Send the right message
FedEx, the company trusted by millions of people to deliver their Christmas presents to loved ones, recently announced some belt-tightening initiatives. That’s the real tragedy of the economic downturn, that even great companies get affected negatively. You get most things right, avoid the icebergs and get the ship headed in the right direction, and out of nowhere you get hit over the head with a recession.
There’s an old cliche that goes “A rising tide raises all boats”. For the purposes of this post, I’ll turn that around to say “A receding tide exposes your Leadership”. Let’s look at how FexEx’s has provided a business leadership lesson for dealing with this recession.
What did they do?
While FedEx income and earnings per share beat analyst’s expectations and were up over the same quarter last year, much of the gain could be traced to the drop in fuel costs and FedEx CEO Fred Smith acknowledges that “our financial performance is increasingly being challenged by some of the worst economic conditions in the company’s 35-year operating history”.
So what was their response?
Instead of simply laying off workers, Fred Smith exhibited some true leadership and character by:
- Taking a 20% pay cut, and additionally reducing senior executive salaries by up to 10%
- Suspended 401K company matching contributions
- Implemented a hiring freeze and reduced labor hours
- And yes, reduced the workforce; however no cuts to hourly workers
(Credit CNN.com for quotes and data)
The Leadership lesson
While not highlighted in the CNN article, the piece I heard indicated that the other measures FedEx took greatly reduced the number of jobs that were cut. I think the other great benefit of the approach FedEx took is the message it sends to employees.
A few years back I was part of a very similar program. The company I work for is a non-profit, and while our funding sources are very diverse, we found ourselves one year facing a rather large cut to one of our funding sources. Our President’s response was a real leadership lesson for me.
Yes, we cut some staff. However, our President also instituted an across the board salary reduction for all employees. The leadership lesson was that from the top down management took a larger percentage cut than the rest of the employees, with our President taking the largest percentage reduction of all.
What was the impact?
First and foremost, we were able to weather the economic impact and come out the other side stronger than before. I predict the same will happen to FedEx, and probably lots of other well run companies.
More important I think, as I mentioned above, was the message that was sent to employees; a message I took as two-fold:
- We value you enough to take some bitter medicine for the good of everybody, and
- Our leaders are going to contribute more, as they should
Ultimately, while there was some mumbling in the hallways, I think most employees appreciated and understood the shared belt-tightening. The effect of the program, and how it was communicated by our President, was that “we’ve encounted some hard times, we’ve made some hard choices, and now it’s time to move on and get back to work.” From what I gathered talking to my team and employees at large was that:
- The quick, decisive action made them feel better about their job security
- The top-down, across-the-board pay cuts clearly sent a message of “we’re all in this together”
Final Thoughts
There has been countless articles written discussing these “challenging times”, “how to survive the economic crisis”, etc. etc. I do not intend to minimize in any way the seriousness of the business environment we are currently in. Let’s keep our heads about us though - it still comes back to Leadership. I would submit that leadership skills of character, courage, decisiveness, and yes, compassion will serve us all well not only to weather this storm, but come out stronger on the other side. If you do not have these skills in abundance on your leadership team, now may be the time to make some changes. One outcome of the unpleasant employment situation is the abundance of great talent available.
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Turning Buzzwords into Reality
As I reported on previously, last week I had the opportunity to moderate a panel entitled “Using Web 2.0 to Drive Top-Line Growth.” The panel did a great job, with several important themes coming out of the panel discussion and the networking afterwards.
We distribute feedback forms at every meeting and while the feedback was overwhelmingly positive, there were a couple obvious detractors. One comment in particular, caught my eye:
This Web 2.0 stuff is just too touchy-feely for me. It reminds me a lot of all the hype around the Internet pre-2000 and we all know what happened there…
Great comment, and one that was the genesis of this post. In truth, I had been thinking something along these lines for a while now. Not that Web 2.0 is a boom headed for a bust, but rather what is the fuss really all about? Skipping ahead to the answer (or at least my answer), it’s a forest for the trees paradox: too many people focus on the trees not the forest. It’s not about the tools, it’s about what they can do. And I contend that if you can get past the “touch-feely” nature of the tools, all Web 2.0 is doing is bringing back the good ‘ole days of doing business.
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IBD’s 10 Secrets to Success
Attending a luncheon presentation at a private club downtown last week, I arrived a bit early. That happens often to me. What can I say - I was raised in the country; it took at least 30 minutes to get anywhere, usually more like an hour. So, especially for meetings very close to me, I’m typically a bit early. I suppose I could have worse habits.
The club had copies of Investor’s Business Daily laying out and I started flipping through one. In their Leaders & Success section, they had a sidebar article on their 10 Secrets to Success. In addition to discussion entrepreneurial qualities on this blog, I had also planned on examining Leadership traits, so this little article was perfect timing.
Drawing upon “years analyzing leaders and successful people in all walks of life,” here are their 10 Secrets to Success:
- How you think is everything. Always be positive. Think success, not failure. Beware of a negative environment.
- Decide upon your true dreams and goals. Write down your specific goals and develop a plan to reach them.
- Take action. Goals are nothing without action. Don’t be afraid to get started. Just do it.
- Never stop learning. Go back to school or read books. Get training and acquire skills.
- Be persistent and work hard. Success is a marathon, not a sprint. Never give up.
- Learn to analyze details. Get all the facts, all the input. Learn from your mistakes.
- Focus your time and money. Don’t let other people or things distract you.
- Don’t be afraid to innovate; be different. Following the herd is a sure way to mediocrity.
- Deal and communicate with people effectively. No person is an island. Learn to understand and motivate others.
- Be honest and dependable; take responsibility. Otherwise, #1-9 don’t matter.
I think this is a great place to start a discussion of Leadership qualities and some great advice there to think about and compare to your current approach to life and business.
How are you doing?
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Conference take-aways: Strategic Planning and 1 Question Survey
I’m at a National Business Incubation Conference (NBIA), Monday through Wednesday this week, and this is keeping me very busy. The Weekly Reader may also be in jeopardy as I’m scheduled to attend an after-hours event Thursday night after I get home.
To while away the useless hotel hours, I thought I’d post a couple good takeaways from my session today.
One-page Strategic Plan
Just having a one page strategic plan may be the real takeaway for some folks, and it certainly is something to consider. The intent is not that your entire strategic plan only takes one page, the message was being able to communicate your plan to your Board and your Stakeholders on one page.
The presenter knew what he was talking about, managing a 55 acre Innovation Center campus. The real value of the session was the actual one-page form that he uses to visually communicate his strategic plan to his Board. I can’t share that document here, but I can describe the elements that make up the overview.
The core data elements build from the top down. For each level of the overview, I’ll list the “why”, the “what” and the “when”:
Foundation : Core Values and Culture : Forever
Why do we exist? : Purpose and Passion : Life of Leader
Where are we headed? : Mission Milestones : 3-5 Years
What do we do to get there? : Annual Goals : Annually
How do we do it? : Big Actions : Quarterly
When does it get done? : Schedule : Weekly
What takes responsibility? : Work : Daily
Pretty basic stuff, but the beauty was in the simplicity of the presentation. If I get the document after the conference and am allowed to share it, I’ll post it.
Net Promoter Score
The other real gem of the session was my introduction to Bain & Co.’s Net Promoter Score (NPS). I had never heard of it before, but it was introduced as a highly reliable one question survey indicative of the perceived value of your services. I don’t know about your clients, but entrepreneurs are notorious for not completing surveys. Actually, they are notorious for not responding to any requests for information, so any way to get a highly reliable score corresponding to the quality of our services by asking one question, was definitely intriquing.
The NPS works like this. You ask your client to rate your services on a 0 to 10 scale. Ratings of 0 through 6 are classified as Detractors. Ratings of 7 or 8 are ignored. Ratings of 9 and 10 are classified as Promoters. Add up your Detractors and Promoter scores. Your Net Promoter Score is then figured as:
Promoters - Detractors
Our instructor didn’t really have much guidance on what to shoot for with your NPS, nor industry benchmarks. He did say that when he started using the NPS in his incubator, his score was around 20% and he has since raised it up to 80%+. He also shared that best in class scores are typically taken to be 70-80%. Doing a quick Internet search I found this article with some benchmarks from a few sample industries.
At the very least, the NPS is an extremely simply way to collect an important qualitative evaluation of your program. Comparing to your industry benchmark may require extra research (or purchasing Bain services or database).
That’s it for today. Off to room service and Monday Night Football. Let’s hope tomorrow brings another thousand points…
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7 steps to stop team finger-pointing
Another busy weekend and I didn’t get to the article I wanted to write for today. However, this little gem just came through from Harvard Business Publishing. The article, written by Marshall Goldsmith, uses the current economic crisis to launch a discussion on how to get teams focused on moving forward versus finger pointing.
I’ll just list the basic seven tips here, you can read the full article for the extended explanations. In perfect Marshall Goldsmith fashion, the explanations are short, easy to understand, and packed with value.
- Encourage everyone on your team to remember four words - (here’s a hint, the four words are “judge less, help more”)
- Try to get team members to focus on a future that they can impact
- Try to get people to take responsibility for their own behavior
- Ask each person to reflect on the question, “What can I learn from this crisis?”
- Ask everyone on your team to reflect on the question, “What can we learn from this crisis?” (extra credit now - what one word is different from #4?)
- Encourage each team member to avoid speaking when angry or out of control
- Before speaking don’t just ask, “Am I correct?” - ask “Will this help?”
I would suggest that these seven steps are good anytime, not just in times of crisis. What a more positive workplace we would all work in if everyone embraced the spirit of these steps all the time.
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A Personal Branding primer
I’ve mentioned the topic of Personal Branding a few times before, but a recent post (along with a free download) on Chris Brogan’s blog got me inspired to write a primer describing my views of this concept. I’ve been hearing the term more and more, maybe you have too, so I’ve been not only giving it some thought, but reading with interest the posts I can find on the topic.
In this post I’d like to share my thoughts on the two dichotomies of personal branding, offer an overview of what a personal brand is and how to create one, and offer some simple tips on getting started supporting your personal brand.
This is an evolving concept that I don’t think is fully fleshed out in anybody’s minds. Therefore while I do believe this will be an informative, even helpful article for most of you, please remember that the topic of personal branding is a relatively new one so if it is a topic of importance for you, please do not rely solely on this article to form a course of action.
You may also notice that I have this post filed under the Leadership category. Not so much a something you do to lead, but rather something that leaders should consider doing. Likewise, even if you are not an strategic leader in your company, personal branding may still have relevance in your personal leadership development strategy.
As I have written this article, it has become apparent that there are more elements to even a primer on personal branding than can realistically be covered in one article. Therefore, I think this will turn into a four part series. Stay tuned for upcoming additions to this topic. Also be warned this is a fairly lengthy article.
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What Leadership qualities are you looking for in our next President?
I just read a fantastic article over on the Harvard Business Publishing site. They pose the question I repeat as the title of this post. What leadership qualities are you looking for in our next President.
It has long been my contention that political elections are largely marketing events. At the local and maybe regional level one stands a chance of potentially knowing something of value about a candidate that could be useful in forming an actionable opinion. At the Federal level, I truly believe this is next to impossible. Therefore, political campaigns are less about qualifications and character, and more about message and image. Again - just my opinion, feel free to rebut.
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So does this mean there are “Value Leaders”?
I’ve had a hard time finding good Leadership blogs. Either they are way to focused on selling their products, or they are simply mouthpieces for a Leadership “celeberity”. If you have a good Leadership or Excellence blog you could recommend, please leave me a comment.
One of the blogs I have found that I like is called The Practice of Leadership. The blog, written by George Ambler, is George’s way of thinking out loud on the topic and just having fun. What a great approach.
In citing a MIT Sloan Management Review article, George recently wrote an post entitled “Searching for Growth Leaders“. Growth Leaders, as defined by the MIT researchers, are:
… managers who can generate organic growth to “find new streams of revenue without always resorting to acquisitions.
I find two aspects of the article to be of particular interest; first the qualities listed, and second the mindset.
Qualities of Growth Leaders
The qualities of Growth Leaders listed in the article are:
- Rich in experience
- Changing the rules…
- …but managing risk
- Preferring people to data
- Pragmatic idealists
What I love about these qualities is the human/team orientation and the quite wonderful phrase “pragmatic idealist”. This is always what I have considered myself and it’s nice to actually see someone else talking this way; especially in the context of Leadership. As we develop our own sense of Leadership on this blog, we will have to remember these qualities and make sure they are taken into consideration.
George’s article presents detailed descriptions of all the qualities and I highly suggest you jump over to it and give it a read.
“The Virtuous Mindset”
What I like even more than the qualities listed, is this sense of growth leadership being tied to a virtuous cycle, whereas a fixed mindset is tied to a vicious cycle. While I’m not sure it’s quite that simple, I do believe that a virtuous cycle, one that embraces people and sees life as a journey, can be a solid foundation for growth.
What we see here is growth leadership tied to openness, understanding people, competency, and the willingness to take a risk. Much of this is common to all article written on entrepreneurship. What stands out for me is the almost “new age” aspect of broad life experiences and understanding people as a foundation for not only Leadership but Growth Leadership.
Again - a good, quick read that I highly recommend.
