuesday, March 16th, 2010

I gave myself the “Getting Things Done” treatment in 2008 and really valued how David Allen’s approach helped me manage obligations to multiple clients and personal responsibilities as well. Most valuable to me was the “Someday/Maybe” list, which gave me a place to park ideas until there was a time or need to put them to work. Without fail, every couple of months a “Someday/Maybe” item graduates onto my current action list.

One obstacle in adopting the GTD methods was using an online task list. I didn’t want to buy a specialized program for this, so I tried to use Microsoft Entourage to manage the list. But Entourage couldn’t easily set up the (fairly simple) two-level hierarchy GTD defines. So I had to set up the main hierarchy using Entourage and then add the second level as a prefix to the task itself–such as “Online – email Brent congrats on new job,” or “Read/Review – Switch.” And the sort didn’t always work: all the “Read – Review” items were scattered on the list, not clustered together.

Recently I started using Google Calendar, and I’ve been impressed with how functional it is, and how easily it allows you to set up GTD-style task lists. I set up separate lists for “Next Actions,” “Waiting For,” and “Someday/Maybe.” Within the Next Actions list it’s straightforward to set up sections for “Online,” “Computer,” “Calls,” etc. In fact, Google Calendar allows you to add numerous hierarchy levels if you wish to.

Now I could be frustrated to think that a free tool is a lot better at helping me GTD than something I paid real money to Microsoft for. But I’m happy just to have found something that makes it easier for me to stay organized. Google Calendar is it.

Related posts:
The Getting Things Done Treatment

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The myth of the “SuperCorp”

Tuesday, December 22nd, 2009

I had lunch with a friend and fellow consultant last week. I was mentioning some impressive recent reading on innovation that I thought his clients might be interested in. He said this:

That Harvard Business Review stuff is great. I used to read it a lot. But you need a certain corporate culture to be able to do these types of things. You need to have basic management stuff nailed down, you need a clear mission and vision and have that communicated and understood across the company. You have to be good at collaborating.

The places I work with don’t have that. They couldn’t do these innovation processes even if they wanted to.

My friend works with medium-sized local businesses. But I remember my big company days, and the picture wasn’t much different. They couldn’t pull off big management initiatives either (I remember failed attempts at creating a Learning Organization and embedding Value-Based Selling).

I have to admit, I love to read stuff like Rosabeth Moss Kanter’s writings around her book SuperCorp. Kanter writes that companies like Procter & Gamble, IBM, etc., are implementing “management 2.0″ – doing well by doing good, adopting socially-conscious principles and through them are gaining profits and positioning themselves for the future. But in my heart, I’m skeptical.

Here’s some recent writing of hers:

…keeping people employed in good jobs – is a goal of the vanguard companies I describe in my new book, SuperCorp. Companies such as Procter & Gamble, IBM, and others are trying to create innovation and profits through values and principles that enable them to have a positive social impact. They are thinking their way out of twentieth-century assumptions (e.g., that a job must be performed in a facility at specific times and assigned by a boss who observes performance) to create twenty-first century dynamic workplaces.

The Super-corporations want to be employers of choice. Their leaders prefer not to talk about insecurity but instead invoke flexibility. That semantic distinction might be scorned by the uneasily employed, but it conveys a new reality that can have positive as well as negative consequences.

Flexibility shows up in family-friendly policies. Vanguard companies are likely to offer family leave for care-taking, reassign husbands and wives so they can work from the same city, and provide lounges for breast-feeding new babies. They also give employees opportunities for community service, to help them express their values and make a difference to causes they care about, as part of their employment, which is an effort make work meaningful even for those in jobs with a high drudgery quotient.

These companies’ leaders say that the challenges of global change require a shift of responsibility from employer to employee. Employers must give people opportunities and tools to succeed, but individuals must keep themselves ready for the future.

It’s possible that big companies have changed since the years I spent working for them. But to me it’s likely that Kanter’s thesis is valid when you talk to the CEO, but completely invalid at ground level. A big company I used to work for was recently acquired by an even bigger one. And the people I still know there are scared to death, worried about when the ax is coming down next. They’re working hard, but working scared, and that’s not a good environment to get important work done. IBM and Procter & Gamble live in the same world as this other big company. I would be surprised if down deep their employees don’t share the same insecurities and fears (and compensating unproductive behaviors) as my former colleagues.

If the CEO lives in one reality, and the customer-service reps live in another, what difference does it make? It comes down to where the value is added in a business. At large companies, the vast majority of value creation happens at the ground level – the hundred thousand people on the ground floor, or the five thousand first-line managers who support them. Not at the executive level.

And at ground level, I’d bet that many employees of Procter & Gamble and IBM don’t view their company as a SuperCorp. They probably see it much like the clients of my consultant friend – a company with plusses and minuses and a lot of basic things that aren’t fixed yet. No matter what the CEO thinks.

Thoughts?

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Language creates reality, even in business

Monday, December 14th, 2009

One of the most fun aspects of blogging has been re-immersing myself in language. At work, language is just something you use; you don’t scrutinize it. Yet, the (mis)use of language has a lot to do with effectiveness at work or in any collaborative context.

I don’t mean jargon; rather, I’m talking about the slippery language we use when we ask for or respond to requests to do something. Kids, of course, quickly master getting their way through exploiting language loopholes: if I don’t ask my 6-year-old son in precise, unambiguous language to do something he wouldn’t otherwise do (say, make his bed), he won’t do it, and tell me it’s my fault because I wasn’t clear.

He’s onto something there. Too often, I haven’t been clear in what I request from others at work; be they subordinates, peers or other colleagues. I also interpret as a clear “yes” words that don’t, in fact, mean that. (My son is not faultless, however. Too often I’ll blow off requests with half-hearted responses, such as saying “OK,” meaning “I understand you,” instead of “yes, I will do that.”) Imagine this brief conversation:

“I need that report by Friday. Does that make sense?”

“Sure.”

There are two fundamental problems with the above conversation. The requester has not specifically asked her colleague to hand in the report by Friday, and the colleague has not really agreed to anything. Let’s fill out the dialogue as the requester would have it – annotations in [brackets]:

“I need that report by [the end of the day] Friday [and I need you do complete it and get it to me]. Does that make sense? [Will you do that? Are there any questions before you get started?]”

“Sure. [I understand what you want and I will get it to you by close of business Friday.]“

Here’s how the colleague might fill in the blanks:

“I need that report by Friday. [If you don't have anything pressing, could you try to get it to me?]”

“Sure. [I have a lot of work already planned. If I get a free moment I'll try to work on it some. But no guarantees.]“

It’s obvious that this story won’t end happily. And it is replayed again and again, in all companies, all over the world.

If the above has piqued your curiosity, you must read this article in the new Strategy + Business magazine, covering the work of Fernando Flores (”Fernando Flores Wants To Make You An Offer“). Flores is a philosopher of communication who over the past thirty years has worked to understand and shape how people communicate to convey information or accomplish tasks.

The S+B article dwells on Flores’ personal story (former Chilean political prisoner, to successful US-based management consultant, to current member of Chile’s senate), but to me the discussion of his research and consulting work is most interesting.

Flores says, “Human beings are linguistic, social, emotional animals that co-invent a world through language.” And in his consulting practice he helped companies codify their communication to increase clarity of meaning. Central to this is the idea of offers, promises and commitments. Requests must be explicitly phrased as such, and commitments to do something are expected to be fulfilled.

As companies grow in size and scope, and communication becomes more virtual, the ability to hind behind weak requests and noncommittal responses will only increase. Therefore, the need for co-workers to become more explicit about their requests, and responders about their commitments, is urgent. It’s important for companies to recognize that, but I think each of us as individuals can get started, with our without company support.

Your company and career need you to do this. Will you? Is that a promise?

Related post:
Making and keeping commitments: a must
Making and obtaining effective promises – it’s important, and rare

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Another glimpse into the sausage factory that is music industry accounting

Thursday, December 3rd, 2009

I am fascinated by the music business and how it totes up dollars and cents owed to various parties that contribute to making music I listen to every day.

Of course, it’s easy for me to be fascinated, as I don’t have to buy dinner or pay the mortgage with royalty checks from music I’ve made.

Recently, Tim Quirk from the band Too Much Joy posted a recent royalty statement that he received from TMJ’s former label, Warner Brothers. Even funnier (and more depressing) than the invoice itself is Tim’s essay describing how “unrecouped” bands (those that haven’t paid back their advances to the label) are treated and how cavalier (or malignant) the accounting is for those bands.

Tim now works at Rhapsody, so he knows how digital distributors account for the music they stream or download. As a result, he is able to poke holes in the corporate lackeys’ lame stories about why, for example, there are 12 outlets reporting sales for two of their albums but zero digital sales for a third album.

He is pretty humble, though, when he talks about bands like his who haven’t recouped their advances. Too humble, in my view. He takes at face value the label’s contention that they need to pay “money-making artists” like REM before they worry about giving minor bands an accurate accounting of their indebtedness. And, when you look at owing a label over $350,000 for albums you made more than a decade ago, it seems as if worrying about potential inaccuracy of a few tens of thousand dollars is pointless.

On the other hand, if the studios’ approach to measuring bands’ revenues is so cavalier and self-interested, I would have no confidence in the $350,000 number either. Who’s to say that’s accurate? Who’s to say, perhaps, that Too Much Joy shouldn’t be getting checks from Warners instead of hassles?

Here’s my favorite song from the band:

Too Much Joy |MTV Music

Another great reference on the artist’s perspective of the music business is Jacob Slichter of Semisonic’s memoir “So You Wanna Be a Rock & Roll Star.”

UPDATE 12/3: This essay by producer Steve Albini crisply lays out the situation bands face. In the hypothetical example he devises, a new band sells 250K albums and, somehow, still owes the label money!

(Hat tip Felix Salmon)

Related post:
Podcast: Fran Ten of West Indian Girl on the modern music business

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