Making Good Decisions

facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

What makes a good decision?  How would I know one if I saw it?  In the last several weeks I have had a number of conversations with clients about decision making.  Each conversation started out focusing on a different issue yet each came back to “making good decisions.”  One conversation began by discussing “initiative”, several were based around “procrastination”, another was focused on “paralysis by analysis” and the most recent dealt with the fear of making a mistake.  The common root of all of these conversations was the ability, or inability, of individuals to make good business decisions.

Not all good business decisions will turn out, in hindsight, to be the best decisions.  Perfection is not a quality I am familiar with and fortunately it is not a requirement for good decisions.  The goal then is to maximize the likelihood that the decisions made turn out to be the right ones.  How does one do that?

I believe that there are four elements to making good decisions.  My experience is that if these four elements are incorporated into any decision-making process, the final choice will prove to be the best choice much more often than not.

Gather all of the information that is available.  There are two considerations that enter into this element, data and time.   Rarely in any decision making process will 100% of the data be available to you, or at least be available to you in the time frame within which the decision must be made.   The information gathering process is foundational to making good decisions.  Taking short cuts here will skew the results of the subsequent elements in the process.

Know the choices that are available to you.  Too often decision-making processes fall into the “verdict in search of evidence” category.  When we lock onto one option, we automatically lock out all other options, perhaps even the best option.  Let the data identify the options, not the other way around.  Take care to ensure that the choices you identify are feasible and implementable.

Understand the consequences of each choice.  Every decision has consequences, both intended and unintended.  Unfortunately for decision makers, the consequences are usually determined by other parties such as bosses, customers or competitors.  Evaluating the risk associated with each choice is central to good decision making.

Make the best call.  For some, this is the most difficult part of the process and frequently indicates that a less-than-thorough effort was put into the first three elements of the process.  This is where data combined with intuition can be a decision maker’s greatest asset.  Trust your data.  Trust your intuition.  Make the call.

We must also understand that not making a decision is in fact a decision to do nothing.  If the information, choices and consequences support “doing nothing”, then that would be the best call.  However, a non-decision based upon fear of consequences or failure to fully engage the process is an abdication of responsibility and will likely have consequences as well.

Each decision brings with it a unique set of challenges.  Employing a systematic approach to decision making can help ensure that no matter what type of decision you need to make, you can make it unemotionally and with confidence that you have maximized your opportunity to make a good decision.

If your organization is having difficulty with making good decisions, we can help.  Get in touch with us by using the Contact Us tab on the left side of the page or by using the information found on the Contact Info tab.

Posted in Human Capital, Leadership | Tagged , , , , , , , , | Comments Off

A Little Planning Is Better Than None

facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

One of my pet peeves about business planning is the mystique and marvel we’ve created around the process. As consultants we’ve elevated the task to such an intellectual level that many small businesses are either scared away by the process or can’t see the benefit of their effort. Many small companies drift rudderless from year-to-year, sometimes into friendly water and sometimes into turbulent seas, often the result of not having a simple plan. Planning isn’t hard, doesn’t have to take a great deal of time and certainly doesn’t have to be complicated.

Planning is one of the most important processes a business can engage in and yet many operate without one. The same leaders who manage every day without a plan or goals for their business wouldn’t leave home for a vacation without a destination and a map. Perhaps it’s because they can’t see the simplicity of mapping a route to their business future. Many owners have thought about what they want and even a little about how to get it. Unfortunately for most, it’s just in their head and unknown to others who could help complete it.

There’s no question that business plans can be complex for larger organizations. But for the small company it doesn’t have to be intimidating and shouldn’t be avoided. Any planning is better than none at all.

In Lewis Carol’s Alice In Wonderland, a conversation between Alice and the Cheshire Cat illustrates the point.

“Would you tell me please, which way I ought to go from here?” asked Alice. “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where . . . ,” said Alice. “Then it doesn’t matter which way you go,” said the Cat.

Unfortunately, this is the way many small businesses run. Here are three simple tips to get your planning started.

1. Start with something you want to accomplish or change.

Maybe it’s boosting sales, improving operating efficiency or fending off a potential threat to the business. A plan has to start with the question – “What do you want to change or accomplish?” Write your big ideas down and with the help of others prioritize them. Before a business can build a set of strategies or the “how”, they must first establish some measurable goals or objectives which will be the target, or the “what”. Later, these goals will provide the basis from which to evaluate your performance. Without them, leaders won’t know where the business is going or how well it’s performing.

2. Develop simple ideas to accomplish the goal.

You don’t have to be the smartest person in the room. Ask your employees for help. They also want to see the business flourish and often have great ideas. They’re frequently closer to the process or the customer and have great insight that you might not otherwise have considered.

Focus is the key to successful planning and execution. With a little thought you’ll be able to generate a list of ideas for your organization. Pick the top two and focus on them. Ask yourself – “What would it look like if we were accomplishing the goal or didn’t have the problem”?

In order for a plan to be successful it’s important that the people who are going to carry it out understand where the business is going and what it wants to accomplish. Commitment to the process is significantly improved if those working on the action plans are involved in the planning process. Help your employees see the benefit to achieving the goals.

3. Take Action

The plan won’t produce results until it’s put into action. The business manager must translate the big ideas into tasks with a budget so they can be performed. Break down the plan into pieces that can be assigned and completed. Review progress periodically and provide regular feedback on how you’re doing relative to the goal. No battle plan ever survived contact with the enemy and neither will your business plan. It’s important that as you work the plan you remain flexible and adjust it as needed based on new information and feedback. A business plan sitting on a shelf collecting dust makes the planning process an unfortunate waste of time.

Conclusion
Planning for a better future is generally more successful than hoping for it. Wishful thinking is not a strategy. With a little planning you may be able to create your own luck. Planning is not just an annual effort. It can be performed at any time. It’s important to remember that it doesn’t have to be difficult or time consuming. Like so many other tasks a small amount of effort can achieve a great deal of benefit.

It’s up to you what you want to accomplish. Take the opportunity to put some control for success back in your corner with a simple plan designed to fit your specific needs.

If you’d like to talk more about how to make planning simple and useful, respond to my post or use the “contact us” tab on this page to reach me.

Posted in Corporate Finance, Leadership, Operations, Sales & Marketing, Strategy | Tagged , , , , , , , , , , , , | Comments Off

Motivating Beyond Money

facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

I’ve often had the opportunity to meet with individuals who are out of work and networking for their next opportunity. It’s usually not long into our conversation that we’ve covered the basics and they reveal something deeper. They begin to talk with more passion about work and the significance it plays in their life beyond the money. Certainly, everyone needs income to meet their obligations, but it’s clear through my conversations that there’s much more to the job than money. Work has enormous intrinsic value and leaders who recognize that can strategically leverage this to impact the culture of their organization and thereby its performance.

Conventional wisdom makes the assumption that time spent outside of work gives us pleasure and that we work only out of necessity to earn money, which we use in order to achieve the happiness we seek outside of work. To the contrary, studies have shown that the happiest people are not those who don’t have to work, but rather those who enjoy satisfying work. The unhappy among us tend to be those with little sense of contribution to something larger than themselves or those who have nothing to look forward to on Monday morning.

Victor Frankl, an Austrian trained psychiatrist and Nazi concentration-camp survivor, wrote in his 1946 memoir, Man’s Search for Meaning of the role work played in determining who would or wouldn’t survive the concentration camp experience. He maintained that a search for purpose motivates our entire life and has a profound impact on our mental health and even our will to live.

As Frankl illustrated, workers need to labor for something meaningful. Belief in the value of their job is foundational to job satisfaction. Extrinsic rewards must also not crowd out the intrinsic reward of the work itself; that is, pay and benefits must not replace the satisfaction out of a job well done.

Alfie Kohn in his 1993 book, Punished By Rewards, shows that while manipulating people with incentives seems to work in the short run, it is a strategy that ultimately fails and even does lasting harm. Many financial rewards produce short-term boosts of performance and behavioral change which can have unintended conditioning consequences. Motivation strategies that favor pay and benefits, the “extrinsic rewards” for working, can also have a negative effect on job satisfaction by devaluing the “intrinsic rewards” that people care so much about. The reason for this is that people stop seeing a task for its intrinsic value and instead see it as a Pavlovian reward for the task performed.

Companies throughout Wisconsin have had to cut back on their financial compensation and incentive programs in response to tough economic conditions. This has created a great opportunity for leadership to reevaluate their financial and non-financial incentive programs to determine the best combination to lead their company into the future. But not everyone has taken advantage of the opportunity. For some, the old notion that money is what motivates is still a strong influence. For others, developing and implementing systems based on intrinsic job satisfaction requires more time and commitment from senior leaders than they’re willing or able to commit. It’s a case of the cure being worse than the disease.

There are however several simple things companies can do to have a positive impact on intrinsic motivation and job satisfaction. They involve matching the employee to the job, providing leadership attention, and creating opportunities for employees to engage in a way that allows them to have an impact on their environment and the way their work is performed. These simple tasks can help make employees feel that their companies value them and take their well-being seriously.

1. For an employee to feel satisfaction in their work they have to be challenged but the challenge of the work must be matched with her ability. A job with little challenge generates minimal energy or meaningful satisfaction. On the other hand, one that’s seen as beyond their ability to master will result in avoidant behavior and poor results. The consequence to both these situations is low job satisfaction and little intrinsic value in the work itself. The right balance of challenging opportunity and individual efficacy will depend on the individual.

2. One-on-one meetings or other regular conversations focused on the growth and wellbeing of employees can be highly motivational. It says to the employee, “I care about you and am invested in your success.” This makes people feel valued. While large-scale events such as department or company meetings are an important part of a organization’s communication system, they are much less effective and should never be substituted for dedicated one-on-one conversation.

3. A significant contributor to motivation and job satisfaction is a sense of control or influence over the work itself. A chance to lead or be a part of projects is a particularly powerful way of engaging employees in their work. These opportunities also develop leadership skills, which in the long-run, can have positive benefits for the company as well. It makes people feel like they’re part of the solution and part of the company’s future.

Many companies facing high employee turnover have come to accept “leaving for a better opportunity” as a statement reflecting on pay and benefits. Indeed, this can have something to do with it, but people who are not satisfied with their jobs, who lack a sense of purpose, are much more likely to leave even when pay and benefits are satisfactory. Companies who recognize this and intentionality seek ways to build purpose and meaning into their culture will reap the benefit of a more engaged and motivated workforce.

Posted in Human Capital, Leadership, Operations, Strategy, Training | Tagged , , , , , , , , , | Comments Off

The Importance of 360 Degree Feedback

facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

Most people understand that the need to grow as a leader is never ending. Understanding what they need to focus on is a little more difficult. There are many ways in which to do this, but I believe the best way is through a 360 Degree Feedback process.

What does 360 degree feedback mean?
In a 360 degree feedback process, an employee receives feedback from his immediate work circle. It includes direct feedback from subordinates, peers and superiors, and in some cases even from the external sources like the customers, suppliers or other important stakeholders.

Why is 360 degree feedback important?
1. It provides an employee an opportunity to receive performance feedback from his team, supervisor, reporting staff and his customers.
2. It allows an individual to understand her effectiveness as an employee and as a team member.
3. It helps employees recognize their strengths and areas where they can improve.
4. It helps employees in developing a proper plan of work.
5. Focuses on personal and career development.
6. Helps create personalized action plans.
7. Gets the employees together on the goal and work better as a team.
8. It acts as a great motivator for change.
9. It helps an employee to develop professionally and be effective at work.

If this makes sense to you, please contact me or hit the Contact Us tab.

Posted in Human Capital, Leadership, Operations | Tagged , , , , , , , | Comments Off

Leading Successful Change in a Financial Turnaround

facebooktwittergoogle_plusredditpinterestlinkedintumblrmailby feather

In Aesop’s Fables is the story of a fox that tried in vain to reach a cluster of grapes dangling from a vine just out of reach above its head. The fox lept high with all his might but after several unsuccessful attempts gave up and said to himself, ‘‘These grapes are sour, and if I had reached them I couldn’t have eaten them anyway.” It’s the source of the phrase ‘‘sour grapes.” It also illustrates the distressing mental state of conflict or anxiety when people’s actions are inconsistent with what they believe. The fox’s willingness to stop trying clashed with his knowledge that the grapes were tasty. By changing his attitude toward the grapes he rationalized his behavior. The tension individuals feel in the financial recovery of a business motivates them to either change their behavior or change their belief to avoid the distressing feeling. The implication of this in situations from post-recession recovery to life-saving turnarounds is that, to be successful, it’s critical that the organization go beyond behavioral compliance with recovery actions to commitment, through genuine belief, to a new way of doing business.

There is a direct link between management’s ability to gain that commitment and the underlying culture of the organization. Corporate culture is the belief system of a company revealed through the collective actions, behaviors, and rituals of the individuals within it. It is not enough to have the right product, operations or qualified management to succeed in a recovery. Every company going through radical change must have the right culture and it’s the responsibility of management to bring the culture into alignment with the new vision and priorities of the company. If the workforce believes in the overall purpose and direction of the change, they will be willing to modify their individual behavior to serve that purpose. If they don’t, they will resolve the conflict between what’s being asked of them and what they truly believe by rationalizing their old behavior, slowing or possibly dooming the change. The key then is to enable the workforce to see that the pain and inconvenience of change is far more attractive than to rationalize and remain in the current operational state.

To feel comfortable about change and to carry it out with enthusiasm, people must understand their role in the unfolding drama of the turnaround and believe that it’s worthwhile and in their best interest to play a part. It isn’t enough to tell employees that they’ll have to do things differently. Anyone leading a major change program must take the time to think through the “story” behind the change, what makes it worthwhile and explain it in such a way that it creates an attraction more compelling than the status quo. For everyone involved, their contributions must make sense to them at an individual level.

Support for the changes must not only come from management but also from leaders in the informal groups with which people identify. The support of informal organizational leaders, those people who exercise influence without positional authority, and the groups that surround them must be earned if the desired change is to have a deep and permanent influence. If influential individuals complain that “we’ve heard this a thousand times before and nothing happened,” others will be inclined to rationalize the current behavior and avoid the needed change. Change must be understood and made meaningful to groups at every level of the organization to achieve sustainable traction. 

Many change programs make the error of exhorting employees to behave differently without teaching them how to adapt general concepts to their individual situation. The company may urge them to be more “customer-focused” but if little attention was paid to customers in the past, they will have no idea how to act now or what successful “customer focused” actions looks like. Likewise, new reporting structures, management and operational processes, measurement procedures and financial and non-financial reward systems must be consistent with the behavior that people are asked to embrace. When a company’s goals for new behavior are not reinforced, employees are less likely to consistently adopt them.

Summary:

Financial distress is not just about wrongdoing at the top. Rather it’s about failed performance at all levels of the organization. Therefore, changing the culture and thereby the minds and belief systems of individuals must be at the core of any turnaround effort. When companies are unable to change their cultures, they cannot expect to be successful in responding to the radically changing business conditions associated with a financial recovery. Company management needs to proactively engage in a deliberate culture building process and not let it evolve on its own. It is critical that the desired values, behaviors, performance standards and leadership requirements for a successful recovery be communicated clearly and often. To change behavior throughout an organization, it isn’t enough to ensure that people at the top are in line with the new ways of working; role models at every level in the company must consistently “walk the talk.” In any recovery situation, culture transformation is a necessary prerequisite to sustainable change. Management must realize that changing corporate culture is not one thing they do in revitalizing a company, it is everything they do.

Posted in Corporate Finance, Human Capital, Leadership, Operations, Sales & Marketing, Strategy, Training | Tagged , , , , , , , , , , | Comments Off