Leadership

Most organizations are average—they are stuck and not growing. Average organizations have average leaders. It is still standard practice for many organizations to promote employees for their technical skills, rather than their ability to lead and inspire other people. This practice perpetuates mediocre cultures.

I believe there are three main reasons organizations are average:

1. Employees are promoted for technical proficiency, and not leadership proficiency
2. The leaders are conflict avoidant
3. Cultural health is not a strategic priority

To elevate the culture of your organization, you must set the standard for leadership and performance. This starts at the executive level.  The one thing the executive team must do today to positively impact the leadership quality of the organization is to declare that you will no longer promote for technical proficiency. To create an exceptional culture, you must start by creating exceptional leaders. This means instilling hiring and promotion practices that focus on leadership qualities, not technical skills. It also means we must train managers and executives to be influential, modern leaders. 

Organizations don’t transform, leaders do. Cultural transformation begins with the personal transformation of the leaders.

Below are five excellent books that can help set you on the path to creating an exceptional culture:

• The Advantage by Patrick Lencioni. This is one of my favorite leadership books of all time. Lencioni argues that cultural health trumps everything; that you can have the best marketing, sales, and technical abilities, but if you don’t have a healthy culture, it will impede your success. He shares tangible strategies for improving communication, team cohesiveness, and clarity in the organization.
• Firms of Endearment by Sisodia, Wolfe, and Sheth. Every executive leader should read this book. The authors share compelling statistics of how companies that focus on passion and purpose are significantly more profitable. If we focus on building relationships with people, we build successful, healthy organizations.
• Conscious Capitalism by Mackey and Sisodia. This book, co-authored by the CEO of Whole Foods, promotes authentic leadership that is centered around values and people. This modern philosophy is exactly what we need in business today—to not just focus on profits, but to focus on elevating how we do business with our employees and the world.
• Dare to Lead by Brenè Brown. We need more honesty in organizations, and we need brave leaders to step up and have the courage to lead with honesty and whole-heartedness. Brenè shares four skills to help leaders take off the armor so you can create organizations where employees feel safe, seen, heard, and respected. A must read!
• The 5 Dysfunctions of a Team by Patrick Lencioni. A classic book that identifies the five root causes of politics and dysfunction on teams, and how to overcome them. The dysfunctions are: absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results. Lencioni shares strategies for creating a high performing team.

It is possible to create a culture of exceptional leaders. It won’t happen overnight, but with consistent effort, it can happen. The first step is to make a decision—everything great that ever happens always starts with a decision.

If you want to be an exceptional organization, to make a bigger impact for your employees and your customers, make that choice.

It all starts with you.

These five books will prepare your mindset for elevating your culture and provide specific strategies for making it happen.

It was a week before Christmas, and my three kids were reenacting The Nutcracker in our living room when a fight broke out. My seven-and-a-half-year-old daughter, Olivia, started yelling at her younger brother because he didn’t announce her performance the way she wanted him to. She screamed at him to turn off the lights and start over, and Luca left the room in tears. As I attempted to intervene and bring some peace to the situation, Olivia started bossing her little sister around, scolding Clara as she touched the props Olivia had put out for her own performance. I tried to calm a now crying Clara, and told Olivia that she needed to play nicely with her brother and sister.

“They weren’t doing what I told them to do!” she yelled, obviously frustrated.

“People usually don’t do what you want when you yell at them,” I replied. “If you are calmer and patient, maybe they will want to play with you.”

This situation made me reflect on a comment that Sheryl Sandberg, COO of Facebook, made in an interview several years ago about girls and leadership. She said:

“I want every little girl who someone says ‘they’re bossy’ to be told instead, ‘you have leadership skills’ because I was told that and because every woman I know who’s in a leadership position was told that.”

When I first heard that declaration, there was a part of me that wanted to rally around that mantra, much like the initial positive reaction I have when I see those t-shirts made for young girls that say, “Future CEO” or “Girls Rule the World.” But there is a fundamental problem with these messages. While these phrases are catchy, should we really be engraining in our children that being a leader just takes a cool t-shirt and ruthlessness? That if you want to be a leader or a CEO, all you have to do is declare it and you can be anything you want?  This falls short of the reality that not everyone is meant to be a leader. There is much more to leadership than directing people around. Ask any professional in a leadership role, and I guarantee they will say that leadership is much harder than they expected.

We need to stop telling girls that being bossy is leadership.

In fact, these are the exact opposite behaviors that effective, influential leaders possess. Leadership is listening, supporting, collaborating, challenging others to work at a high level, guiding by providing clarity, influencing by creating a vision, and having the courage to be honest and have tough conversations. Leadership is not dictating, controlling, micromanaging, intimidating, or just about getting results. True leadership is people-focused, not task-focused.

I do believe there are still challenges for women in the workplace, and that biases do exist. There certainly are still times when confident and bold women are viewed negatively in the workplace, when a bold and confident man is seen as effective. But I don’t believe that “bossy” is effective—no matter a leader’s gender.

In my work with executives and managers, one of the most problematic issues in the workplace are people in leadership roles who are not effective because they have challenges with people. Most often these managers and executives were promoted for technical proficiency, not for leadership proficiency. And most of them were not provided any leadership training prior to being promoted. Many of them have been in leadership roles for decades, but as the landscape of work changes and employees seek more meaning and engagement in their work, the flaws of task-based management have proven ineffective. Because leadership is about getting results through relationships with people. Bossy is ego-focused, and leadership is others-focused.

So, I want every boy, girl, manager, supervisor, and CEO to know—bossy is not leadership.

As for my daughter, she does exhibit skills that—if channeled properly—may someday develop into good leadership skills. She is confident, bold, and determined. I am doing my best to help develop her skills over time by providing feedback and guidance.

But is her tendency to take control and order her brother and sister around leadership skills? Ask her brother, and he will surely tell you that she is just plain bossy.

Forty years ago, there was little talk in business about engaging employees, coaching and developing direct reports, or cultivating the company culture.  Many people stayed at the same organization for most of their career. Traditional managers, who were task-oriented and provided a lot of direction but very little inspiration, were tolerated. The command and control style of leadership prevailed.

The landscape of the work environment has changed. Employees have more choices, and will leave an organization where they don’t feel valued or appreciated. Traditional leaders won’t survive in the best organizations; there is only room for modern leaders.

We all have heard horror stories of ineffective, bad bosses. But in my experience, most traditional leaders are not narcissistic and power-hungry. They are mediocre managers (and executives) who lack the necessary leadership skills to be successful. They aren’t naturally inclusive, approachable, and engaging, and their leadership style reflects that.

To succeed in leadership today, managers need to be modern leaders. A modern leader is approachable, engaging and focused. The modern leader promotes an environment of productivity and positivity. A modern leader has emotional intelligence and understands the importance of cultivating relationships in the workplace. A culture is created by the people in the organizational system. If you want to elevate your culture, you need to elevate your leadership.

You may be a traditional leader and not know it. But trust me, your employees do. They are talking about it behind your back, and your high-performing employees are looking for a quick exit (if they are still there). Read below for what distinguishes a traditional leader from a modern leader:

Traditional leader:

• command and control
• doesn’t provide feedback
• focuses on finding mistakes and reprimanding; holds people accountable through fear
• very little engagement with employees
• no coaching or development
• believes the paycheck is the reward for work
• thinks he/she should know all the answers
• more task-oriented and in the weeds
• thinks he/she worked hard to advance and deserves leadership

Modern leader:

• encouraging and inviting
• provides timely, constructive, consistent feedback
• focuses on learning from mistakes; holds people accountable in a positive, principled way
• finds ways to consistently engage with employees
• sees coaching and developing as a top priority
• actively thanks employees and shows appreciation
• solicits ideas and suggestions from employees; encourages employee involvement
• more proactive, strategic, and visionary
• sees leadership as a privilege and enjoys serving his/her employees

The first step to transitioning from a traditional leader to a modern leader is awareness. Take time to reflect on your leadership and determine in what areas you need to develop.

It’s never been more challenging to be a leader than it is today. The best organizations only hire and keep modern leaders. If you want to improve your leadership, start by asking for feedback from those around you. The following questions can help to open the dialogue with employees so that you can gain relevant feedback to improve as a leader:

• What is one thing you would like for me to continue doing?
• What’s one thing you would like to see me do more of?
• What is one thing that I should stop doing?
• What are the qualities you appreciated most from the best leader you ever worked for?
• How can I support you better?

If you suspect your employees won’t be honest with you, then perhaps a formal or informal 360-degree assessment can give you the anonymous feedback you need to continue to grow and develop as a leader.

You may know Netflix as a top media entertainment provider with shows like, Orange is the New Black and Stranger Things, but behind this media giant is a high-performance company culture that seeks to attract and retain “stunning colleagues.”

Netflix believes in people over process, and promotes freedom, independence, and collaboration. Like many organizations, they have company values that sound great, but the difference is, they actually live by them.

Almost a decade ago, some of the secrets of the company’s exceptional culture were revealed in a document that was shared frequently on the Internet. The slide deck, entitled, Netflix Culture: Freedom and Responsibility not only detailed the company values, but also their philosophy on pay, benefits, and what actually makes a great company culture (hint: it’s not free espresso, sushi lunches, and great offices).

And it’s anything but traditional.

What stood out to me when I first read this document was a structure that managers use called, “The Keeper Test.”

Here is the Keeper Test that Netflix managers ask themselves regularly:

“Which of my people, if they told me they were leaving, for a similar job at a peer company, would I fight hard to keep at Netflix?”

And here’s what they do if someone isn’t on that list:

“The other people should get a generous severance now, so we can open a slot to try to find a star for that role.”

Many organizations talk about great workplace cultures, cohesive teams, and cross-departmental collaboration. But few companies instill practices that align with this strategy. Few companies take action when someone isn’t measuring up. It’s not what you say, it’s what you do. Talking about great cultures but not taking the necessary actions to create an exceptional culture only breeds mediocrity. Creating an exceptional place to work with stunning colleagues takes courage and consistency.

As a leader in your organization, ask yourself these questions:

• Who is not measuring up to the standards we have in place?
• Who do I need to give constructive feedback to (that maybe I’ve been avoiding)?
• Knowing what I know now, who would I not hire again?
• Knowing what I know now, who should not be in a leadership role?
• What I am doing as a leader to get in the way of creating an exceptional culture with stunning colleagues (examples include: not giving feedback, not coaching, not giving clear expectations, holding on to an underperforming employee, not modeling the values and attributes that create an exceptional culture)

If you want a high performing company, you have to do things differently than most organizations. Mediocre managers and executives breed mediocre cultures. You need bold and courageous leaders who are willing to make the tough decisions for the sake of creating an exceptional culture where stunning colleagues want to work.

I once worked for a credit union where employees dreaded calling the accounting department. There was an accounting specialist who was not friendly and often snapped at you if she felt you should know the answer to a question. She had been working there for over 20 years and had a reputation of not working well with people. But nothing was ever done about it. When she decided to retire, it was like the organization breathed a collective sigh of relief. The negative impact she had on the organization was gone, and it instantly elevated the working environment.

Holding on to a negative employee has many consequences—it can be destructive to the team, frustrate other employees, and create a negative working environment. Sometimes the best course of action is to terminate.

Deciding to terminate an employee can be a challenging and emotional decision. In my experience, most leaders avoid the decision and hang on to poor performers entirely too long, hoping the situation will get better. Instead, the situation usually escalates and causes more damage than if we had taken action earlier.

When we keep underperforming employees, we undermine a healthy culture. I believe keeping low performers contributes to the leadership crisis we have in our organizations today. By not effectively dealing with performance issues, we create a cycle of mediocrity that ultimately damages exceptional cultures. You simply cannot create an exceptional culture if you tolerate low performance and negative people.

Netflix is an example of a company that has created an engaged workplace built around excellence. In fact, one of their practices is, “adequate performance gets a generous severance package”. They believe a great workplace is “stunning colleagues”. Not mediocre, average, or solid colleagues. Stunning colleagues. This is a bold leadership approach that most leaders and organizations are not willing to take a stand for. Yet to create exceptional cultures, you need exceptional people.

It is a disservice to your top performers to keep underperforming employees. Yet leaders often rationalize why to keep low performers. There are typically two reasons: tenure or results.

Tenure—the employee has been with the organization a long time, which makes it hard to take action. The leader may have a personal relationship or friendship with this employee, which contributes to the challenge. So, the organization works around the employee, thereby lowering the standards.

Results—the employee performs the technical aspects of the job extremely well. They deliver on the goals, but don’t get along with people. Perhaps they are negative or aggressive, but we overlook it since they achieve tangible results in other areas.

To create a healthy, high performing organization, you need to have standards in place that take into consideration not only superior results, but also superior interpersonal skills. In exceptional cultures, you need to have the whole package. It is not enough to deliver on goals; employees must also have the qualities and attributes that contribute to a healthy culture—the ability to get along with people, foster positive relationships, and collaborate.

So how do you know when it’s time to terminate an employee?

As leaders, we have a responsibility to do all we can to bring out the best performance in each of our employees. And the employee also has a responsibility to live up to the values and expectations established by the organization. I believe most people want to do a good job. And once in a while, you will have someone who may exceed the technical job requirements but is a negative influence in the organization. Negativity, complaining, and blaming have no place in a healthy culture. They can quickly become a virus that is hard to bounce back from. These are people to take swift action on and move out of your organization—pronto.

For all other performance issues, there are things a manager should consider before terminating an employee (I’m not talking about legal issues to consider in this article—you should always consult an employment attorney if you are concerned about terminating). As a leader, you should determine if you have done your best to help the employee succeed.

Four things a manager should do before terminating an employee:

Determine the root issue.

Is the performance issue related to aptitude (knowledge and skills), attitude (confidence, focus, enthusiasm) or resources (equipment, time)? Understanding the underlying issue that is contributing to low performance can help you determine how best to work with the employee. You may decide that a training class may be necessary, or a higher-level intervention like working with a leadership or executive coach.

Establish clear expectations.

Does the employee understand what is expected? Beyond the technical aspects of the job, have you been clear about the qualities and attributes that are required to be successful (collaboration, positivity, ownership, etc.)?

Provide meaningful feedback.

Have you met with the employee to give honest and clear feedback on what is not working? Have you provided guidelines about what needs to improve to meet expectations? It is our responsibility as leaders to give employees information about their performance.

Schedule regular coaching sessions.

Beyond providing feedback, schedule time to coach the employee around the performance issues. While each situation is unique, this typically involves the manager working with the employee over a period of time to provide resources, suggestions, and instructions. Sometimes asking the right questions can lead the employee to discover the necessary steps to better performance.

Once you have taken the steps above and done everything you can as a leader, it is up to the employee to take initiative to improve performance. If your efforts fail, it may be time to part ways. In my experience, most leaders don’t take action quickly enough. Poor performers undermine your culture, and keeping someone who does not meet expectations is doing a disservice to them and to the organization. Exceptional cultures are made up of exceptional people. If you want to elevate the culture in your organization, don’t delay action on performance issues. Your top performers will thank you.

A couple of years ago, I read the book, Firms of Endearment where the authors share how world-class companies profit from passion and purpose. We’ve all heard that having engaged employees is important if you want a high performing organization. Yet in my experience, few organizations make engagement a priority. Many leaders think it’s difficult to measure engagement, so it isn’t a strategic focus. And most leaders think that engagement is about having happy employees. Engagement is much deeper than just having happy employees—it’s about productive employees, and productivity impacts the bottom line. In fact, a high performer can deliver 400% more productivity than an average performer!

What are Firms of Endearment?

• Companies that strive through their words and actions to endear themselves to all their primary stakeholders.
• They build a business on love and care: they build superior value and have close relationships with all their stakeholders.
• They profit from passion and purpose—beyond making money

The firms of endearment subscribe to the philosophy that investing in all your primary stakeholders—including your employees—leads to superior value and profitability. Examples of firms of endearment include Southwest Airlines, USAA, Starbucks, Patagonia, Trader Joe’s, Wegmans, and Ikea.

Below are the principles of the firms of endearment. Notice that they invest significantly more in engagement factors than most companies—training, benefits, and salaries.

• Subscribe to a purpose that goes beyond making money
• Executive salaries are relatively modest
• Any level employee has access to the executive level leaders
• Their employee compensation and benefits are significantly greater than the standard for the company’s category.
• They devote considerably more time than their competitors to employee training.
• Their employee turnover is far lower than the industry average.
• They make a conscious effort to hire people who are passionate about the company and its products. They hire for character, not just expertise.

Most executives would still not be convinced that it’s worth focusing on engagement. They would see the above principles and zero in on the significant expense of employee training and paying higher salaries and benefits. But this is where the book gets really interesting.

The authors compare the cumulative performance of the firms of endearment to eleven Good to Great companies in Jim Collins’s popular book. At the five-year mark, the cumulative performance of the firms of endearment and good to great companies are on par with each other, with both outperforming the S&P 500. But at the 10-year mark, the U.S.  firms of endearment deliver a cumulative performance of 410% compared to 176% of the good to great companies. And at the 15-year mark, the U.S firms of endearment deliver a cumulative performance of 1,681% compared to 263% of the good to great companies!  (http://www.firmsofendearment.com/)

The authors of Firms of Endearment disagree with Jim Collins on what defines a company as “great.” Collins described companies going from “good” to “great” by virtue of their having delivered superior returns to investors over an extended period of time (each delivered cumulative returns at least three times greater than the market over a 15-year period). The authors of Firms of Endearment believe a great company is one that spreads joy and fulfillment and makes the world a better place because it exists, not just because it outperforms the market over a certain period of time. And that distinction clearly makes a big difference in the profitability of the company.

I find this research to be extraordinary. If creating cultures based on joy, fulfillment, and engagement lead to significantly more profitable companies, than why aren’t more organizations investing in their cultures? Why do most executives still see salaries, benefits, and training as expenses? Because most organizations are still operating in a traditional model of leadership that focuses on tangible organizational functions like finance, lending, and marketing. These are functions that are easy to measure, and therefore a strategic priority.

Of course, finance, lending, and marketing are important. But if you want to build a long-term profitable business, you better start investing in your people. The people are your culture. And organizational culture is what separates merely good–and maybe even great–companies from exceptional organizations.