by Adam Hartung | Aug 12, 2016 | Diversity, Innovation, Teamwork, Television
Most of the time “diversity” is a code word for adding women or minorities to an organization. But that is only one way to think about diversity, and it really isn’t the most important. To excel you need diversity in thinking. And far too often, we try to do just the opposite.
“Mythbusters” was a television series that ran 14 seasons across 12 years. The thesis was to test all kinds of things people felt were facts, from historical claims to urban legends, with sound engineering approaches to see if the beliefs were factually accurate – or if they were myths. The show’s ability to bust, or prove, these myths made it a great success.
The show was led by 2 engineers who worked together on the tests and props. Interestingly, these two fellows really didn’t like each other. Despite knowing each other for 20 years, and working side-by-side for 12, they never once ate a meal together alone, or joined in a social outing. And very often they disagreed on many aspects of the show. They often stepped on each others toes, and they butted heads on multiple issues. Here’s their own words:
“We get on each other’s nerves and everything all the time, but whenever that happens, we say so and we deal with it and move on,” he explained. “There are times that we really dislike dealing with each other, but we make it work.”
The pair honestly believed it is their differences which made the show great. They challenged each other continuously to determine how to ask the right questions, and perform the right tests, and interpret the results. It was because they were so different that they were so successful. Individually each was good. But together they were great. It was because they were of different minds that they pushed each other to the highest standards, never had an integrity problem, and achieved remarkable success.
Yet, think about how often we select people for exactly the opposite reason. Think about “knock-out” comments and questions you’ve heard that were used to keep from increasing the diversity:
- I wouldn’t want to eat lunch with that person, so why would I want to work with them?
- We find that people with engineering (or chemical, or fine arts, etc.) backgrounds do well here. Others don’t.
- We like to hire people from state (or Ivy League, etc) colleges because they fit in best
- We always hire for industry knowledge. We don’t want to be a training ground for the basics in how our industry works
- Results are not as important as how they were obtained – we have to be sure this person fits our culture
- Directors on our Board need to be able to get along or the Board cannot be effective
- If you weren’t trained in our industry, how could you be helpful?
- We often find that the best/top graduates are unable to fit into our culture
- We don’t need lots of ideas, or challenges. We need people that can execute our direction
- He gets things done, but he’s too rough around the edges to hire (or promote.) If he leaves he’ll be someone else’s problem.
In 2011 I wrote in Forbes “Why Steve Jobs Couldn’t Find a Job Today.” The column pointed out that hiring practices are designed for the lowest common denominator, not the best person to do a job. Personalities like Steve Jobs would be washed out of almost any hiring evaluation because he was too opinionated, and there would be concerns he would cause too much tension between workers, and be too challenging for his superiors.
Simply put, we are biased to hire people that think like us. It makes us comfortable. Yet, it is a myth that homogeneous groups, or cultures, are the best performing. It is the melding of diverse ways of thinking, and doing, that leads to the best solutions. It is the disagreement, the arguing, the contention, the challenging and the uncomfortableness that leads to better performance. It leads to working better, and smarter, to see if your assumptions, ideas and actions can perform better than your challengers. And it leads to breakthroughs as challenges force us to think differently when solving problems, and thus developing new combinations and approaches that yield superior returns.
What should we do to hire better, and develop better talent that produces superior results?
- Put results and accomplishments ahead of culture or fit. Those who succeed usually keep succeeding, and we need to build on those skills for everyone to learn how to perform better
- Don’t let ego into decisions or discussions. Too many bad decisions are made because someone finds their assumptions or beliefs challenged, and thus they let “hurt feelings” keep them from listening and considering alternatives.
- Set goals, not process. Tell someone what they need to accomplish, and not how they should do it. If how someone accomplishes their goals offends you, think about your own assumptions rather than attacking the other person. There can be no creativity if the process is controlled.
- Set big goals, and avoid the desire to set a lot of small goals. When you break down the big goal into sub-goals you effectively kill alternative approaches – approaches that might not apply to these sub-goals. In other words, make sure the big objective is front and center, then “don’t sweat the small stuff.”
- Reward people for thinking differently – and be very careful to not punish them. It is easy to scoff at an idea that sounds foreign, and in doing so kill new ideas. Often it’s not what they don’t know that is material, but rather what you don’t know that is most important.
- Be blind to gender, skin color, historical ancestry, religion and all other elements of background. Don’t favor any background, nor disfavor another. This doesn’t mean white men are the only ones who need to be aware. It is extremely easy for what we may call any minority to favor that minority. Assumptions linked to physical attributes and history run deep, and are hard to remove from our bias. But it is not these historical physical and educational elements that matter, it is how people think that matters – and the results they achieve.
by Adam Hartung | Nov 18, 2010 | Current Affairs, In the Rapids, Leadership, Web/Tech
Summary:
- Most managers think it’s good to lower costs
- Most leaders focus heavily on earnings
- But focusing on costs and earnings leads to a dysmal spiral of decline
- Growth, rather than earings, distinguishes the higher value, and higher paying, companies
- Google is giving across the board pay raises and bonuses, because it has high growth
- Amazon, Facebook and Apple are hiring and paying more because they are growing
- Microsoft is cutting staff and costs, and its value is going nowhere as it focuses on earnings
- Growth is good, Greed (a focus on earnings) is the road to ruin
“Google to Give Staff 10% Raise” is the Wall Street Journal headline. All 23,000 employees (globally) will receive a 10% raise this year. At Mediapost.com in “Google Woos Troops with Cash and Raises” it is reported that additional to the 10% raise everyone will also receive at least a $1,000 cash bonus end of this year. According to CEO Eric Schmidt “We want to make sure that you feel rewarded for all your hard work.” For best performers, Google is making some pretty big (outrageous?) offers. In “Google Paying Big Bucks to Keep Talent” Mediapost reported a staff engineer was awarded $3.5 million in restricted stock to stay at the company.
Has your company announced anything similar? Hold on, didn’t you and your team work really hard? Don’t you deserve recognition for your efforts? And given your value to your employer, shouldn’t you receive something special to retain you, before you run to a higher paying job with better growth opportunities? Are we to believe all the good people, who deserve bonuses, are at Google? Or is something different going on besides just “hard work” leading to this generous cash dispersal to employees?
Google is growing like crazy. And that’s the difference. As Bruce Henderson, founder of the famous Boston Consulting Group once said, “growth hides a multitude of sins.” Growth surrounds the business with lush resources – it’s like being on the equator rather than the poles. When you grow, you can pay more to employees, and your suppliers. You can be Santa Clause, rather than the Grinch. Google is spending more money to keep, and hire, employees because other high growth companies, like Facebook, have been “stealing” them away. It’s a problem of riches in the battle to hire and keep people! Wouldn’t you like to particpate in this one?
Too many leaders confuse growth with greed (remember the famous Gorden Gekko speech from Wall Street about “Greed is Good”?) The outcome is a surplus of focus on “the bottom line” and that leads to cost cutting – which hurts growth. In the rush to show higher earnings, leaders forget earnings are the result of good management – and growth – and they begin looking for short-term ways to improve them. Greed, and the desire for more earnings now, causes them to forget that had they spent more time finding profitable growth markets yesterday the earnings today would be higher, and better. And they forget that without growth earnings are destined to decline!
Growth leads to a virtuous circle. More sales leads to more investment in new products and markets, leading to more sales, leading to more earnings, leading to more hiring, leading to higher pay, leading to better talent, leading to better ideas, leading to more new products taking you into more new markets…. a pretty fun place to work. Wheras greed leads to the whirlpool of despair. Cost cutting, product line rationalization, benefit reductions, lower (or no bonuses), headcount freezes, layoffs, no new hires, lower pay, more pressure on suppliers to cut their prices, no new product introductions, lost accounts, fewer salespeople, layoffs, outsourcing, facility closings ….. very much not a fun place to work. Where growth fuels a great company, focus on earnings inevitably kills the business.
We can see this difference when comparing performance of a few leading companies. Microsoft grew for many years. But now its strict focus on PC software has caused growth to lag. At Techflash.com (Puget Sound Business Journal product) “Hiring: Microsoft Stays Cautious as Google, Amazon Ramp Up” tells the story. Declining PC sales growth has led Microsoft to reduce its workforce by 2% globally the last year (~4,000). Google has expanded by 18% (+23,300 jobs). Since adding Kindle to its product line, and making other expansions, Amazon has added 44% to its workforce (~10,000 or 2.5 times the staff reduction at Microsoft). New products and new markets is helping Google, Facebook and Amazon grow – while focus on old markets has lowered growth at Microsoft.
Now Microsoft is attempting to save face by focusing on expense management, and earnings. Mr. Ballmer and his team hope Wall Street analysts will be happy with greed, by looking only at earnings, rather than growth. Microsoft’s CFO said “the best measure for our financial performance… comes down to EPS [earnings per share]… what we really need to do is drive earnings per share growth.” Microsoft missed the digital music wave, smartphone and tablet waves. It’s now struggling to rediscover growth, so it’s hoping to appeal to greed. Microsoft is taking the old approach of “if you can’t show you understand markets, products and growth then try to convince them you’re a good manager who can cut costs.” But how long can Microsoft manage its earnings when it’s not a significant player in the growth markets? Cost reduction is never the route to prosperity.
The last decade has seen the revenge of cost management. Coming out of the “go go” 1990s many leaders have proudly demonstrated their ability to avoid investment, cut costs, work employees harder, avoid increased pay, avoid new hires, send work to low-pay countries – and manage for the bottom line. Unfortunately, most publicly traded companies are worth less now than they were a decade ago. The DJIA and S&P 500 are worth less. The dollar has taken a shellacking. Fewer Americans are working and unemployment is higher. Tax receipts are down, and (as shown in the last election) Americans are pretty sick of a lousy economy. All this focus on earnings hasn’t done much for America’s workers, most American companies or the overall economy.
If you want to be “rewarded for all your hard work” through a big paycheck, a big raise, a big bonus – and you want employment that is filling and fun – then focus on growth. Help your company create new markets, with new products that people want. If you lead the marketplace with new applications and new solutions that fulfill unmet needs you’ll achieve good growth. Then realize earnings are a result of implementing that growth at effective prices. If you focus on the right thing – growth – then you’ll receive the results you want. Less focus on greed, with more on growth, and you might get rich.
by Adam Hartung | Dec 8, 2009 | Current Affairs, General, Leadership
In "Uptick Catches Entrepreneurs by Surprise" the Wall Street Journal points out that defensively-minded entrepreneurs are unprepared to undertake hiring or business expansion. Simultaneously, the Washington Post reports "Obama Preparing New Push to Add Jobs". What's clear is that there are incentives to undertake hiring, and with productivity at record highs it appears hiring needs are increasing. Yet, because they were looking in the rear view mirror many small business leaders are not prepared to participate and grow.
In "A Key To A Successful Business Plan" Forbes has just published my latest column, detailing why scenario planning is the first step for any business to overcome inertia and grow successfully. Instead of planning by looking to the past, we need to spend a lot more time looking at the future. Building scenarios that help us figure out where we want to be, successfully, in 2 to 5 years – rather than trying to replay the last inning over and over. Look at how well it worked at Apple the last decade!
"Now is absolutely the best time for your business to succeed. As the
collapse of Dubai World just demonstrated, enormous market changes keep
happening. Laggards and the unwise are failing, and businesses that
position themselves smartly to take advantage of market shifts are
winning big gains. Look at Google. There's never been a better
time to move ahead by developing plans for leading your business to
dramatic growth in revenue and profits." (read more of the article here)
My previous Forbes columns focused on the many current maladies of management. Insufficient innovation caused by Lock-in and obsession with outdated best practices has far too many companies performing far too poorly today. But followers of The Phoenix Principle know that it is possible to break out of this "doom loop" and be successful at growth through innovation implementation. Scenario planning is the first step, and a powerful replacement for traditional planning which wastes far too many cycles trying to review the past.
by Adam Hartung | Nov 22, 2009 | Defend & Extend, General, Openness
There's no doubt that many more people are looking for jobs than there are those hiring. As a result, organizations offering jobs can find themselves flooded with applicants. Several are complaining about how hard it is to find "the right person." Reality is most companies have been struggling to find "the right person" for a long time. It just wasn't as obvious.
According to The Wall Street Journal "To Find Best Hires, Firms Become Creative." Yet, these creative ideas are largely about finding new ways to restrict the number of people getting into the hiring funnel. Increasingly, asking potential employees to carry more cost of the hiring process. And often putting employees through a longer (sometimes days) battery of interviews. Yet, it is unclear that these new hurdles are helping organizations hire "the right person" any more often.
In today's changing marketplace, "the right" people are often those who can help the organization adapt. They think laterally about what is happening in the market, and how to develop creative solutions. They rely less on their historical experience, and more on their scenarios about the future. They pay a lot of attention to competitors, and push for decisions that leapfrog competitive actions. And they aren't afraid to Disrupt historical ways of behaving and recommend white space projects where new things can be tried. They don't try to Defend & Extend the company's Success Formula. Instead they seek improved results.
But that is not how hiring processes are designed. They focus on developing tight requirements. With so many applicants now, the focus is on making very, very tight requirements so resumes can be sifted efficiently for specific experiences. But this approach means hiring requirements are based on what history has dictated was needed. They reflect what the company used to do, how it used to hire, what previous employees did that supported the old Success Formula. Job requirements rarely look forward, instead they try to find homogeneous individuals who are like people that succeeded in the past. Usually by reinforcing the old Success Formula. They are out to find candidates who want to Defend & Extend the Success Formula, not evolve it to better results.
Most hiring organizations even have an "ideal prototype candidate." This goes down to specifying the type of degree, and the university attended. It may well include specifying a geography where the candidate was raised. Common certifications. A preferred set of previous jobs that are like what others have been through. These approaches are all about yielding candidates that look alike – not different. In most companies, an employee from Google. Amazon or Apple – very successful companies – could not get through the first round.
Then the prolonged interviews. These simply force candidates to be like the people doing the interviews. Rafts of studies have been done on interviewing, and they always return the result that interviewers like people who are like themselves. The interviewer has a sense of what they think made them successful – education, experience and problem solving approach. And they simply look to see if the candidate is like them. If the interviewing goes on for days, they even look to see if the candidate orders food like them, drinks like them, has the same approach to mornings or working late. The long interview approach merely ensures that candidates are more likely to be just like existing employees.
These approaches are about finding candidates that have a good "initial fit." But if the organization is in need of adapting to changing market conditions, is that the employee you really need? All the people at the old AT&T were much alike – but that company still didn't survive deregulation. The people at most airlines are much alike, yet outside of Southwest the airlines don't make any money. GM had an "ideal employee profile" yet the people leading the company could not deal with market shifts that sent the organization into bankruptcy.
Today your organization might well need new employees who are not like previous employees. They may well need different education. Different experiences. Work in different industries. And different approaches to problem solving. With so many available candidates, is your approach to hiring helping you find people who can help your company grow, or is it trying to find the kind of people who reinforced the old Success Formula? Are you hiring for the future, or searching for people like you hired in the past?
by Adam Hartung | Mar 10, 2009 | Current Affairs, Disruptions, General, Innovation, Leadership, Lock-in
Those of you who follow my blog should have noticed a new look and feel today! If you receive this missive in your email box via an RSS feed, I encourage you to stop by www.ThePhoenixPrinciple.com to see the new look.
As most of you know, I'm quite serious about helping organizations realize that they all can rejuvenate. It's a mission I started in 2004, and devoted my life to in 2007 when I started writing Create Marketplace Disruption. And now, in the midst of this terrible recession, it is clearer than ever that we need to realize that different phases of the lifecycle take different management approaches. And for most companies today, old fashioned notions of "focus" and "hard work" simply won't pull them out of this recession and toward better returns.
So I've rededicated myself to this mission. And part of that rededication is hiring some professional help with this website! Thanks to Public Words for the new design – and this is just a small part of what they will be doing to help me over the next year to increase the awareness of this mission and expand the base of people who want to help their organizations recharge, reignite and regrow! I'm also spending more time public speaking to companies, leadership teams, industry events and multi-company conferences about what we need to do so we can get back to growing! (If you know of groups, please let them know how The Phoenix Principle and Adam Hartung can help them get growing again.)
So, let me know what you think of the new look and feel! Your comments can help the site be more productive for us all. If you want things added, speak up! I read all comments, whether here or emailed my way, and my new team will consider them all. In addition to the look and feel, please offer your ideas for how I can drive more links, and attract more readers to our mission. Some of you offered great ideas recently (special kudo to reader Bob Morris for his insightful recommendations) about how to better use tags, technoroti tags and trackbacks. Please keep telling me places I need to link, and other things which can help grow readership. Your help in spreading the word is greatly appreciated.
Also, if you haven't noticed I'm not twittering. So you all are invited to reach out to me on Twitter – there's even a link to twitter me on the blog now! I'll be getting my facebook page up soon as well.
I read a fascinating report published today you can dowload from Bank of America claiming that this recession actually began in 2000 – and we're somewhere between 60% and 70% of the way through. Real estate could decline another 15%, and the big equity averages may drop another 20-40%! Whether that's true, or maybe we're closer to "the bottom", for most of our organizations to be prosperous again will take a different approach to management. One that overcomes Lock-in to outdated Success Formulas (often created in a previous industrial era) by obsessing about competitors to learn about market trends, never fearing disruption – internal or in the marketplace – and utilizing White Space to test new business ideas which can create better, higher return Success Formulas that fit newly evolved markets.
"Hiring Plans or Firing Plans" is the headline on Marketwatch.com. Previously, the lowest number achieved for "net hiring plans" was in 1982 when a net 1% of firms were planning to hire. But in the entire 47 years of the Manpower hiring survey (since 1962) never was the index a negative – where more firms plan to lay off than hire!!! That was until now, with the index at -1%. Just one year ago the number was +17%! (Find the complete Manpower Employment Outlook Survey at this link to their site.) More of the same "ain't going to cut it". Instead of looking for reasons to lay off workers, we have to realize that there are a lot of reasons to hire more! If we follow the right management principles – The Phoenix Principle – we can get going again! If we encourage Disruption and keep White Space alive we can continue to grow!
A past client of mine recently discovered a way to introduce a new line of products with 80% less development cost. But the new product is being delayed because the CEO feels he must lay off workers and slow down product launches – due to what he's reading about the economy. The CEO is afraid that a new product launch, which would cement the company's #1 position ahead of competitors gnawing at their position the last 4 years, would be a tough sell to the Board of Directors. The CEO is clearly focusing on the wrong thing – because his Board would be happier with growing sales and profits, and a reinforced #1 market position, than anything else! Especially now! But this company is almost afraid to grow, locked in fear of what to do next. Instead of reallocating resources to growth projects, and jettisoning "sacred cow" products that are low-profit and declining in sales volume, management prefers to follow today's popular wisdom of cutting costs, cutting new product introductions, even cutting revenues by sticking with historical products nobody is buying - so that's what they will do!!!
So, please be a part of this journey. Participate, don't just be a spectator. Provide your feedback and comments. And share the word! Nothing is more valuable than debate. Great ideas are developed in the marketplace, not in someone's head! Pass along the message, and get others involved.
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