BP's Fiona MacLeod: A Change Agent Sees Change 'Addiction'

After 20 years of experience leading change management programs in the U.S., Europe and New Zealand, BP executive Fiona MacLeod has concluded that the corporate world is "addicted" to serial change management programs that consume massive resources but ultimately fail to solve the problems they aim to address. "What really struck me is why so many of these change management programs fail," only to be followed by similar initiatives within one or two years, often before the original program is completed, said MacLeod, president of BP Convenience Retail USA & Latin America.

At the recent Wharton Leadership Conference, co-sponsored by theCenter for Human Resources and the Center for Leadership & Change Management, MacLeod urged her fellow leaders to ask themselves: "How can we ... free ourselves from our addiction to episodic change and move to a much more healthy habit of continuous business improvement?" She compared the phenomenon to a yo-yo dieter who loses weight only to put it back on because he has not come to understand what's causing his weight gain, or has failed to adopt the healthy lifestyle that would keep the weight off.

London-based BP is the third largest global energy company and one of six so-called "big oil" companies, with vertically integrated operations to drill for, refine and market petroleum products. Globally, BP reported revenues of $367.1 billion in 2008. Its ampm stores in the United States and Latin America -- the name is a reference to the fact that they are open day and night -- were launched by ARCO, the old Atlantic Richfield Co., a U.S. oil refiner and marketer that BP purchased in 2000. BP gasoline is marketed under the ARCO brand on the West coast of the United States. The company also uses the BP brand in North America and elsewhere, and the ARAL brand in Europe. In addition to gasoline, the markets offer the usual assortment of convenience store goods.

No 'Big Splashes'

Many change management programs are doomed to failure because "the change we are putting in place is not sustainable -- and sustainability is absolutely crucial," noted MacLeod, who is based in La Palma, Calif. Change initiatives wither in an organization for several reasons:

• hangeNew leaders are often more concerned with "making a big splash" than with following through on a long-term plan to monitor change and keep the program on track.

• Organizations often revert to old habits because employees do not understand why change is needed, or they lack the tools and training required to sustain the new approach.

• Nothing changes because ownership of the change rests with an external team or consultants, rather than with the leaders responsible for running the business.

MacLeod urged managers to attend to "the soft side of change" by putting in place programs to fully engage leaders and employees in the process of creating change and sustaining it over time. "As business leaders, we're very good at the rational part" of change: Identifying what's wrong and how to fix it. But the soft side of change management -- in terms of really engaging people -- is just as important. If people get it intellectually but don't get it emotionally, I don't believe the change will be sustained."

To be engaged, employees must understand the case for change. Managers should provide data showing what's not working and how the change will fix the problem. "Develop your killer slide to make your business case whenever you give a presentation. It's not only why you're changing, but what it's going to look like when you're done. People need to have a sense of what the future looks like, so be very clear on that," MacLeod advised.

Business leaders must own the change agenda and take responsibility for following through on implementing every step in the plan and tracking results to make sure that change continues over time. "Never assume that leaders get it.... We need to take probably 10 times as long in engaging, empowering and educating our leaders than we actually think we do," MacLeod said.

Getting the commitment of leaders is essential to avoid the common pitfall of turning change management into a charade. "You have a workshop, learn some change management jargon, you maybe do some team building, and have a pile of flip charts ... and actually none of the [steps] are properly measured or followed through and it ends up being a waste of time."

It's important also to shift the emphasis of change management from "big splashes" to "everyday performance improvement." You can prevent the typical reversion to old habits by providing tools and training required to continually measure progress toward specific change objectives. "Put written charters and contracts in place. These contracts need to be in people's performance reviews, not something separate," MacLeod said. "You need to constantly look at them and discuss them with people."

Changing the culture to reward the desired behavior is critical to success. Make "heroes of our day-to-day deliverers, not those who make the biggest splash. You reward people on how they treat the customer, how they make decisions, how they simplify the business..... And crucially, all of this has to be done in the spirit of open communication and respect.... If [people are] uncertain and they don't feel respected, the change will never stick," MacLeod said.

Since joining BP in 1988, MacLeod has specialized in business transformation, developing the required breadth of skills in a variety of marketing, HR, supply and distribution roles across the UK and Europe. She has led operational, strategic and marketing elements of the retail business, and most recently led the restructuring of BP's European marketing businesses. A native of Scotland with a Master's degree from Glasgow University, MacLeod was tapped to head the U.S. convenience retail business in 2006, providing her biggest challenge yet: Restructuring the business and transforming the brand for about 1,800 stores from California to Pennsylvania.

MacLeod's project was part of a broader BP reorganization initiative announced in October 2007 to improve the company's efficiency and narrow its performance gap with competitors. When MacLeod embarked on her restructuring program, she had to figure out what was wrong and, more importantly, why three previous initiatives had not worked. She did not want to make the same mistakes.

"The key thing was making our business purpose clear," MacLeod said. "We thought we were there to fill up lots of stand-alone convenience stores and tie up lots of capital, when actually our purpose was to monetize the gas we made at our refineries and make sure we had a secure position in the marketplace for the long term. The question was... how could we put that change in place in a way that would stick."

She chose a bold plan that would require wrenching change. Among BP's 1,800 retail outlets nationwide, 800 were company-owned and operated. She would change the business model to 100% franchised with a revamped ampm store brand and new marketing programs to compete more aggressively.

Selling 800 stores to franchisees would eliminate 10,000 jobs at BP, virtually all of the people employed in BP's convenience retail business. The total included 9,500 store employees and an additional 500 support staff at two headquarters. For the store employees there were no guarantees they would be hired by the new franchise owners. MacLeod and her team faced significant people management hurdles in readying the stores for the conversion process in only 18 months. She would have to motivate store employees to reduce overhead and improve operations, even though they faced "huge uncertainty" about future employment. "Our people were displaying the classic signs of change fatigue.... People were very jaded" and lacked confidence that they could make things better, she said.

"Confidence is absolutely crucial in making change stick. If people are confident in their leadership, themselves and the business purpose, you are way more likely to get a change that is sustainable and actually turns into continuous improvement," MacLeod noted. To build confidence, her team drafted a business case and showed it to the "biggest cynics" in the organization, asking them for a critique and to suggest how to make it work. MacLeod said she built trust by speaking directly to store employees, explaining how the plan would help them beat the competition, and showing that "we had genuine empathy for what they were going through."

So that employees would know what was expected and see their progress, her team communicated month-by-by month performance objectives, including specific plans to reduce overhead costs. "We focused every single day on engaging our people," using town hall meetings, small team meetings and the web to promote continuous improvement, MacLeod said. To prevent backsliding, she offered employees retention bonuses that would be paid at the time the store was sold to the franchisees if the stores were delivered to their new owners with strong financial controls and safety records. "People were very motivated to make sure the business continued to run in a very healthy way."

Celebrating success, recognizing achievement and making people feel good about the business were important tools for sustaining momentum. "People got rewarded for simplifying and improving things. Importantly, it's as much -- if not more -- about the recognition of your peers than it is about financial rewards," MacLeod said.

Know Your Destination

Organizational design helped to lay the foundation for change. "I put my winning, end-state organization in place from day one" rather than waiting to decide which employees would stay to support the franchises and which would leave," MacLeod stated. "We had people who knew they would be leaving in 18 months and they stayed motivated for the entire period because we had been very straight with them. People want and expect clarity from their leaders." Planning was critical to reduce risk as the team rolled out new concepts. "We did lots of road mapping and tested our plans before we went to market," MacLeod said.

In the end, tracking measures showed that employees improved and simplified operations throughout the conversion period, producing $700 million a year in cost savings. Selling the stores freed $1.2 billion in capital for BP to redeploy more productively. Pulse surveys showed morale steadily improved, even though 70% of those responding knew they would lose their jobs, according to McLeod. "The thing I'm most proud of is how our people responded.... You can do some really tough things as leaders and you can do them in a way that people feel valued and respected."

She noted that "it's very easy to get addicted to the change pattern by not getting the change right in the first place, not making the tough calls or bold decisions up-front, maybe going for something half-way, and then allowing things to slip back."

Ultimately, MacLeod said, not just corporations, but the global economy depends on leaders to break the cycle. "The economy needs businesses that are clear on why they exist, clear on what their business model is, and have measures in place to know when they need to make adjustments. We need organizations that can manage continuous improvement in a predictable way."

Thanks to Wharton for this article.

Happy 4th of July America

May all of you have a great 4th of July weekend & happy birthday America

Towers, Perrin & Watson Wyatt Merger

Recently it was noted that Towers Perrin & Watson Wyatt will merge into a new organization called Towers Watson & Company in an all stock deal valued at $3.5B. What will this do to the pricing of services that you may currently have with one of these companies? My thought is that with one (1) fewer choice for HR consultantancy out there that you will see the price of services increase by at least 10%. What will that do to your budget.

Better start shopping around for new vendors.

Jack Welch Says HR Managers Have the Most Important Job in America

Jack Welch, former CEO of General Electric, believes that HR managers have the most important job in America and that CEOs should value their HR managers as much as their chief financial officers. Welch was the opening session keynote speaker at the Society for Human Resource Management's (SHRM) 61 st Annual Conference and Exposition in New Orleans.

In a twist on the traditional keynote speech, Welch took questions from moderator Claire Shipman, author and national correspondent for ABC News' “Good Morning America,” as well as questions from SHRM members sent via video and Twitter. Not surprisingly, the discussion focused on Welch's views on how HR managers can succeed during the current economic downturn.

Trust. First, Welch told attendees that HR managers must earn the trust of employees. They need to take care of those who do a good job, and “tell it straight” to those who are not performing well.

He believes strongly in rigorous evaluations, noting that no employee should wonder where he or she stands in the company. Weak performers should be “traded out of the team.” Welch explained that this does not necessarily mean they should be fired. Often a weak performer will be a better fit in a different position in the organization.

HR also needs to create an atmosphere of growth and excitement, to make the organization “vibrate so people feel the excitement of tomorrow instead of the pain of today.” Welch urged HR professionals to make their companies more informal, less bureaucratic. In Welch's view, this will help organizations retain their best performers when the economy recovers.

Don't be a victim. Welch advised attendees to stop being victims. To enthusiastic applause, Welch exhorted attendees to make it know to upper management that HR makes a difference and to get out of the “picnic, birthday, and insurance form business.”

When asked how HR professionals can make their CEOs recognize their value to the company, Welch responded with two words: by over delivering. Welch explained that HR professionals have to make their bosses smarter by giving them more than what they ask for. HR also has to insist on having a voice within upper management.

Communicate. Welch finally stated that HR has to engage in reality-based communication. Recognize the uncertainties in the economy, and let employees know what is going on. He believes that HR can gain the trust of employees and of upper management through honest, consistent communication and by sending the same message to employees, upper management and the media.

I could not agree with Jack Welch more, he is spot on as to the value and importance of HR. Do you make the grade to meet Jack's level of competence and value to your organization?

COBRA Coverage Headaches

I have held off writing about this but could not wait any longer. If COBRA is supposed to be seamless to the individuals that extend coverage under the act with their company then you are rudely mistaken.

It seems that when you leave a company usually your coverage lasts until the end of the month then your option to take COBRA starts the first of the following month. Well, don't go to a doctor during the 1st week of the following month because you will show in the system as not covered. It takes time for COBRA to kick in retroactive back the the 1st of the month. Don't get caught because most doctors require payment when services are rendered and you will be out the money until you can get reimbursed by your carrier during this break period.

I've known this for years but had the unfortunate experience recently to tell this story. Be careful. I wish the benefit director and the carriers could get together so this COBRA process is transparent and seamless to the employee. One only knows there is enough anxiety and fear when you are let go from a company and you do not need health and dental issues on top of that immediate stress.

I am sure you readers have had similar experiences or have an answer to this troubling issue.

Why Today's Leaders Need EI More Than Ever

As the economic realities around us get harsher, the need for emotionally and socially intelligent leaders grows more intense. Not managers who can dish out pats on the back, blanket reassurances and wishful thinking. The leaders who will see their organizations through will do it by recognizing others' needs, building relationships and generating extra effort. Forget soft skills. This is the tough stuff with which trust is earned and maintained.

EI defines the difference between a great leader and an average one. The ability to inspire a team, tune in to others' values and motivations and model high standards are the hallmarks of outstanding leaders. And these abilities are grounded in a level of self-awareness that gives great leaders the stamina to maintain trust through challenging circumstances.

Do you determine your CEOs and key stakeholders? Check blog post dated 5/6/09.

Have You Reviewed Your Website ?

In an effort to match customers with products and services some companies really hinder adoption because of all the bells and whistles they make potential customers go through. So, I ask you, "have you checked your website lately?"

There are many ways to make your website friendly to visitors and I will be the first to tell you I do not know all the answers and suggestions. But, as a user of websites on a daily basis "I can point out the common errors webmasters and designers make. Here are just a few:

• are you forcing visitors to register immediately? You should do this after they are sucked in
• does your site have a long URL? Keep it short especially when visitors want to paste it into a favorite list or send it to another person.
• does your site have a search feature? If not people will get frustrated and leave especially if they have to click more that 2X.
• if your site does not have DIGG, Delicious, or FARK bookmarks you are missing the boat.
• does your site limit communication only by email? People want options.
• don't make users retype their email address when registering for asking for information.
• do not use case sensitive passwords or USERIDs. KISS method is fine for most since we all have too many USERIDS and PW already.
• do you have widgets in your profile, if not you should.
• make sure for publishers you get eyeballs on Amazon.com

These are just a few of my ideas based on going to websites and finding things are not as easy a couple of clicks. Remember, and I do not have to tell you this and if I do email me at wgstevens2@gmail.com, people only stay on a site for 1.5 minutes or so if they have to click more than 2X.

Economists: Recession to End in Third Quarter

The economic recession will end during the third quarter of this year, but high unemployment and large federal deficits will continue, according to the Economic Advisory Committee of the American Bankers Association.

The committee cited consumer spending stabilizing in the first half of this year, allowing businesses to reduce costs and inventories, as well as reducing layoffs and investment spending cutbacks. In combination with the stimulus and an improvement in the financial markets, it is likely the economy will expand in the second half of the year.

Bruce Kasman, committee chairman and chief economist for New York-based JPMorgan Chase & Co. (NYSE: JPM), said the economy will return to growth, but not health.

“Growth in the coming quarters is likely to gather momentum but will not prove sufficiently robust to undo much of the severe damage done to our labor markets and public finances,” Kasman said in a news release.

For the third quarter, the committee forecasts inflation-adjusted gross domestic product will return to positive growth, picking up to a more than 3 percent pace by the second half of 2010.
Also, the committee is projecting an end to the three-year downturn in the housing market, with housing starts rising later this year and home values moving up modestly in 2010.

“Lower prices and low mortgage rates have greatly improved the affordability of homes,” Kasman said. “A recovery in the housing sector will be an important contributor to economic growth.”

However, credit will remain tight and bank economists said jobs will continue to be lost. Unemployment is expected to peak at 10 percent nationally and remain at or above 9.5 percent through next year. Oh by the way Georgia just hit 9.7%.

Budget deficits are expected to remain well above $1 trillion this year and next year. The 13-member committee forecasts the 10-year Treasury bond yield will stay in the 3.75 percent to 4.25 percent range through next year because core inflation is forecast to fall towards 1 percent. However, the committee is concerned about the rising trend in federal debt and the implications for inflation risk beyond 2010.

I think I agree with this economic assessment based on what I see in the world markets and large industrial nations.

Leaving 'Friendprints': How Online Social Networks Are Redefining Privacy and Personal Security

A generation is growing up with social networking web sites such as Facebook and MySpace, casually posting accounts of their lives for their friends -- and the world -- to see. Few of these users realize that the information they post, when combined with new technologies for gathering and compiling data, can create a fingerprint-like pattern of behavior. The information provides opportunities not only for legitimate business purposes, but also for the nefarious aims of identity thieves and other predators, according to faculty at Wharton and elsewhere.

"The way privacy has traditionally been defined is being challenged," according to Wharton legal studies professor Andrea Matwyshyn, who earlier this year organized the Information Security Best Practices Conference at Wharton. Among other topics, the conference addressed security and safety issues raised by the social networks.

Research on online social networking and how it may alter privacy norms is just beginning, according to technology observers. "Our kids today will give everything [in terms of personal information] away, but it's not at all clear how this will shake out in the long run," says Wharton marketing professor Peter S. Fader. "Privacy is a moving target.

Researchers say that privacy thresholds vary by individual and that those boundaries are being tested by social networking. It is hard, they say, to pinpoint the exact impact of social networking on the web. However, it is clear that individuals are increasingly using these sites to keep in touch with friends, find jobs and enhance their careers. Social networking sites drew 139.8 million visitors in April, a 12% increase from 124.4 million in March, according to comScore, a service that measures web traffic. The April survey found that MySpace led the category with 71 million visitors, while Facebook attracted 67.5 million, and Twitter drew 17 million -- an 83% increase.

Mining the Data

Lance Hoffman, a George Washington University computer science professor who spoke at the Wharton conference, noted that by giving up such information as their name, birth date, and a list of their network of friends, users are revealing far more than they know. Third-party applications, he argued, can take that data outside of the friendly confines of a social networking site and combine it with data from other sources to piece together enough information to steal a person's identity. Just a person's name and birth date -- routinely found on a Facebook profile -- can be a useful lever for an identity thief, said Hoffman.

"I've had students who used third-party applications that took friends of friends and used facial recognition to identify them," explains Hoffman. "They didn't know what to do with the information, but someone else might. What happens when the collecting of this information is automated?"

At the conference, Hoffman illustrated how social connections are made online and the ease with which a stranger can become part of a network. He noted that he is regularly added to mailing lists and invited to become a friend -- or "friended" in the social network parlance -- of businesses that use the sites as a marketing tool. Indeed, pages used by businesses on Facebook were recently redesigned to look more like those of individuals.

In addition, the line between professional networking on a site such as LinkedIn, and social networking on sites such as Facebook, "has become very thin," said Hoffman. Many Facebook users might create a more casual persona for themselves on that site than they would on LinkedIn, where they would include nothing but professional information. But both sites can be seen by potential employers and clients -- and complications can ensue. One such complication: When a business contact from the LinkedIn world wants to become your friend on Facebook, do you accept the invitation, giving them access to the photos on your Facebook profile from last summer's rowdy beach party?

And what about the person you don't really know who wants to be your friend because you have some friends in common? According to Hoffman, that new friend may just be mining your social circle for information. As networks grow and more friends of friends (and their friends) are accepted by users, it's unclear who can be trusted.

Ultimately, social networking security rests with each user of the service (those friend invitations can always be declined). Hoffman recommended that social network denizens know the privacy policies -- governing, among other things, how the information you provide can be used -- of the sites they frequent.

At the same time, Hoffman said, web site operators need to make privacy policies easier to understand. "Privacy policies differ in theory and practice. In theory, consumers know about a site's privacy policy and trust the network. The reality is that no one reads the policies. I don't read them myself." Hoffman cited Facebook's privacy policy -- which promises that users have control over their data and what information is shared -- as typically murky. (The most recent version is more than 3,700 words -- more than twice as long as this article.) Hoffman advocates new formats for privacy policies that act as simplified "nutrition labels," like those on food products.

Private Here, Not There

Research conducted by Alessandro Acquisti, a Carnegie Mellon University professor of public policy and management who also spoke at the conference, has found that individuals' notions of privacy are malleable depending on the context of an interaction. According to Acquisti, people are more likely to divulge key personal information -- their photo, birthday, hometown, address and phone number -- on social networking sites than they would on other web sites. His 2005 study highlighted privacy concerns such as online and physical stalking.

"People [say] privacy [is] important to them, yet they engage in behaviors that indicate a remarkable lack of concern," Acquisti told the conference participants. "Privacy decision making and valuations are malleable," but it's unclear what factors lead to more disclosure. One of those factors might be a "herding effect," he said. In one study, Acquisti found that that people will divulge information when they see others doing so. That tendency, he believes, may explain why so many people are willing to dish out personal information on the networks.

Information gleaned from such sites is useful not only to identity thieves, but to marketers and other legitimate business interests. Sometimes, the information can be used to find thieves, according to research co-authored by Shawndra Hill, a Wharton professor of operations and information management, and AT&T researchers Deepak K. Agarwal, Robert Bell and Chris Volinsky. Hill says a person's pattern of behavior on various networks can reveal tell-tale signatures, similar to fingerprints -- or perhaps "friendprints" -- that can be used to solve a wide range of business challenges, from targeted marketing and advertising to fraud detection.

The study, titled "Building an Effective Representation for Dynamic Networks," originated as an approach to fraud in the telecommunications industry. The authors were interested in the problem of identifying phone service subscribers who repeatedly default on their bills by signing up for service under an alias. The problem is not new. However, the focus of the paper was to show how to clearly identify a customer's social network signature and match it to signatures created by customers who had previously defaulted. "Repetitive defaulters may be identified despite their aliases over time by their 'social network signature,'" according to the paper.

"In other words, consumers are who they call, e-mail or IM," says Hill. "Though it is not difficult to sign up under an alias, it is extraordinarily difficult to change one's friends and family." Large telecommunications firms, Internet providers and social networking sites such as MySpace and Facebook may have rich sets of data in which social network signatures can be identified. Hill says the technique is still being perfected; its accuracy rate is currently about 95%.

Still, the security and privacy questions pose tricky issues for marketers, who have been looking for successful social network advertising models. According to research firm eMarketer, spending on such advertising will be about $1.29 billion this year, up from a projected $1.17 billion in 2008. MySpace garners half of the revenue pie. Social network advertising is only a small slice of the projected $25.7 billion that will be spent on online ads in 2009, according to eMarketer.

Wharton marketing professor Eric T. Bradlow says the Holy Grail for marketers is to track consumers and their friends -- and what they say about a product -- via social networks. "

People are more willing to divulge information for social purposes, and the lead users are 18 to 25 years old," Bradlow notes. "The social norms around privacy aren't going to be what they were before."But just as Acquisti noted, acceptable social norms will be subject to context. "Let's imagine that a credit card company had the information you put on Facebook," Bradlow says. "You'd be appalled. It's context. People want to say when and where data is shared."

Economic Recovery: Are Happy Days Here Again?

Wall Street has just seen a two-month rally that included a whopping 39% rise from the recent rock-bottom prices on the Standard & Poor's 500. In addition, during several consecutive weeks, new U.S. jobless claims have dropped. Even quarterly reports from the battered banking sector have given investors some optimism that the worst-case scenarios will not happen.

So does that mean the band can strike up "Happy Days Are Here Again" to herald the arrival of an economic recovery, and the end of America's longest recession -- now 18 months and counting -- since the Great Depression of the 1930s? Most financial experts at Wharton and elsewhere insist that the much-talked about recovery is not here yet, despite some of the first hopeful data in months -- and they remain concerned that the recovery will be weaker and take longer to gain momentum than past slowdowns.

Maybe there will be a rally today since the European markets are up?

Creating Advantage

Increasing complexity and change, volatile economic conditions and an ageing workforce are beginning to take a toll on organizations worldwide. Meanwhile some businesses and whole industry sectors are in crisis as they struggle to meet the rising demand for skilled people.

In this climate, people have become the new competitive advantage for business, according to a report by The Boston Consulting Group and the World Federation of Personnel Management Associations. The report, Creating People Advantage: How to address HR challenges worldwide through 2015, is based on a survey of 4741 human resources executives in more than 80 countries as well as interviews with senior executives in 19 countries.

Are you creating advantage with the new workforce dynamics and demographics?

Health Care Reform - Now or Never

Obama has noted that health care reform is a key priority for his administration. This is a long time coming since Clinton failed during his administration. There is a move in congress to change benefits and make it more affordable for all Americans. Further, the reform is focused on leveling benefits equal to what the congress receives now.

Senator Max Baucus (D-Mont.) said he is drafting the health reform measure, which he expects to unveil next week. He told reporters that taxing employer-provided benefits is "perhaps the best way to raise money for an overhaul of the health-care system" and offered details about the form that tax is likely to take.
Baucus said his proposal is likely to cap benefits at "a level higher than the actual benefit that members of Congress receive today." An employer-provided plan worth less than that level would remain tax-free, he said, while any benefit exceeding the cap would be taxed as ordinary income.

Such a tax, if adopted, would be phased in over "several years," Baucus said. And it would be likely to "grandfather" in health benefits set as part of a collective-bargaining agreement, he said, allowing union plans to remain tax-free until new contracts can be negotiated.

Baucus declined to say how much money the proposal would generate. The nonpartisan Joint Committee on Taxation estimates that taxing employer benefits above the value of the Federal Employees Health Benefit Plan, adjusted for inflation, would generate nearly $420 billion over the next 10 years -- a sizable chunk of the $1 trillion or more likely to be needed to expand coverage for the uninsured.

Is this the beginning and will it ever pass. there are 47 million Americans without health coverage and there is a large silent group that is currently under insured. Help may be on the way.

Weak Integrity Got Us Into This Jam - And Strong Integrity Can Get Us Out

The current economic crisis is a result of integrity failures: Many people did not live by their word. Financial executives, lobbying for deregulation, said they would self-police. They didn't.

They wrote mortgages and issued credit cards, assuring their customers that the payments were manageable. They weren't. I am no finance guy, but I knew that a variable rate, interest-only mortgage is a very, very bad idea. I gotta believe the professionals knew it too. Finance gurus created products that systematically understated risk and overstated earnings. They knew better. They were gaming the system. Looking for loopholes. Looking for the ridiculous twist of the rules that magically makes you a winner. According to their still flush bank accounts and high salaries, perhaps they were right.

But the rest of the world is noticing that perhaps they were not. We have had enough gaming. Time for a little straight talk and hard work.

There is nothing more fundamental in business than this question: "How good is your word?"
It is not just a few powerful villains; we have all slipped a little. We make distinctions between things we "promise" and things we merely say we will do. It should not make a difference. We think about fulfilling the letter of our contracts, rather than striving to fulfill the other party's understanding of our agreements. The first will keep us out of court...but the second is what makes relationships thrive.

The Integrity Dividend is the measurable bottom-line business payout of people seeing you as living by your word. Clients value your brand. Suppliers cut you deals. And employees stick around and work their hearts out for you. There are dollars to be made here. Competitive advantage.

Living by your word is hard work. Getting others to see you as living by your word, in this cynical time, is harder still. But it is the only game worth playing.

It is not all it takes to lead – but no leadership happens without it. It is not all it takes to be ethical or moral – but morality without it is hollow sanctimony. Integrity is essential.

Unexpected events, and even expected change, make the integrity task harder. It requires skill and focused effort. But it pays off. Consider it an investment in the essentials of doing business – essentials which we seem to have forgotten. When we practice integrity, we become more effective – as people, as companies, and as a society.

Weak integrity got us into this jam – and strong integrity can get us out.

Read the book: The Integrity Dividend: Leading by the Power of Your Word by Tony Simons. San Francisco: Jossey-Bass, 2008. Available everywhere.

The real question here is where would you place your integrity on a scale from 1-10. If it is not a 10 then you are in the wrong line of work. Not just you but anyone who works for you is scared by your reputation. It makes their work and job all the harder and a large hill to climb.

Big Ideas and Hard Times - Can the Possibility Go Together

We are currently in a period that we can reasonably call hard times - we're in a recession in fact.

"Some of the most powerful and lasting management methods were launched during tough times, when companies needed new ways to manage costs and grow.

Here is a look back at some of the biggest ideas over the past 100 years." Jena McGregor, Business Week.

What innovation or big idea are you working on to add to the list? Thanks Peter Roche for this.

When Workforce Planning Meets the Talent Shortage Myth

You don’t hear much about the “Talent Shortage Myth” anymore.

Just a year ago, you could hardly turn around without bumping into overhyped media coverage about how the baby-boom generation was going to be retiring en masse and how this was going to create a huge talent shortage for American business. I didn’t buy this notion then, and of course, that kind of BS is completely laughable now given what has happened to the economy.

In fact, a lot of baby boomers want to stay on the job longer these days given what the recession and economic downturn have done to their IRAs, 401(k)s and other retirement accounts. These are people are a lot like me—boomers who want to work as long as they can, or at least until age 70 so they can maximize their Social Security payout.

But in an odd twist, a lot of boomers are now retiring unexpectedly, and “Instead of seeing older workers staying on the job longer as the economy has worsened, the Social Security system is reporting a major surge in early retirement claims that could have implications for the financial security of millions of baby boomers,” according to a story in the Los Angeles Times.

“Since the current federal fiscal year began Oct. 1, [Social Security retirement] claims have been running 25 percent ahead of last year,” the Times story adds, and “that compares with the 15 percent increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration.”

This shows you just how hard it is getting a fix on where workers’ heads are and what they might do, and it makes long-range workforce planning extremely difficult. In fact, just last December, a CareerBuilder survey found that 60 percent of workers older than 60 said they planned to postpone retirement and stay on the job.

What has changed, of course, is the economy. While I believe the CareerBuilder survey accurately captured the mood of boomers wanting to continue working back in December, it clearly didn’t anticipate the huge plunge in the economy and job losses in the first quarter of 2009. Yes, a lot of older workers want to keep working, but what do you do if you lose your job, can’t find a new one, and have the Social Security retirement option available?

If you are in that kind of fix, you do what most people would do: You take the retirement money and run, even if that’s not what you planned or wanted to do.

Here’s what is going on, the Times story indicates: “Many of the additional retirements are probably laid-off workers who are claiming Social Security early, despite reduced benefits, because they are under immediate financial pressure, Goss and other analysts believe.” And, the story adds, “The ramifications of the trend are profound for the new retirees, their families, the government and other social institutions that may be called upon to help support them. On top of savings ravaged by the stock market decline and the loss of home equity, many retirees now must make do with Social Security benefits reduced by as much as 25 percent if they retire at age 62 instead of 66.”

This just goes to show you how ridiculous it is trying to make broad-brush assumptions—like baby boomers retiring in a huge wave—given how unpredictable the economy can be. And it just shows again that no matter what part you play in the workforce—employer, manager or down-in the-trenches employee—the smart thinking in this economy continues to be pretty simple: Always hope for the best, but make certain that you prepare for the worst.

So what talent drought? Are you one of those that still think this?

Taking the Pulse

When was the last time you as the senior HR person in your organization held a meeting with the rank and file in your organization? Taking the pulse of your organization is extremely important to make sure your HR strategy is working within the rank and file. 

As a senior leader, I held meetings with employees, no more than six(6) at a time to discuss what was going right in the organization and what was going wrong or missing the mark. Why six you ask, well, I only had six seats in my office. I lead every meeting with the following statement, "this is your meeting to vent, commend, criticize, or otherwise and that it was a safe harbor for them". I also told them that the success of these meetings depended on the confidentiality they entrusted with me. I can tell you that there were a lot of good solid suggestions on how the business was run, what could be fixed, enhanced, etc. 

As you may recall these meetings were much like the Skip Level Meetings that GE ran throughout their businesses. The best ideas and direction comes from the employees. 

I am sure if you are in touch with the business that you are running such meetings and if not then you are missing the mark on what your overall responsibility is as an HR leader. Email me 

wgstevens2@gmail.com on what you have done or doing in our organization and I will post it on my blog. 

Interesting Analytics on HR Changes

In the most recent Workforce issue it had some interesting statistics that relate to the economy and how businesses have reacted. The one statistic that troubles me is the number of companies that have pared their training budgets. I hope this statistic does not mean they are placing less emphasis on leadership development. So here are the statistics:

Hiring freeze - 72%

Layoffs/reductions in force - 72%

Organizational restructure - 49%

Mandatory shutdown or furlough - 41%

Reduced workweek - 22%

Salary freeze - 60%

Salary reductions - 21%

Reduced employer 401(k) match - 22%

Eliminate/reduced training - 42%

I am sure each HR leader has been deeply involved in these decisions but I can only hope that the training and development budgets were the last resort change. If you want to keep your people don't forgo training.

Recruiting in the 21st Century

Well how are you recruiting today verses last year or in the past. Job boards are down and declining from the big revolution in the 90's. Board traffic is declining rapidly, the percentage of hires from boards are declining, candidates looking for jobs are frustrated with the overload of non-related searches and that is declining. 

So what is increasing? Social networking blog traffic, and the real staple of all recruitment personal referrals. So if you are stuck in the 90's using Monster, Jobster, Hotjobs, etc then you better start maximizing your recruitment strategy by joining and advertising on social networks, blogs that are business specific and user groups. You also need to do deep web searches using boolean logic, X-ray, and flip searches and strings. 

There are lots of other ways so if you are not utilizing the 21st century techniques then you need to get with it pronto. Recruitment 2.0 and next generation 3.0(soon to come) better be in your recruitment strategy and budget. 

Stop Your Best People From Walking When the Economy Recovers

Today, enough cannot be said about retaining your employees. When the economy turns around you will see people leaving and most of the time it is your star performers. The Hay Group article below identifies this trident issue (economy, money, advancement)

Increasing engagement means making greater use of non-monetary rewards. Providing better support for success involves looking for ways to remove those organizational hurdles that hinder employees during their working day. But it's crucial that organizations focus on two key concerns to retain and motivate their talent: increasing employee engagement and developing systems that provide better support for the success of their employees. Doing one without the other will not lead to effective employees who are ready to go the extra mile for the organization.


Retention of top talent is an important concern in both good times and bad. While a soft labor market may have depressed turnover rates in many organizations today, retention issues can be expected to surface once labor markets strengthen. Even in the present environment, options are still available to top performers. Savvy organizational leaders recognize that their best people work for their organizations because they want to, not because they have to, and treat them like 'volunteers' regardless of market conditions.


While compensation is often a factor for employees when they consider new employment, it is seldom the precipitating factor. Nonetheless, retention strategies commonly focus on compensation, for example, retention bonuses and stock options.


The downturn has made it more difficult to rely on pay to keep key people committed, so how should companies react?

To foster high levels of engagement, companies must make greater use of non-monetary rewards such as career growth opportunities, meaningful job designs, training, and recognition programs. For these measures to be effective, there must be a clear link between performance and rewards in the minds of employees. The best way to do this is to make sure there is clear differentiation in performance ratings between employees. Those differences in performance should be reflected in meaningful differences in pay and advancement prospects.

Our employee opinion research shows that high employee engagement alone does not guarantee an organization's effectiveness. What's missing is real employee enablement to position motivated employees to succeed. In fact, our findings suggest that while organizations in the top quartile on engagement demonstrate revenue growth 2.5 times that of organizations in the bottom quartile, companies in the top quartile on both engagement and enablement achieve revenue growth 4.5 times greater. But how do you ensure that you're doing the best possible job of enabling your employees? The first step is to make sure you're putting the right people in the right jobs, as employees in the wrong role can quickly become disillusioned and unproductive.

In deploying talent, leaders must consider both the requirements of the job and the employee's ability to meet them. They also have to think about the extent to which the job will draw upon the employee's distinctive competencies and make the most of them. It's also crucial to root out bad business practices, such as unnecessary or duplicated work, to ensure that work environments are supportive of high levels of productivity.

Create the right climate

Finally, organizations have to understand and manage the work climate. The benefit of a positive work climate is often underestimated, but our research shows that business results can vary by as much as 30 percent purely due to differences in the work climate created by a manager. We will provide further insights into how organizations can create positive work climates in one of our upcoming ‘rethinking reward’ articles.

Six steps to better engagement and motivation

In order to succeed in engaging and motivating employees, organizations should:

• ensure that there is a clearly communicated link between performance and rewards within the organization
  
• ensure that there is proper differentiation in performance ratings between employees


• root out bad business practices, such as unnecessary work and duplication, that can adversely affect employee enablement


• put the right people in the right jobs by focusing on job sizing and the kind of person that best fits the role


• monitor and improve the work climate within the organization by ensuring that leaders have the right competencies and management styles to motivate employees


• focus on non-monetary rewards such as career growth opportunities, development, and recognition programs
  

If you look back on the posts regarding retention (4/2/09, 3/5/09, 2/23/09, 12/15/08) you will see how important I think this issue is. Check it out.

The Importance of Leaders

There was a great article in USA Today yesterday (May 18th, Money section) by George Buckley, CEO of 3M. It is a quick read and for all HR practitioners it is important to take note. During these tough economic times Buckley says your company should focus on leadership despite the recession. He provides tips that are noted below:

• Don't promote leaders too quickly Give them time to reflect on their failures;
• Leadership cannot be planted in someone;
• Poor performers build resentment. Weed out the workplace garden before you fertilize;
• Leaders, too, need praise and not to be berated, and,
• Choices that rise to the top are either dandelions or chickweed, not roses.

These are sage comments coming from a very hardworking and successful CEO. I believe that we do not do enough in business today to cultivate our leaders and weed out poor performers especially during downturns.

1 Year and Counting

Well, it has been 1 year since I started the InnovativeHRStrategy blog and I can say it has been so much fun. I have enjoyed imparting knowledge to people who view my blog and hope that my insights have helped them in their respective roles.

Thank you to all the thousands who have come to visit InnovativeHRStrategy, took part in the polls, and clicked on AdSense. I hope you will continue to hit the posts in the future. If you have any questions, issues you feel should be addressed please email me at wgstevens2@gmail.com or on Twitter at www.twitter.com .

Vision Brings Hope

Life is uncertain, unpredictable, and lately, just plain bizarre. Is it possible to find certainty in an uncertain world? Let me answer the question later in this article. Certainty can mean “a conclusion or outcome that is beyond doubt.” My experience has been that when we formulate visions in our minds we most times birth images and ideas of hope.

Is it contradictory to think that certainty can be found in the middle of uncertain times and social environments? Well, it depends on where you are looking for the indicators of certainty. Finding certainty in the midst of turbulent times is possible when one looks for it within, rather than without. My opinion is that this process begins calibrating your vision for the future. What is your compelling vision for your future? How would you like to see your future unfold?

What is a vision and why can it help bring some rest in the middle of unstable times? Vision actually means an image or concept in the imagination. In the science called parapsychology a vision is an image or series of images seen in a dream or trance, often interpreted as having religious, revelatory, or prophetic significance. When we take the purely positive viewpoint a vision is a beautiful or pleasing sight that we have constructed in our mind. Vision can further mean an idea, a mental picture or a vivid disclosure. The mind can achieve marvelous things, one of which is imagining a preferred future that consists of your most noble passions, dreams,
aspirations and images.

Try this. Imagine the happiest place, a time in personal history and the most peaceful scenario you can. It may be helpful to silence your mind, close your eyes and take a few deep breaths. Visualize a place, time and scene that make you feel peaceful, joyful and fulfilled. Write this visualization on a piece of paper nearby. This short description will serve later as a project for you in your mental health development.


Vision brings hope many times. How do I know this? Well, personally, each time a vision is forming in my mind, expectancy is emerging, as well. Vision and hope are word companions and work together to help us in overcoming certain negative thoughts and discouraging images in our minds. Look at some of the definitions of vision and hope:

Vision - Hope
A dream - Expect
An idea - Trust
A mental picture - Anticipate
An image - Wish
Visualization - Expectation
A revelation - Anticipation

To have a vision that brings about hope is not a magic formula. But much like optimism, vision and hope improve our mental health and our disposition. For instance, during the economic crisis of late, an idea came to my mind that probably would not have come under my normal work pace and multi-tasking lifestyle. Because there was a little free time and a little less action in my schedule, a great vision came to me, which formed into a great idea which caused me to anticipate how that could grow into implementation steps. This vision, then idea, brought me hope. Hopefulness makes a dreary day into a brighter day! Confidence and anticipation follow
closely behind vision and hope.

Hope is a powerful word and a more powerful thought. Nations and cultures with no hope have greater crime rates, lower economies and measurable unrest and underachievement. Conversely, nations and people with hope seem to overcome crisis after crisis, and change after change. Challenges seem to become incentives for accomplishment when people have hope. Hope never prospers when things are going well. It takes challenge, change and crisis for hope to flourish.

Vision and hope are actionable thoughts that need our attention to become energized. As a coach, I suggest that an on-going action plan helps you to clarify your visions and your hopes. These should be clear, achievable and time bound. Having visions and hopes to work towards brings the energy necessary to overcome the doldrums and the tendency to slide backwards in our development.

This week, attempt to write your vision and hope ideas in a journal or personal development plan. If you do not have a personal vision statement, then maybe start there. Include your long term, intermediate and short term goals that will get you to your vision. If you are not sure how to begin this, enlist an accountability partner or hire a coach.

This is a major excerpt from Dr. Rick Forbus's (Principle at TROVE) article on Vision & Hope.

My thoughts are if you have a vision you do not need a coach to execute it.

Executive Pay for Sustainable Performance

The recent financial crisis has exposed financial services companies that have not effectively managed risk. Bear Stearns, Merrill Lynch, and Lehman Brothers, three titans that had weathered the Great Depression, World War II, and September 11, could not survive the current economic turbulence. In the aftermath of 2008, survivors must redesign risk management and employee rewards to ensure sustainable performance. Investors will increasingly require that executive pay be tied to sustainable performance measured by economic profit to take account of both total capital deployed and risk.

Despite unprecedented fiscal and monetary interventions by governments and central banks, the global economy remains highly volatile. Uncertainty in markets persists because investor and creditor trust has been breached in a way that has not been experienced in generations. While governments, central banks, and regulators have taken aggressive actions to combat the painful symptoms of 'frozen credit' and 'toxic assets,' they are reactive, insufficient, and have long-term inflationary consequences. Resolution can only occur by addressing the root causes of the breach in trust.

A concentration of risk

Although the current financial crisis may be the broadest and most severe in many years, financial emergencies requiring government intervention have been a pattern in the sector. In the recent past we have seen Russian and Latin American sovereign debt defaults, the reinsurance spiral and Lloyds of London failure, the collapse of Long Term Capital Management (whose principals were supposedly the experts on risk!), and the US savings and loans debacle. The common factor in these crises was the concentration of risk in a few areas that appeared to be producing high returns, without providing adequately for the possibility of a disaster. The concentration of risk often has been disguised by the recycling of the same risks among industry players. Reward programs that pay out a substantial proportion of nominal profits (or even of revenues) have operated to encourage this process, as short-term revenues and nominal profits tend to be highest from the highest risk investments – for so long as the risks do not materialize. Even companies that recognized the risks were afraid to change their reward systems for fear of losing out in the war for talent.

The transparency challenge

Post 2008, investors are demanding from management greater transparency, accountability, and long-term performance sustainability than ever before. But transparency in financial services is a difficult goal to attain. Financial instruments are pioneered daily, and it is difficult to adequately describe the complexities of a single transaction, let alone a diverse global portfolio. The credit default swap market illustrates the problem, as it took the dramatic and sudden decline in the housing market to expose the riskiness of the assets. Timeliness is challenging (as we witnessed in 2008) because asset values change on a tick-by-tick basis. Determining the impact of a single change in the bid/ask spread of a highly leveraged asset can be misleading if not presented with great care. The continuing debate on marking to market centers on this issue, and is further complicated by the significant claims attached to any one asset at any point in time.

Finally, the issue of risk-adjusted performance in financial institutions is difficult since there are three categories of risk in financial institutions – credit, market, and operating risk. While Basel II has provided a useful standard for 'value at risk' and 'risk-adjusted return on risk-adjusted capital,' even the savviest investors can find these calculations difficult to interpret. Furthermore, transparency and timeliness are critical to these measures having any utility at all from an investor perspective. For example, highlighting in the 2009 Bear Stearns annual report that the company was overly leveraged by credit default swaps would not be of much use.

Keeping reward in context

Reward systems have certainly contributed to the problem and need to be radically overhauled. However, changing reward so that executives suffer if there is a financial crisis is not the whole solution. Financial crises are infrequent, so they only affect the executives in place at the time; they are also generally (almost by definition) not anticipated, so the possibility of a collapse tends not to affect executive behavior. Therefore, in addition to changing rewards:

• Financial services companies need to improve their risk assessment and to ensure that they are not betting the company on a single investment or on investments that are likely to be correlated in an economic or financial crisis. Given the long timescales, this has to be a governance and regulatory responsibility, not driven by reward - although part of top executive reward should be for doing this well.



• Companies also need to build up reserves against the inevitable losses from time to time, as insurance companies do. Arguably the excess of the risk-adjusted required return over the risk-free rate is an 'insurance premium' that should be reserved against future losses, not paid out in bonuses (or dividends).

Achieving risk-adjusted reward

Executive rewards must be based on measures of corporate performance that take account of the risks to shareholders' capital inherent in the business strategy. Notwithstanding complexity, investors will no longer be satisfied with the 'too complicated' excuse on risk-adjusted performance management.

Corporate performance must be assessed based on a broad framework of interrelated metrics that influence current expectations. To succeed, the framework must first and foremost be economically sound. The 'performance mathematics' must ensure that as levers are pressed, expected values are achieved and perceptions influenced accordingly. Second, it must be comprehensive and balanced. As Drucker reminded us, 'we manage what we measure.' History is replete with pay-for-performance issues stemming from improvement in 'measured' revenue growth offset by 'non-measured' expansion in assets or risk. And finally, it must be easy to implement. If it cannot be readily understood and tracked by all stakeholders, it will not work.

The two measures that should be used to tie executive pay to performance are total shareholder return (TSR) and economic profit (EP). TSR is the best de facto measure of long-term corporate performance, despite the difficulties of defining a peer group to measure relative performance and the potential impact of short-term price fluctuations.

EP is fundamentally the return on capital deployed net of its risk-adjusted cost. It is an essential measure because it ensures that return is calculated in the context of both the scale of capital deployed and its inherent riskiness. While this is a more complicated calculation for financial services companies since these companies are essentially 'spread' businesses, EP is superior to other metrics like earnings per share (EPS) and earnings before interest, tax, depreciation and amortization (EBITDA) since these do not consider risk and capital deployed.

However, TSR and EP must be managed through a performance framework. Exhibit I is an illustrative example of a performance management framework that connects TSR and EP with actionable enterprise operating metrics. From a board and investor point of view, the framework provides a holistic approach that enables effective assessment of 'performance' in the context of executive pay.

While this approach is not immune from the aforementioned issues of comparability and complexity, it is a useful paradigm for establishing a standardized approach to performance management. Investors made their voices clear in 2008 and a failure to tackle the problem will no longer be tolerated. The restoration of trust begins with executive pay for sustainable risk-adjusted performance.

Exhibit I. Performance management framework (illustrative above)

HR Friends After You Move Positions

I had a discussion with one of my former bosses the other day and it lead me to write this post on friendship.

We discussed each others current direction, he is a HR EVP for a discount retailer and I am now a full time blogger and Twitter fanatic. He was instrumental in my development from 1999 to 2006 and I can honestly say that I grew dramatically over that period of time due to his mentorship and guidance. Although we did not see eye-to-eye on every subject, policy, or strategy plan he listened and took in all that I was saying. Sometimes he would change his view and sometimes he would be steadfast in his direction. Though all of this we were close friends and each grew from our relationship, knowledge and insight.

What I can say is that there are many friends we establish during our working careers and those that are lasting are those that let a person grow at their own speed and have active listening in the process. Thanks Greg, you are the best.

Can you relate to this type of friendship and can you say that your former bosses are still good friends and still mentors even as you have moved on?

Leadership Skills & Emotional Intelligence

How is emotional intelligence related to the specific behaviors we associate with leadership effectiveness?

Findings: Higher levels of emotional intelligence are associated with better performance in the following areas:

􀂉 Participative Management
􀂉 Putting People at Ease
􀂉 Self-Awareness
􀂉 Balance Between Personal Life and Work
􀂉 Straightforwardness and Composure
􀂉 Building and Mending Relationships
􀂉 Doing Whatever it Takes
􀂉 Decisiveness
􀂉 Confronting Problem Employees
􀂉 Change Management

Participative Management reflects the importance of getting buy-in at the beginning of an initiative. It is an extremely important relationship-building skill in today’s management
climate in which organizations value interdependency within and between groups.

Putting People at Ease gets at the heart of making others relaxed and comfortable in your
presence. From the perspective of direct reports, putting people at ease was related to impulse
control, which is defined as the ability to resist or delay the impulse to act.

Self-Awareness describes those managers who have an accurate understanding of their strengths and weaknesses.

Balance Between Personal Life and Work measures the degree to which work and personal
life activities are prioritized so that neither is neglected. High ratings from bosses on these
behaviors were associated with the emotional intelligence measures of social responsibility,
impulse control, and empathy.

Straightforwardness and Composure, which refers to the skill of remaining calm in a crisis and
recovering from mistakes, is related to several emotional intelligence measures. Not
surprisingly, ratings from bosses, peers, and direct reports on this scale are related to impulse
control.

Building and Mending Relationships is the ability to develop and maintain working relationships with various internal and external parties. Ratings from bosses on this scale were
related to only one measure of emotional intelligence: impulse control.

Boss ratings on Doing Whatever It Takes, which has to do with persevering in the face of
obstacles as well as taking charge and standing alone when necessary were related to two of the
emotional intelligence scales: independence and assertiveness. People who are high on
independence tend to be self-reliant and autonomous.

Direct report ratings of Decisiveness are related to assessments of independence. Decisiveness
has to do with a preference for quick and approximate actions over slow and approximate
ones. Independence has to do with the ability to be self-directed and self-controlled in one’s
thinking.

Another interesting relationship has to do with peer ratings of Confronting Problem
Employees, the degree to which a manager acts decisively and fairly when dealing with problem
employees, and the emotional intelligence measure of assertiveness. Assertive people are
able to express their beliefs and feelings in a nondestructive manner.

Change Management is the final Benchmarks scale to be connected with emotional intelligence.
This skill has to do with the effectiveness of the strategies used to facilitate change initiatives.

Conclusions: Leadership abilities vary according to rater perspective and level of emotional
intelligence. In general, co-workers seem to appreciate managers’ abilities to control their
impulses and anger, to withstand adverse events and stressful situations, to be happy with life, and to be a cooperative member of the group. These leaders are more likely to be seen as participative, self-aware, composed, and balanced. Is the need to develop emotional
intelligence abilities related to derailment behaviors? Findings: In his 1998 book, Working With Emotional Intelligence, Donald Goleman suggests that some of the reasons why people derail stem from a lack of emotional intelligence. Our research indicates the absence of emotional
intelligence is related to career derailment. Low emotional intelligence scores are related to:

􀂉 Problems with Interpersonal Relationships
􀂉 Difficulty Changing or Adapting

Ratings on Problems with Interpersonal Relationships from all co-workers—bosses, peers,
and direct reports—were associated with low scores on impulse control.

So what are your thoughts on this provoking subject? Email me at wgstevens2@gmail.com

Innovation as a Weapon in Global Competition

To say the global economic environment is undergoing the most rapid change in the history of business is to state the obvious. Unless you have been living under a rock for the past year, you know all about the market blow following the September 11 terrorist attacks, the dot-bomb
phenomenon and the collapse of Enron. To make matters worse, many American companies are increasingly facing resistance -- internal and external -- as they try to expand globally.

These events, combined with an already declining global economy, have left corporate executives on edge. Yes, it’s bad news and it’s depressing. The good news? Everyone’s in the same boat.

But now as before, the fundamentals stand: If you create a business that can adapt quickly and flexibly to the changing economic and cultural landscape, you may have the silver bullet you’re looking for.

A key to achieving this kind of quick response is learning how to inject innovation into decision-making at all levels of the organization. It won’t happen by decree from the
CEO, and I’m afraid there is no shortcut. Real innovation requires broad cultural change based on values, guidelines, and outcome-based measurement systems that give flexibility to all employees while mitigating risk for the business as a whole. Done properly, a company can
stay ahead of the change curve and beat the competition while also easing its move into new markets.

If you aim to achieve and sustain a leadership position in a global marketplace that never sleeps, your company must be a hothouse of creative thinking, flexibility and agility –
twenty-four hours a day, seven days a week.

Thanks to Stephen Shapiro for this blog insert.