Goals Gone Wild': How Goal Setting Can Lead to Disaster

In early 1969, just as the U.S. was preparing to reach John F. Kennedy's lofty goal of sending Americans to the moon, the famed Ford executive Lee Iacocca gave a similarly ambitious mandate to his team of engineers.

Faced for the first time with competition from low-cost, high-mileage foreign imports, Iacocca set a specific target: Ford would design a new automobile that weighed less than 2,000 pounds and sold for under $2,000, and it would be on the showroom floor in time for the 1971 model year. What resulted was a mad dash to create the Ford Pinto.

The rush to roll out the Pinto had lethal consequences. Common-sense safety checks took a backseat to meeting Iacocca's deadline. In particular, engineers failed to examine the decision to place the Pinto's fuel tank only 10 inches behind the rear axle. When the Pinto was rear-ended, it often went up in flames. Fiery rear-end crashes caused 53 deaths, numerous injuries and a string of costly lawsuits.

It was a valuable lesson about the hazards of setting goals. In pursuit of such mandates, employees will ignore sound business practices, risk the company's reputation and violate ethical standards. This lesson, however, has not been absorbed by corporate America. To the contrary, ambitious goal setting has become endemic in American business practice and scholarship over the last half-century. Goals have pervaded industries as diverse as automotive repair, banking and information systems, even spilling over to the debate on how to improve America's public schools.

Yet new research by Wharton operations and information management professor Maurice Schweitzer and three colleagues documents how corporate goal setting can cause more harm than good. The paper, titled "Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting," was co-authored by Lisa D. Ordóñez from the Eller College of Management, University of Arizona; Adam D. Galinsky of the Kellogg School of Management at Northwestern University, and Max H. Bazerman from the Harvard Business School. Their work appears in the February issue of the Academy of Management Perspectives.

"We take a strong stand in this article, because we are pushing against the pervasive use of goal setting in practice and a very large body of literature that has endorsed goal setting. We argue that managers and scholars have grown complacent in their endorsement of goal setting ... often [neglecting] the harmful effects," Schweitzer says. "We argue that goal setting is wildly over-prescribed."

The paper is full of cases in which goal setting had negative and sometimes disastrous consequences for a company. Indeed, executives and business experts in those cases frequently failed to realize the prominent role that overly ambitious targets played in causing the eventual problem. One famous case that Schweitzer and his co-authors relate is the storied 2002 collapse of the energy-trading giant Enron. They cite literature noting that the once high-flying Houston-based firm used goals and an incentive system for its salesmen that was based solely on the volume of revenue that they generated -- and not whether the actual trades were sound or profitable -- which became a key factor in Enron's implosion.

The authors found that goal setting has become practically institutionalized in American corporations, backed up by a persuasive body of literature over four decades arguing that employees perform better when challenged to meet specific targets as opposed to asking them to simply "do their best." The leaders of this movement are two renowned organizational psychology experts, Edwin Locke of the University of Maryland and Gary Latham of the University of Toronto, who wrote: "So long as a person is committed to the goal, has the requisite ability to attain it, and does not have conflicting goals, there is a positive, linear relationship between goal difficulty and task performance."

Schweitzer suggests that goal setting has become so ingrained that the practice is greatly overused. "We argue that there are some contexts where goal setting is appropriate, such as when tasks are routine, easy to monitor and very easy to measure. In practice, many domains are ill suited for goal setting."

'Mistakes Did Occur'

One well-known example took place at Sears, which in the early 1990s set a specific sales target for its auto repair staff of $147 per hour. In order to meet management's goal, however, mechanics began to perform unnecessary repairs or overcharge customers, which triggered a major customer-relations crisis for the giant retailer. Edward Brennan, chairman of Sears at the time, later admitted that the "goal setting process for service advisers created an environment where mistakes did occur."

Why does this happen? Schweitzer and his co-authors identify a series of problems that they say are linked to the overuse of goal setting, especially when the targets are either too specific or too challenging. For example:

• Goals that are too specific often lead employees to develop such a narrow focus that they fail to recognize obvious problems unrelated to the target. According to the authors, highly specific goals may cause workers to sacrifice safety for speed -- as in the case of the Ford Pinto -- or pursue misguided end results, as was the case at Enron. A typical problem is the sacrifice of quality in the interest of quantity, they note, citing the example of universities that require tenured professors to publish a certain number of research papers in particular journals, but without careful scrutiny of the quality of the work.

• Likewise, too many goals have what the authors consider an inappropriate time horizon. They refer to the well-known example of managers who are pressured to meet quarterly earnings goals, causing them to ignore long-term strategic problems. The reverse side of this practice is that employees also have a tendency to ease up when goal horizons are set too low. The paper cites a 1997 study of New York City cabdrivers who found that on rainy days, taxis tended to disappear from the congested streets because drivers met their fare target early in the day and went home, rather than working longer hours to make additional income.

• Workers with highly specific and ambitious targets will engage in risky practices in order to meet them. The authors note the case of one of the nation's largest banks at the time, Continental Illinois, where in 1976 the CEO issued a mandate to dramatically expand the loan portfolios to match those of some rival banks. The bank aggressively pursued new loan customers and even bought packages of high-risk mortgages from smaller banks, which eventually caused Continental Illinois to fail.

• Unethical behavior is one of the more obvious pitfalls of overly ambitious goal setting, with potentially some of the most catastrophic consequences. This can happen in a number of ways -- such as the safety shortcuts at Ford or the bilking of auto-repair customers at Sears. The authors also note incidents where employees offered bogus results to claim that a target was reached, such as when employees falsified sales reports to meet their quota at the vision-products company Bausch & Lomb.

The irony, says Schweitzer, is that a lot of this specific goal setting is unnecessary. Research has shown that employees have a stronger intrinsic motivation to do a good job than their managers tend to give them credit for. He points to research by Stanford University organizational behavior expert Chip Heath, who "found that people tend to think that other people need extrinsic rewards more often than they really do.... To us, our work is interesting and meaningful, but we tend to think that other people come to work because of money."

Beware the 'Hedonic Treadmill'

In fact, the authors argue that this failure to recognize the value of simply doing a good job can cause managers to instead set goals and rewards that harm intrinsic motivation and place employees on a "hedonic treadmill." The notion of a hedonic treadmill, says Schweitzer, "is that people never 'get' to where they are going. For example, people constantly pursue happiness, but don't get there. They keep thinking that the next promotion, the new car, the salary raise, etc. will make them happy. They get the promotion, and that makes them happy for a time. Then they adapt and mistakenly think that it's the next promotion that will make them happy.

"People may be motivated by goals. But these goals can crowd out intrinsic motivation, so they will need more goals to motivate them in the future."

Schweitzer and his co-authors point to other negative consequences from overly specific numeric goals. For example, workers tend to lose their focus on learning new skills in favor of using tried-and-true methods to meet their quotas. In addition, companies that set targets for individual workers can create a culture of competition in which workers tend to shun teamwork in problem solving.

Despite all this, the use of goal setting has spread to other areas outside the corporate world. Arguably the best-known example is the federal education program known as No Child Left Behind that was enacted in 2001; it links government aid to highly specific performance targets for students based upon standardized test scores. Critics of No Child Left Behind say the program forces teachers to focus narrowly on what will be asked on those tests, ignoring other critical skills. There have also been several scandals involving falsified test scores and other forms of cheating. Indeed, the allegations in the classroom are quite similar to the problems that Schweitzer and his colleagues found in the business world.

"The 'No Child Left Behind' idea is compelling -- after all, who wants to leave a child behind?" Schweitzer says. "But the reality of this program is that it is fundamentally flawed. It is very difficult to monitor education, and this program narrows the focus of teachers in a domain that requires cooperation, innovation, broad thinking, high ethical standards and, we would hope, intrinsic motivation."

Schweitzer believes one reason that goals are overused is that we focus too much attention on the individual. When things go wrong -- for example, following the collapse of an Enron -- we tend to blame specific individuals rather than look at the broader culture established by top managers. The best-known example of this problem comes from the U.S. military and the well-documented detainee abuse at the Abu Ghraib prison in Iraq, he says. These cases of abuse were blamed on low-ranking soldiers -- "a few bad apples" -- and not on the broader directives from the Pentagon that created the climate of corruption. "What happens is that people neglect to appreciate the importance of the environment."

The authors suggest that goal setting should be undertaken modestly and carefully, with a focus more on personal rather than financial gain. They also make the case that much more research -- and more skepticism -- is needed about the practice of goal setting. "Rather than dispensing goal setting as a benign, over-the-counter treatment for students of management, experts need to conceptualize goal setting as a prescription-strength medication that requires careful dosing, consideration of harmful side effects, and close supervision," the authors write. "Given the sway of goal setting on intellectual pursuits in management, we call for a more self-critical and less self-congratulatory approach to the study of goal setting."

So what are your thoughts?

Are HR People Terrified of Empoyee Friendly Legislation?

I read this blog post and I have to tell you it is exactly how I feel so I cut and pasted it directly verbatim. Read it carefully.

I talk about a lot of things on this blog but I rarely touch on legislative issues that will be impacting our trade. I keep myself well informed but most people aren’t coming here to get their employment law update. If you are, I am sorry because you’ve probably been in a state of perpetual dissatisfaction.

One thing I have noticed is that many of the practitioners in Human Resources are thoroughly against most employee friendly legislation. The dominant professional organization in the space (SHRM) has taken stands that nearly mirror the US Chamber of Commerce (a huge pro-business organization). Most of the HR bloggers I’ve talked to and interacted with are willing to speak out for pro-business interests.

Taking The Fight To The EFCA

Kris Dunn (of HR Capitalist) and much of his crew over at Fistful of Talent have taken on the torch most recently on the subject of the Employee Free Choice Act (EFCA). He has an older but still great article about the act on Workforce. Some have been informative, some have been funny and others could probably be classified as tedious. There are only so many articles I can read about the EFCA before my eyes start rolling back in my head and I die in boredom.

Let’s not mistake my feelings on the possible legislation versus the commentary: the EFCA, as written, is a big stinky pile of garbage. It is like the unions wrote out their wish list (and then some) and tried to cash it in like they were Bill Gates at an ATM. It could be severely damaging if passed. I am doing what I should be doing as a citizen: I am writing my representative and senators (no matter how little they actually care about my opposing viewpoint), I am voting appropriately and I am sharing my feelings on the law with all of you.

Missing The Greater Issue

Let’s face it though, I don’t have much influence on national politics (yet!). I have always believed that effective people focus on what they can impact and change. I can speak to people I know in HR about this issue that I know but still, it is going to lack effectiveness.

Let’s imagine that the EFCA passing as written is inevitable. It may very well be given large Democratic majorities at the federal level. So if the law passes, how would your company react? Would employee relations become an even bigger priority? Would you be looking at compensation and benefits more closely?

If we spent some of the intense energy used on trying to prevent EFCA from passing and instead worked on ways within our own companies to make it inconsequential whether or not the act passes, how much further along could we be? Instead of speaking out time and time again about and hammering the same points about the garbage law, articles could focus on how to make your business EFCA proof. And we could enact policies in our own organizations about pay transparency and a smart, progressive employee relations policy that takes all of the wind out of union bosses trying to recruit our employees to sign up.

Pending Pro-Employee Legislation = Pro-Activity Clue

So HR often gets a bad rap as a reactive bunch. It doesn’t have to be that way. One of the first and really easy things you can do as an individual or department is look at the pending employee legislation. If you look past the legislation, you’ll see a list of complaints that some of your employees may have had: my FMLA leave was administered incorrectly, my pay is different than my co-workers and I don’t know why, and why does this person get a new chair and desk while I’ve complained about my back and neck hurting?

You can use pending legislation as a check list. How effective is our FMLA administration? How do we examine whether someone is being paid correctly? And your organization can address these things now, make them right and prevent serious problems down the line.

And that’s not to say that good companies don’t get nailed for trying to make good faith efforts with bad laws. Admittedly though, many of the problems revolve around companies that can’t keep their own house clean and that railing against new legislation is a convenient crutch for fixing bad internal practices. I think with the new administration, a priority should be given to reexamining internal policies and pushing forward in the name of prevention and pro-action.

directly from: http://www.yourhrguy.com/2009/02/02/are-hr-people-terrified-of-empoyee-friendly-legislation/

How Good Are Your Connections/Networking?

You say, " what is he blogging about this for, right". I ask this question because of the changing economic tide. Human resources professionals are arguably the worst people when it comes to networking consistently. I look at my own track record and I can tell you it is abysmal. So, it makes good sense for you to reestablish your connections, network feverishly, and keep in constant contact with them. For those who you have left by the wayside, reestablish those connections. I would openly suggest Linkedin as the best source but there is Twitter, Zoominfo, Spoke, and may more.

So get with it and CONNECT, you never know what the next day will bring in today's employment market.

What Differentiates the Leading-Edge HR Executives?

Last week at the Strategic e-HR Conference, Tod Loofbourrow, Chairman of Authoria, shared his view about those HR executives that “get it”.  I think they were spot on.  I am paraphrasing them, but the three critical skills he sees as differentiating progressive CHROs from the rest of the class are:

• Business acumen.  They have a true understanding of their own company, its business, the products and the industry it operates.  Too many HR executives don’t even know the products their company sells and at what price or margin.
• Analytical mindset.  They think in numbers not emotions.  They leverage data to make decisions and measure their business proactively.
• Accountability.  They are will to make hard, critical decisions independently and will to put their proverbial “ass on the line”.  Accountability also means they have a favorable reputation within the organization and can garner support throughout.
• They know what they don’t know.  This really means they know the right questions to ask and surround themselves with smart people, experts and knowledge. (yes, I said 3…the fourth is mine).

Does your HR executive have these skills?

Has Google’s Fabled Recruiting Model Lost Its Luster?

A couple of weeks ago, with unique transparency, Google’s VP of People Operations Laszlo Bock  announced they were laying off 100 recruiters (approximately 25% of their recruiter headcount).  When I first read the statement, my first thought was, “…do they really have over 400 internal recruiters?” 

Prior to the announcement Google’s recruiters accounted for approximately 2-4% of the employee population (not including outside contractors and agencies).  Sure this announcement makes sense since most companies hiring is destined to be substantially lower in 2009.  But does this announcement have more significance?

Jason Corsello has written about Google’s recruiting process in the past.  Interestingly, now comes news that all is not utopia at the Googleplex.  According to a private Google Group asking ex-employees why they left…

“The thread shows a brutal honesty about what it’s like to work at Google, at least from the point of view of employees who were unhappy enough to resign. Top amongst the complaints is low pay relative to what they could earn elsewhere, and disappearing fringe benefits seemed to elevate the concern. Other popular gripes - too much bureaucracy, poor management, poor mentoring, and a hiring process that took months.” 

Now that Google is no longer the high-flying company where stock options would quickly make you millions of dollars, it is well apparent that their recruiting model needs to evolve.  Google still has one of the strong employer brands but, from my viewpoint, the recruiting model needs to evolve in scale, efficiency and effectiveness with tight alignment to their onboarding and talent management strategy.

Has Google’s exhaustive recruiting process now become a liability?

Written by Jason Corsello

Employee Free Choice Act

This pending legislation will put a strain on HR professionals who have been free and clear of union activity. The pending legislation that President Obama has, during the campaign trail, endorsed will certainly focus the HR involvement in the business if it is not there already.

HR will have to operate differently and CEOs will be forced to get the much needed help from human resources. So the question is, are the HR departments prepared for this and have they been trained or retrained to deal with this?

What is your take on this and for as full picture, please read the lead article in Workforce Management's January issue. Let me know your thoughts at wgstevens2@gmail.com .

Half-a-Million Job Cuts: Is There a Strategy Behind the Layoffs?

One month into 2009, job cuts by corporations have become a major news story around the world. In one week alone, almost 100,000 jobs were eliminated. These included 20,000 layoffs at NEC, 19,500 at Pfizer, 15,000 at Metro, 10,000 at Boeing and 8,000 at Sprint Nextel. Thousands more from Starbucks, Ericsson, Kodak, Philips, Microsoft, Caterpillar, Home Depot and others added to the total. According to an estimate by outplacement firm Challenger, Gray & Christmas, layoffs in January totaled 241,749, up 45% from December and the highest monthly number in seven years. In response to this situation, U.S. President Barack Obama pushed even harder for passage of an $819 billion economic stimulus plan. "The most important number for this recovery plan is how many jobs it produces," said Rahm Emanuel, Obama's chief of staff, "not how many votes it gets."

Unfortunately, more cuts are probably on the way, according to economists watching the situation. "From what we are seeing, the fourth quarter was breathtakingly weak for companies,' says Christopher Portman, a senior economist at Oxford Economics, which builds macroeconomic models for banks and governments around the world. "In terms of the global economy, 2009 will be the worst year since World War II and even since the 1930s. I don't know that the job losses we have seen so far show the full picture. Unemployment does lag [behind other indicators of economic performance], and even after we hit the bottom of this downturn, the job loss numbers will continue to rise."
Beyond the individual trauma of lost jobs and wages amid a global economic crisis, the cuts are notable for their depth and breadth. Since September 2008, major companies world-wide have cut some half a million jobs -- and these numbers exclude the financial services firms that have been at the heart of the crisis. Almost every sector has been affected -- autos, airlines, consumer products, retail, chemicals, technology and pharmaceuticals, among others. For some companies, the layoffs are more of a cyclical experience, but others are going through layoffs for the first time. For many firms that have announced or will announce cuts, it is a dramatic turn of events given that they were doing relatively well just a short time ago. It is this all-encompassing aspect that has fueled talk among analysts and strategic planners of a fundamental change in business -- a restructuring of the global economic system.

But is that really the case? Experts at Wharton and elsewhere argue that what companies are experiencing now is neither an indication of a transformation nor a blanket prognosis for the rest of the economy. Instead, they say, the job announcements highlight operational weaknesses and strategic issues that have been lurking under the surface for years. In the past, these were effectively concealed in the same way that weakness and instability in the capital system were hidden by the apparent boom in asset values. Now, the downturn has brought them to the forefront.

What's Going On?

Peter Cappelli, director of the Center for Human Resources at Wharton, says the problem is that the crisis is forcing many managers to focus only on the short term. "At least in the U.S., companies don't seem to be thinking about much beside the immediate impact. To some extent, this could be because of the pressure to manage operations to conform to quarterly performance expectations. It could also result from the fact that the negative effects of layoffs -- such as the long-term costs associated with hiring again in upturns; delays in getting performance back up; and morale [issues] -- are hard to track. And it also may result from the implicit assumption that the workforce is really a just-in-time resource -- that it will be easy to bring in new workers when business picks up.'

Nevertheless, the track record of companies that have gone through job cuts is terrible. "Virtually all studies show a decline in performance associated with layoffs,' Cappelli notes. "But the caveat is that layoffs are a proxy for the fact that companies which decide to do them are already in trouble. It is hard to sort the effect of the layoffs, per se, from the proxy effect.'

This means that, for many of the companies which have announced or will soon announce layoffs, the current economic crisis is not necessarily the cause of their problems; it is simply what has exposed them. As intuitive as that argument may be, experts say that managers within the companies as well as analysts, investors and policymakers outside the business face the risk of putting too much, or even all, of the blame on the current economic crisis, rather than looking at deeper causes.

Jay Anand, professor of management and human resources at Ohio State University, says challenging times like the present make differences between companies stand out in bold relief. "Looking at the strategic implications, not every company is feeling the impact [of the crisis] in the same way. Some companies have better buffers in place, better capabilities to withstand the pressures, better demand or loyalty for their products, cost structures that are a little more flexible, supply chains that are a little more adaptable, and so on.'

Experts note that job cuts should be recognized as an indication of the change that is happening -- even accelerating -- within some industries. This is clearly the case in financial services and autos, for instance, but it is happening in technology as well. It's part of the reason why some of the IT industry's biggest names like Microsoft, Hewlett-Packard, EMC, Dell, SAP and others have been hit. Each of these companies, in some way, is facing a transition point in its evolution, forcing changes in its business models.

At Microsoft, for instance, its first-ever significant cuts are tied to the sharp decline in demand for traditional PCs, which have long been the company's core market. The company recently announced some 5,000 layoffs. Signs of the shift in Microsoft's market in recent years had already forced the company to begin looking for ways to further diversify its business -- as seen most notably in its failed bid for Yahoo last year. Now Microsoft must accelerate those efforts. According to company reports and analysts, this could happen in at least two ways: First, even as Microsoft sheds jobs in traditional businesses in order to cut costs, it plans to add up to 3,000 jobs in areas such as search, online services and cloud computing. The number of people hired for search will depend on what some analysts describe as a potential "wild card" -- the Yahoo factor. They believe that with Carol Bartz at the helm at Yahoo, a future deal with Microsoft could still happen. In any event, the layoffs -- and hiring plans -- at Microsoft are driven by these strategic considerations rather than just the weak economy.

Similarly, at Caterpillar, the world's largest maker of construction and mining machines, the massive restructuring was primarily attributed to high operating costs in its manufacturing operations. These costs became unsustainable as capacity utilization plunged due to low demand. As a result, Caterpillar announced it would cut 20,000 jobs since the sales volume for construction equipment -- hit hard by the housing market's collapse -- has shrunk by 25%.

For both Microsoft and Caterpillar, and many other companies, the sudden drop in demand exposed inefficiencies in their operations.

As these examples reveal, the problems leading up to announcements being made now have been in motion for a long time. Job cuts, in fact, are trailing indicators, not just for the economy as a whole but also for the specific businesses involved. It takes time for them to be announced and hit the headlines because they are usually among the last steps companies want to take in response to challenging conditions. They also are extremely complex issues to handle, forcing management to make extremely difficult choices.

Looking Ahead

Now comes the hard part. For all the companies that have announced job cuts, operations will become significantly harder to manage in the months ahead, as they work through the process of notifying workers, supporting them and, not the least, finding ways to compensate for staffing changes through existing or new business processes. All these efforts will take a significant amount of management bandwidth, and at the same time many important projects will potentially be either understaffed or delayed. And all of this comes at a time when companies can least afford distraction.

Are any companies or management teams notably "good" at handling situations like this? Wharton's Cappelli says the key is to consider and pursue alternative arrangements first. It is difficult to believe that any company is really good at this process if they aren't also doing some other creative arrangements for cutting labor costs (wage cuts, job sharing, sabbaticals, mandatory vacations, etc.), he notes. "The reason is, it would be remarkable if, after careful analysis, the only option that made sense across a company was layoffs.'

Ohio State's Anand says it is critical, in the end, to maintain perspective. Specifically, he suggests that companies focus on the current crisis but also be prepared for a rebound. "When everybody agrees that times are wonderful, you need to hold on. Similarly, when everybody says times are awful, you should think things through in a balanced way. There will be regression to a mean in time, and it is very important that firms are prepared for that. Even though managers need to act now to respond to the situation, it is important to look ahead and keep open options for growth. You do not want to overreact in a way that causes a substantive reduction in competencies, and in turn fundamentally impinge on your future.'

The turn could come sooner than some expect. Portman at Oxford Economics points out that while previous recessions developed more slowly, and in a less global fashion, businesses are now seeing a fast transition of weakness from the U.S. to the rest of the world. But there is an upside, he says. "This crisis has come about very rapidly, but the converse is that the recovery in time will also come about much quicker than we have seen in the past. Today, the gloom and doom is being extrapolated without taking into account the dynamics that are present. The downturn shouldn't last as long as some people are expecting.

"We have received quite a big setback, and we will continue to be hampered over the next year or so," Portman continues. "But when things can start to move forward again, I don't see any reason to expect huge changes in how business operates -- I don't quite see how that will transpire. Businesses will adapt, and we are already seeing that. We are seeing improved labor productivity, improved competitiveness, and that will underpin and come to the fore when things pick up again. In two years, we will see things improving, and business will be able to focus again on growth.'

The caveat, of course, is deciding which companies will be able to do so. The answers here are unclear. Without a doubt, firms that have approached layoffs -- or alternative solutions to preserving their talent during difficult economic times -- will be better positioned for the recovery than those that have adopted a knee-jerk approach to job cuts as a way of slashing costs for short-term gains. "Today, some companies are being forced to let go of their competencies, while others have not had to cut into any muscle," says Anand. "When the economy improves again, we will start to see the difference."

Quit Standing Beside Your Power

Listen up.

Do you routinely defer the floor to others before you are finished? Giggle when nervous or, worse yet, laugh uncontrollably? End your statements with a lingering request for support? Do you work to be seen as the always-agreeable-can-get-along-with-anyone person on the team? Start your recommendations with qualifiers such as, "I am not sure you are going to like this idea, but." Not ask all of your questions because you feel you may have taken up too much meeting time already? Do you do any variations of the above on a regular basis?

Yes? Well, stop that right now.

When communicating, be prepared and be professional. Articulate your position and state the reasons why. Don't soften a message that needs to be heard and don't think for a minute that you deserve any less respect than the person sitting next to you.

Quit standing beside your power and step into it. Now.

"Information Overload"

Every employee wants to be performing above and beyond their call of duty to sustain in this tough competition they face daily at their work sites. And hence multitasking.

Due to this juggling tasks has become an inescapable element of work as revealed by a new field recognized as "Interruption Science" (Source: HR Magazine; August 2008). Information Overload often challenges the innovative and creativity aspects of workers when they have to constantly multitask or shift from one task to another or tackling two cognitive tasks simultaneously.

"A study showed that workers on average spend just 11 minutes on a project and, within that time frame, typically change tasks every three minutes" (Source: HR Magazine; August 2008; "Quelling Distraction: Help employees overcome 'information overload'.")

Companies/Organizations are starting to realize the importance of need to allocate some time for employees to be creative and thinking.

So companies are dealing with this new challenge by carving out "Creative Spaces". Some call it "White space" or Creative room or Work-Out sessions or even "Think Fridays". All these efforts try to provide a physical place or a specific time or day for employees to focus on creative thoughts or agenda-free reflection without any interruptions.

For more information read the complete article HR Magazine; August 2008; "Quelling Distraction: Help employees overcome 'information overload'."

Speak Successfully

How many times have you received a voicemail message that you needed to replay several times just to decipher the person’s name?

What about your own speech? Are you clear and articulate? Do you speak slowly and clearly enough for the person on the other end of the phone interview to understand your name and background?

Communication skills can mean the difference between not getting a call back for a second interview and landing the job. I am frequently told by managers at banks, financial institutions and large corporations that poor speech in and of itself may knock a candidate out of the running.

Why do people often speak like they have marbles in their mouth? Why is it that some people often need to be asked to repeat what they are saying? In a fast-paced business environment with so much on everybody’s plate people tend to speak quickly. They do not even pay attention to how and what they are saying because they are often doing more than one thing at a time. With so much competition for jobs, why not give your self a competitive edge and learn to improve your communication skills in order to stand out among your competition? Better communication skills will make the difference.

Statistics reveal that companies lose millions of dollars due to their employees’ miscommunications. If you are looking to advance your career within your current firm or outside of your present company, think about your own communication skills. Do colleagues frequently ask you to repeat what you have just said? Do they ask you to speak louder? Could your speaking style prevent you from getting that dream job?

Consider this: You are sitting at your desk, reading an email, thinking of a meeting in five minutes and the telephone rings. You are not completely paying attention to what and how you are speaking since you are busy reading the email. So, the person on the other end of the telephone asks you to repeat yourself, and only then do you realize that you need to stop typing on the computer and pay attention to the conversation. Sound familiar?

Remember these tips to help you improve your communication skills immediately:

1. Learn to listen. Listening skills are critical. Be sure to pay attention when you are receiving information about a potential job. Give your full attention to the person who is speaking. You may need to recall the information a few minutes later in order to ask intelligent questions based on what was said. Be sure not to let your mind wander. You cannot listen well if you are thinking of what to say next.

Stay focused. Sit up straight and look directly at the speaker if in-person, or in a mirror if on the phone. Now and then nod to let the speaker know you are actively listening. Be sure to let the speaker finish what they are saying. When you interrupt, it appears as if you are not listening.

2. Slow down your rate of speech. Simply slowing down your rate will significantly improve your speech quality. The average rate per minute varies from about 130-150 WPM. For suggestions on how to check your rate of speech send an email to info@corporatespeechsolutions.com.

3. Finish your words.Remember hearing the saying, “Don’t swallow your words”? People are in such a hurry to complete a task at hand that they forget to finish their words. Old becomes ‘ol; fishing becomes fishin’; business becomes busin’; you get the idea. In the course of a conversation, this doesn’t just cause “sloppy speech,” it forces the listener to work harder to understand you. In business, people don’t want to work harder. They want to get the information and move to the next item. Learn to finish your words.

4. Many words in English sound similar. Still versus steal? Hill versus heal? Cab versus cap? If you do not speak clearly, how will the listener be sure what you are saying. “Will you grab the cab?” Is your friend asking you to grab the cap that he left in the other room or the cab so you can head downtown together?

5. Learn to speak clearly and effectively on the telephone. Today, most of our daily business is conducted over the telephone. Often we have meetings with multiple people on the telephone. There are many high frequency sounds that can be lost if you do not learn to speak clearly your message can be misinterpreted.

Speaking clearly takes practice but is an integral part of effective business communication. So how would you rank yourself as a speaker?

Are You A Leader Quiz

When you look at your management style ask yourself these questions. If you can say yes to all of them then you are a leader in your organization:

• do you expect extraordinary performance? Yes___ No___
• do you lead towards high performance in your organization daily? Yes___ No___
• do you get below the surface? Yes___ No___
• do you manage individual and organizational change? Yes___ No___
• do you implement change from the middle (ie: think like a designer, a software engineer, a marketing manager)? Yes___ No___
• do you seize opportunities?  Yes___ No___
• do you influence to WIN? Yes___ No___

If you can answer yes to all of  these then you are a prime leader of change and HR management.. 

Have You Reassessed Your HR Teams Capabilities?

Over the past year I am sure you have seen reductions in the HR teams across many businesses. These reductions have been publicized in the media. Take a look at what has happened, 20% of HR staffs have been reduced in the past year. One could ask is this truly a cost reduction step or is it more deeply seeded in the ability of your staff to meet the business requirements of the day and/or have the capabilities to strategically solve managements business issues. Maybe you do not see the disconnect between what value your team adds or does not add but managers do.

So, as the head HR person for your group have you assessed your team lately and have you invested in their development of these very important things:

• strategic thinking and action from concept to execution to results
• strategic decision making
• managing conflict and creating universal consensus
• negotiating success and development of a learning laboratory for the business
• teamwork and collaboration, how to grow cross-functional teams
• becoming a strategic thinker with a CEO mind
• creating value for your internal and external customers

As you ask these questions, have you also invested time in your own development to stay ahead to this very fast moving curve we call business recessional action. If you have invested time have you used CCL, UVA, Stamford Learning, or HBS?

What are your thoughts on this development thought process and what have you done lately. Drop me an email at wgstevens2@gmail.com

Study Finds Reduction in Turnover by 1 Percent Saves Thousands of Dollars

By definition, high impact businesses are high growth businesses. A high degree of change is necessary in high impact businesses to respond to market pressures: demand for improved delivery of services, global influences, rapid changes in technologies and increased competitiveness. But a traditional employment model doesn’t allow businesses to be agile enough to adapt quickly to changing business needs and conditions.

Existing employees often lack the skill sets and competencies needed for new business, and training for new skills isn’t always an effective option in a fast-paced environment. High labor costs as a percentage of the cost of doing business makes it imperative that businesses maximize their return on investment in people. Added to these challenges, employers are losing their ability to respond to business issues as experienced employees retire and take with them the institutional wisdom that they bring to the conference table.

Not only are many high impact businesses caught in this “war for talent,” but turnover rates combined with rising retirement rates foretell future difficulties in having the talent on-hand to meet growing and changing business conditions.

Read more about how just for a one percent decrease in turnover, every company could realize annual savings between $400,000 and $4 million depending upon the size of the company. Even for a company with as few as 64 employees, savings averages approximately $8,000 by reducing employee turnover by 1 percentage point.

The Hidden Upside Of Downsizing

People are getting fired. Profits will never be the same. It's 1929 all over again. The guy on the corner tells you, "It's a recession. Times are tough."

So why is Stephen Covey , the best-selling author of 7 Habits of Highly Effective People, feeling all upbeat? Because he believes that a positive cultural shift is occurring as we speak, and that firms that empower their employees are about to blossom (see my previous post dated 7/1/08, 5/28/08, and 5/23/08).

"We've never had such opportunity as we do today," he says. "People can create. They can adapt. They can make sacrifices. This is a really an opportunity for creative businesses to gain competitive advantage."

Covey has built a publishing and consulting empire teaching people how to be the masters of their own destinies. While the emphasis these days tends to be on all the pain the financial crisis is causing, he's much more interested in the change it is permitting. Agonizing about having to lay off workers or worrying that your own job may be on the block doesn't fly with him. "People are too much a product of their conditions, and not of their decisions," he says.

When profits dwindle, many organizations make the mistake of letting people know as little as possible, he says. "I find that people are very capable and resourceful when they're not in the dark. Open the books, show them what's happening. If you get them involved with the problem, they'll be a part of the solution. They may come up with ways to cut costs other than cutting people."

To get employees to trust management when mass firings are more common than rainstorms, leaders need to be open, authentic and real, Covey says. "If there is no real trust and genuine integrity, then it just becomes a kind of fake program of fake democracy, which will worsen it. People will say, 'We were manipulated again.' "

What are your comments?

When Right Is Right Where Others See It Wrong

I am sure each HR practitioner has experienced a situation where they made a decision and some senior management person did not agree. There are so many variables that I thought it would be appropriate to bring this up as a thought provoking question/issue. I do not like to make sports analogies but seeing last weeks playoff games in the NFL brought one to light. A play was called on the field in a snow storm that looked right from every camera angle shown. It was challenged and the play was reviewed in the booth and was called differently and it was a turning point in the game. Well, a player who was interviewed afterwords was asked about the play and his comment went like this; "the refs are here on the field feeling the game and the weather conditions how can someone in a heated booth feel the same tempo".

So many decisions are made based on the unique circumstances that reside at the time and those decisions are sometimes backed up by senior management and sometimes not. What senior management fails to realize is that those unique circumstances do not flow to instant replay or Monday morning quarterbacking. The decisions that are made are in good faith, have unique circumstances, critical interaction between employee and HR, understanding of state & federal regulations, one-on-one dynamics, and are not necessarily made by shoot from the hip decisions. Good quality thought goes into this at the time. Managers and senior managers need to consider this in their decision to back or not back the HR persons' decision. Unfortunately, many HR careers are set back, promotions denied, lost confidence, and even career ending terminations. Every senior manager needs to consider, in detail, the at-the-moment circumstances when calling the HR person into their office to review their decision.

What are your thoughts & have you been in this situation?

HR Work Is No Longer HR’s Work - From an HR Strategy Perspective

I attended a dinner function in the last week with a couple of colleagues. During the evening we got onto discussing my favorite subject .... HR strategy, and were having a debate about the usefulness of HR departments. The chap I was chatting to was in a typical mid-management line function and was complaining about the lack of HR support he was receiving and how much “HR work” he was doing.

I immediately said to him that this was a good thing, which took him by surprise. I continued to put my argument forward that it is not HR’s role to be managing his staff, and that the concept of HR being the department that deals with “People matters” is old and not contributing to organisational growth.

His counter argument was that he is there to make sure his business unit achieves its output goals and all this other HR mambo-jumbo is wasting his time. I did concede that if HR is dumping a lot onto him that is not value adding then he may have a point and should push back on doing stuff that fails to help him achieve his outputs. But, achieving his goals involves people, and he could not abdicate this role to HR or anyone else. Management of a business includes effective management of people. I asked him about his HR department in some more detail and how they had got to this point.

There are a number of interesting take aways from this discussion that took place:

1. this is not a unique situation and its been an ongoing debate for many years. What it does tell me is that the role of HR in that organisation in not understood or positioned properly. Even though HR is trying to do the right thing by getting line management to take accountability for their staff in a holistic manner, they are fighting an uphill battle and will continue to do so until the executive reposition the HR department correctly.
2. the HR department does not realise the long term damage they are creating when they execute an approach without the proper backing and strategy. It backfires like we have seen with this line manager. His view of the HR department is not positive and he sees them working against him. Correcting this is now going to be a bigger problem than before.
3. this does highlight a major concern with the level of strategy knowledge within HR departments. HR folk tend to be good at designing and executing activities inside the “HR space”, but can do with some support in executing programmes into the larger strategic realm. It points typically to the lack of business understanding and how to position HR strategically.
4. the forth point is about line managers themselves - I personally think that most of the push back to managing all aspects of their staff is related to fear and uncomfortableness with dealing with difficult people situations. This highlights the need to select management correctly, and not just appointing the good salesman into the sales manager role. Not all people are good and dealing with people matters, but it must be a requirementfor management and supervisory positions, and training and development in this space is a necessity.
5. finally it is also senior managers responsibility to measure people correctly to achieve particular behavior changes. If this line manager is rated on how he achieves his output goals, then that’s what will drive his behavior, however, if he is also measured on how he effectively manages people and gets the best out of them then that will drive another set of behaviours - but its all part of a well thought out HR strategy.
   
   Some of you may be thinking whether there is a need at all for an HR department if line management become super proficient in managing people. The answer is not as simple as a Yes/No, but I do think that you can get rid of the HR department as we know it today. Concepts such as HR shared services and other components that are administrative and transactional in nature can be owned by an inclusive services division. But HR strategy and expertise groups would still need to exist, but could be intertwined into the organisation in other ways than a separate department. Sounds like a good topic for a later discussion.
   
   Tell me your thoughts.

Finding Money for Innovation: Develop Those People Skills

Innovations typically involve trial, error and outright failure before turning into successful products or services. Thomas Edison, for example, conducted approximately 10,000 failed experiments before perfecting the incandescent light bulb. For decades, leading businesses have willingly shouldered the expense and the risk of innovating as the price of staying ahead of competitors.

But innovating has become a lot tougher lately, according to a panel of technology experts who recently spoke at the University of Pennsylvania's Executive Master's in Technology Management program. With R&D budgets shrinking and markets retrenching in a worldwide economic crisis, the panelists noted, technologists will need more than lab expertise to convince their employers to keep the research funding spigots open.

Indeed, the ability to communicate well and other "soft skills" are just as important as technological expertise when it comes to selling new ideas to investors or senior management, suggested several members of the panel, which was titled "Street-Smart Innovation to Align Emerging Technology and Business." In addition, future scientists, researchers and program managers should focus on aligning innovative projects with company goals. As panelist Nicholas D. Evans, vice president of the innovation division at Unisys, pointed out, it's much easier to justify budgets for speculative projects that show an obvious commercial benefit to the parent company.

That lesson became painfully obvious this past summer to employees of the storied Bell Labs research group, based in northern New Jersey. Alcatel-Lucent, owner of Bell Labs, all but gutted much of the non-commercial "basic research" performed by the lab. The product of a rocky 2006 merger, struggling Alcatel-Lucent sought to align Bell Labs' operations more closely with the parent's commercial interests in wireless, optics, networking and computer science.

So, how do organizational entrepreneurs keep innovation alive in companies looking to slash costs? And how do start-ups and growth companies attract investors when the rest of the economy is melting? That's another place where those soft skills come in handy. Several of the panelists suggested that while technical people are generally not known for soft skills, those individuals who desire funding to continue their work would do well to acquire them.

Anthony P. Green, a vice president with first-round funding group Ben Franklin Technology Partners, said he frequently sees entrepreneurs stumble because they lack such skills. All too often, entrepreneurs come across as rude, dismissive and disrespectful to audiences of potential investors, thereby "infuriating the investment community." Panelist Eric F. Bernstein, a laser surgeon, dermatologist and technology entrepreneur, echoed that point. "Business is all about relationships. They need to like your idea, but they also need to like you."

Suzanne Taylor, portfolio director of corporate operations for Unisys, pointed out that budget handlers are also more inclined to favor innovation if it can be shown to cut costs. Innovation department heads must become adept at "making the case for maximizing productivity and reducing waste," Taylor said. This requires excellent communication skills, she added, including the fine art of schmoozing. And the higher up the case is made, the better for the innovator, added Sanjoy Ray, director of global application engineering for pharmaceutical giant Merck. "Executive sponsorship is very powerful. It provides 'air cover.'"

Do you agree? Send me your comments and thoughts on this issue.

Sweat the Small Stuff

When it comes to company culture and having a reputation that attracts and retains quality people, the small stuff is the important stuff. If the boss adds a little to the expense account, maybe the CFO adds a little to the balance sheet. If the person in the cube next to you treats a vendor poorly, then maybe that vendor adds a little extra to the invoice next time - or tells 100 people not to do business with you. In November, CBS on line had an article entitled "Bad Behavior Contagious, Study Finds" - highlighting some of the research on this phenomena. For me and others I am sure, steeped in social psychology and the impact of the social norms - it's a no-brainer. But most folks blow off the effects of small behaviors.

Keeping your eye on the small stuff is probably the single biggest thing a company can do to influence culture.

Incessant Change is the Norm

You have to read this white paper on change. It is exactly what I have been talking about for the last 20 years as companies go through evolution and economic change. some do and some don't. The ones that don't will not be a company you should either invest in or work for.

Change is permanent – it does not matter what industry you may be in, how large your enterprise, or your organizational structure. Globalization, technology advances, complex multinational organizations and more frequent partnering across national borders and company boundaries – these are just a few of the enablers and accelerators of change.

How would you rate your organization when it comes to executing change? Most CEO's consider themselves and their organizations to be executing change poorly, yet a few outperformers do excel at delivering and benefiting from meaningful change. You need to become an outperformer to learn to manage change well, so you can get ahead of, and even be the driver of change. To accomplish this, you will need to abandon outdated notions of change. You no longer have the luxury of expecting day-to-day operations to fall into a static or predictable pattern that is interrupted occasionally by short bursts of change.

Where do you see your enterprise in the next few years? Leading your competition in growth and revenue? Developing a highly new innovative product or service? Re-inventing and redefining your industry? Or will your organization remain static, struggling to keep up with your competitors, and staying afloat?

For its very survival, the Enterprise of the Future must better prepare itself as the pace, variety and pervasiveness of change continue to increase. Discover how to become a "student of change" in a world of total flux.

To download a copy of this new research paper, please click here:
www.ibm.com/gbs/makingchangework

The Leadership Skills Needed in Global Companies

I think this article that was published on TalentBar December 22nd has great value to anyone who manages a global company as you look to identify and grow managers and leaders.

The Challenge: Increased Globalization

In today’s borderless marketplace, it is becoming more and more common for managers to have responsibilities that include teams in multiple countries, regions and even continents. Besides the obvious logistical and technical challenges this poses, there are also numerous people–related challenges. Fostering collaboration, aligning organizational objectives with departmental and individual objectives, and motivating others to perform is hard enough when you see the people you manage every day and speak a common language. When you don’t, the task can feel impossibly daunting.

Key Leadership Skills:

The Ability to Manage Remotely
In a globalized business environment, leaders must learn the skills necessary to manage from afar. The most successful leaders understand that micro–managing employees is counterproductive. With a geographically dispersed workforce, it isn’t even an option. As such, global business leaders must have the ability to manage, develop and empower others to make business decisions that are not only sound but closely aligned with over–arching organizational goals.

It is fundamentally important that remote employees understand what they are working to accomplish and how it relates to the larger organization’s objectives and strategy. Culture and language differences increase the likelihood of miscommunication, and distant employees don’t have the luxury of walking down the hall to seek clarification. It is therefore imperative that global leaders be skilled at surfacing and testing assumptions in ways that encourage active dialogue rather than passive compliance in an effort to ensure understanding and foster agreement before they ask employees to execute their plans.

Creating Trust and Commitment
For a long–distance working relationship to succeed there must be a great deal of trust and commitment between both parties. These attributes must be earned over time through consistent and deliberate demonstration. Being a leader of a global business requires the ability to foster trust and credibility in ways that do not depend on having proximate relationships. This ability requires a deep understanding of individuals since intuitive skills are not enough. Managing from afar, global leaders cannot rely on ‘reading’ someone’s reaction. They must be able to understand and anticipate universal, but often unspoken, needs and interests. They must also be skilled at communicating in ways that resonate deeply and assure employees that their interests are being considered and protected.

Self–Awareness
Self–awareness is the foundation for any leader’s development and is critical to their ability to achieve success. Leaders who are responsible for motivating and managing people on the other side of the world must possess advanced leadership ‘soft skills’ – skills that are not mastered by reading books or attending seminars; skills that are sustained through continual feedback and reflection. Leadership ‘soft skills’ are developed through hard work that begins with self– awareness. Leaders who understand and are honest about their own needs and interests as well as their strengths and weaknesses will be far more able to convincingly speak to others in ways that build and foster trust and commitment. To develop these competencies, many organizations are leaning heavily on tools and systems that provide immediate feedback. These tools, such as 360–degree feedback, break through powers of denial and help leaders align their self–awareness with others’ perceptions. Unfortunately, these tools, which can be extraordinarily beneficial to leadership development and overall organizational strength, are typically used too infrequently.

Giving and Receiving Feedback
It is no longer sufficient to receive an annual performance review that vaguely links our actions over a 12–month period to the organization’s performance and results. These reviews fail to teach us how our behavior directly impacts others – and the organization – on a daily basis. In an era when organizational change is constant, feedback should be equally constant. To truly develop self–awareness, leaders need opportunities to receive feedback about their behavior and management ability in ‘real–time’. The power of this ‘in–the– moment feedback’ is well documented in psychology and has proven to be one of the most effective ways of evolving behavior. Many people don’t feel comfortable or skilled enough to freely give and receive candid, and often personal, feedback. Yet, fortunate leaders receive it frequently in more structured, albeit less natural, forms designed to build their self–awareness and further develop their interpersonal skills. Leadership development programs provide opportunities for leaders to practice giving and receiving feedback through videotaped interactions, role plays, and candid discussions. There is perhaps no more powerful reality check and learning tool than having a group of peers stop a videotape of their manager talking to a subordinate and say, “There! Do you see what you just did? When you do that, it causes people to not want to follow you.” The more opportunities leaders have to give and receive this kind of feedback, the more likely they are to model it for others in their organizations. Over time, this can transform an organizational culture and help equip individuals with the self–awareness and interpersonal acumen they need to perform and succeed, which ultimately benefits the organization.

Do you agree or disagree and what are your opinions on this subject?