In my work with individuals and groups I’ve often seen the disturbing tendency of intelligent, well-meaning people to make bad decisions. Decisions that shoot down the very results they are trying to achieve. So I got curious and decided to figure out what was going on…

My first clue was Dan Ariely’s book, “Predictably Irrational“. Based upon his research in behavioural economics, it analyzes how humans continually make irrational decisions, even if they are bad ones.

Whenever we make a decision, we rely on a jumbled mixture of inputs including emotions, intuition, logic, past experience, future expectations and more. From this stew emerges a decision which, for better or worse, leads us to our future outcomes.

But we’re mostly unaware how these various inputs can lead us to poor decisions. And for those of you in management and leadership positions, this is even more critical. Your decisions can affect the lives of hundreds or thousands of others.

Our mind is an incredible tool for simplifying our lives. Using its gift for pattern recognition, it takes what we’ve experienced, plugs it into a pattern with a set of standard reactions and responses, and then uses those responses whenever we encounter another experience that matches the pattern. In most cases this is a good thing. It allows us to quickly react to avoid harm or gain advantage without having to think about it too much.

The Root of the Problem

Can you imagine the chaos that would ensue if every time you encountered ice on the road, you had to relearn how to react? Conversely, have you ever been running an errand on the weekend and suddenly found yourself driving on your route to work? Well, that’s your subconscious mind running a pattern in an attempt to make life easier for you, but with the opposite effect.

The problem is that our minds also use the same technique in social, attitudinal and personal dimensions.

Imagine life 10,000 years ago in a small hunter gatherer village.

• Everyone around you lives pretty much the same life as you do, and have done so for generations.
• It would be unusual for you to meet more than 200 people in your entire lifetime.
• You engage in regular warfare with members of the neighboring clan who are easily identifiable through their differences in language and dress.
• The beliefs, patterns and attitudes you’ve adopted based upon your own experiences and learned through the narrative of your clan would likely serve you pretty well throughout your life. “Us good. Them bad. Berries here. Animals there.”

If someone from the neighbouring clan actually approached you peacefully, he would likely be an anomaly and it would be dangerous to re-think your opinion of the clan. Your next encounter with the clan would not end so well. In a low-change environment, holding on to pre-formed beliefs has its advantages. 

Now, skip ahead 10,000 years.

It’s the present day. But we are still making our way through our lives with pretty much the same mental equipment between our ears as our prehistoric hunter gatherer friends.

But things have changed.

• Today we meet thousands of people from a dizzying array of social and cultural backgrounds.
• Our skills at creating patterns (stereotypes) can now be counterproductive because there are simply too many variables to take into account.
• The world is changing so rapidly that many of the lessons our parents learned are no longer applicable.
• Our beliefs and attitudes from even 10 years ago may be poorly suited to the situation we find ourselves in now.
• The brain that served us so well for millennia may not have caught up with the world as it is now.

So what is the mechanism that actually stops us from easily accepting change? I was discussing a particularly challenging team with a psychologist friend of mine and he introduced me to the concepts of “Cognitive Bias” and a subset of that called “Confirmatory Bias”.

Cognitive bias

is a term given to the tendency for us to perceive things in ways other than they really are, often to protect the opinions we have formed. Here is an example:

You’ve just joined the production department of a printing company. At your last company you had a difficult relationship with the sales department and formed the opinion that salespeople could not be trusted. You’ve carried this with you and because of this, the relationship with the salespeople at your new company has started off badly. You’ve unknowingly created a situation that reinforces your previoaus bias. Often referred to as a self-fulfilling prophecy.

 Confirmatory bias

is the tendency to favor information, whether true or not, that supports our beliefs and to ignore information that contradicts them. This is particularly strong for emotionally significant issues and established beliefs such as abortion, partisan politics, gun control etc. It even goes so far as twisting ambiguous or contradictory evidence in such a way that it supports our beliefs. Here’s an example:

You believe in a particular political viewpoint so you begin to watch the news networks and read the newspapers that support your viewpoint. Online, you tend to visit websites that echo your thoughts and join forums filled with people of the same opinion. This further reinforces your beliefs. You begin to believe that everyone thinks like you. Evidence that counters your beliefs becomes suspect, leading you still further into the echo chamber of like-minded people.

Confirmatory Bias Self-Test: See If You Have a Bias:

Make a list of websites and information sources that you frequent. News, entertainment, forums, discussion groups etc. Now look at them and see how many of them follow a common theme. It could be left/right wing politics, religious affiliation/atheism, pro/anti war or many others. For instance, if you’re left leaning, you may enjoy PBS News and the Daily Show. If you’re right leaning, you may watch Fox News.

The problems begin when you focus on one side to the exclusion of the other. Many people are surprised to see how truly unbalanced their information diets are. Both sides usually have valid points. By reducing the flow of information from the “other side”, you are not only creating an information blind spot but also subtly convincing yourself that your side is “right” and that the “other side” is wrong. Even if the other side has a good point.

It’s Everywhere!

Once I studied these concepts a bit more, I began seeing how often they cropped up in the groups that I facilitated. (Yes, I know, that is itself a form of cognitive bias known as the “Frequency Illusion”!) We just can’t escape it. So, after attempting to adjust for my own bias about cognitive bias, I still maintain that it is one of the biggest killers of team and leadership success.

Wikipedia provides a great list of cognitive biases. Here are some examples from recent workshops of how these cognitive biases creep into conversations in sneaky, subtle ways:

• “We tried ERP software before. It didn’t work then, it won’t work now.
• Anchoring effect – the tendency to rely too heavily, or “anchor,” on a past reference or on one trait or piece of information when making decisions.
• Forward Bias – the tendency to create models based on past data which are validated only against that past data.
• “John always comes to these meetings with a hidden agenda.”
• Confirmation Bias – In this case, supporting a belief by using absolutes (always) instead of considering a different explanation for behaviour.
• “Ever since she got promoted, Mary has had a bad attitude.”
• Fundamental attribution error – the tendency for people to over-emphasize personality-based explanations for behaviors observed in others while under-emphasizing the role and power of situational influences on the same behavior.
• “Things were so much better before we decentralized.”
• Rosy retrospection – the tendency to rate past situations more positively than you would have actually rated them when they occurred.
• “This place would fall apart if I wasn’t here.”
• Egocentric bias – occurs when people claim more responsibility for themselves for the results of a joint action than an outside observer would.

And of course, all of these become further entrenched through the effects of the Confirmatory Bias which selects for information that supports your biases and ignores information that contradicts them.

What Can We Do About It?

All of these biases can play havoc with team and leadership effectiveness. We have found them particularly challenging when we work with teams whose members are deeply into their biases. This tends to be more severe in teams with lower mutual trust levels. On top of this, these types of people seem to also be more prone to the “Bias Blind Spot”. The tendency to see oneself as less biased than other people. How’s that for a recipe for self deception and poor performance!?

Taking cognitive bias seriously and compensating for it can lead you to markedly better team and leadership performance. We have seen teams and leaders make amazing changes by recognizing this and then using some simple techniques to ensure they don’t get caught in their own cognitive traps.

My next blog post will reveal some of the techniques we use in our workshops to counteract cognitive bias. Techniques that you can then implement in your own workplace.

Until Next Time… Keep Making a Difference!,

Trent.

In Alberta,Canada, where many of our clients do business, staff retention has become a critical and expensive problem. But there are ways to stem the tide!

The consequences of losing an employee are well recognized. Monetary costs alone are approximately $5000.00 to replace a frontline person, $40,000.00 to replace a professional and even more to replace upper management positions. Costs include training, orientation and unproductive time until they get up to speed. To say nothing of the costs in staff morale, disruption and stress.

It makes sense to do whatever you can to retain your talent!

In a tight labour market, employers try all sorts of strategies to keep people around. Some of these include:

• Increased pay
• Flexible hours
• Better benefits
• Longer/more flexible vacation time
• Support for education/training.

But these measures are stop-gap at best. And they are also the easiest things for your competitor to match in the bid for talent.

So what’s the solution?

According to theUK’s Chartered Institute for Personnel and Development, “It is relatively rare for people to leave jobs in which they are happy, even when offered higher pay elsewhere.”

So, it seems like the solution is to keep employees happy. And conversely, to avoid making them unhappy.

What does that mean?

Studies consistently show that employee happiness is largely based upon:

• Having a manager that you respect and enjoy working for.
• Camaraderie and teamwork in reaching goals.
• Having clear, consistent and manageable goals both individually and as a team.
• Feeling valued and respected by managers and colleagues.
• Having work that matches your abilities. Not boring or over-stressful, but challenging enough to be interesting and engaging.
• Having work that is meaningful
• Having a clear understanding how your work fits into the big picture.
• Having some control over your daily work and career path.
• Having a voice in decision making.
• Fair and competitive pay and benefits.

What is striking about this list is that they are largely “soft” and unquantifiable attributes. And many managers, having been promoted for great performance in their area of technical expertise (engineering, sales, financial, etc.), are poorly equipped to lead in this arena of human motivation, coaching and mentoring.

In looking at our own corporate clients, it becomes obvious how true this is. Those that view their employees as “human capital”, as plug and play units that can be traded and replaced in the open marketplace, suffer greatly in staff turnover, morale and productivity. If you treat your employees and contractors as mercenaries, they will behave as such and have little loyalty to your cause.

Conversely, those whose corporate cultures embody the attributes that lead to employee satisfaction, are productive, happy and stable with little turnover.

And if you don’t think that’s good enough…here’s the kicker. When you have a happy, healthy corporate culture, everyone in your corporation will project that to your suppliers, customers, regulators and stakeholders. As a result, doors will open, friction will be reduced and you will reach your corporate goals much more easily. After all, people like to do business with people they like.

It seems like a great place to be, but how do you get there?

Although it’s easiest to establish a healthy corporate culture right from the moment of inception, the good news is that it’s never too late to start.

Here are some general guidelines based upon our experience of what works.

1. Start from the top. If the corporate leadership is wholly committed to the process, it has a far greater chance of succeeding. Having said that, we have seen some amazing beacons of light where an inspiring manager has created a healthy sub-culture in an otherwise “dark” corporation. Sometimes that can even spread into other departments.
2. Expect Resistance (yes, even sabotage!). Those that have risen to positions of power will have done so on their ability to excel under the rules of the current system. They will be afraid that their abilities may not serve them as well in the new culture.
3. Invest in managers’ interpersonal skills and leadership abilities.
4. Consider replacing managers that are simply not capable with those that are. Ultimately they’ll be happier, you’ll be happier and their reports will be happier.
5. Consider a change of scenery to begin to seed new ways of being within your culture. A professionally facilitated offsite can allow you and your team the space to shift your attitudes and explore new roles.
6. Begin introducing small, well thought out changes that support the attributes you desire. Any change to the status quo creates new possibilities. It is always easier to change direction once you are in motion.

As you can see, keeping loyal staff is not just a quick fix. But the payoff for this kind of investment in your culture has never been higher. There are some simple steps you can take to get started and, if you wish, we can help you along the way. Contact us or check out our website

How would you like to get hundreds of actionable cost cutting ideas directly from your employees?

Many organizations are successfully cutting their costs without compromising quality. You can too, and it’s not as hard as you might think. All it takes is to properly tap into the collective wisdom and creativity of your people. Elegant, creative and widely supported ideas will soon be bubbling up from the front lines.

Most organizations agree that layoffs are the last resort. Fear quickly permeates the company (am I next??) and the ones left standing often suffer “survivor guilt” and resentment that leaves them inefficient and even counterproductive.

So why do these same organizations resort to layoffs while leaving countless other cost-cutting opportunities lying on the table?

It’s because from the perspective of the high-level spreadsheet, that’s the most obvious place to cut costs. It just seems too time-consuming to search for all the small ways that costs can be cut. However, your employees likely have hundreds of easily achievable cost cutting ideas already in their minds and many more that they can create during a facilitated brainstorming session. The trick is to efficiently collect this information and make it actionable. Fortunately, there is a simple, structured process to make this happen. But first…

The Three Essential Ingredients

You must be willing to provide these three essential ingredients:

• Transparency: employees must know what their departmental budget is and how it’s being spent. This alone often reveals significant opportunities as employees see obvious inefficiencies that management may have overlooked. Employees must also know and understand the process by which their input is going to be taken forward.
• Willingness to listen and take action: few things are worse for morale than being told your input is valuable and then realizing it was not taken seriously. Employees must be able to see how their ideas are progressing through the chain and finally being implemented.
• A Structured approach: it is critical that the idea generation process is targeted and specific. The challenge that you give your employees must be easily understood and focused. It is much better to ask “how can each department reduce its costs by 10%” than “how can we become better at what we do.” Once the challenge has been laid down, the process for gathering input must be engaging, efficient, creative and trackable.

Combined, these three ingredients give you the foundation of the Innovation Process Management (IPM) approach. This is a simple, structured process that distills the limitless creativity of your people into powerful, actionable ideas.
There are seven steps to IPM:

1. Define the Problem. It is critical create a focused and well-defined problem statement. Eg. “Our budget has been cut by 10%. We need to find ways to save money.”
2. Lay Down the Challenge. This is the statement that reframes the problem into a challenge that people can work on. Eg. “How do we save 10% in the departmental budget without laying anybody off?”
3. Get the Word Out: This is especially important if you wish to gather ideas from across a large organization. For smaller groups, this may not be necessary.
4. Gather Ideas: This can take different formats:Online idea gathering through an internal Wiki or via email. This is best when people already have a lot of ideas that they are ready to contribute. This gathers the most obvious ideas and allows for cross-functional discussions as people add to, comment on, support and improve the listed ideas.Facilitated brainstorming sessions. This elicits the most creative and high impact ideas that may be beyond the standard “thinking box”. Essential if you want to get new, groundbreaking ideas that really make a profound difference.
5. Evaluate Ideas: You can easily end up with 100′s of ideas. Now it’s time to evaluate them. Using pre-set criteria, you can quickly narrow them down to best ones. Once you’ve got the ones that past the first cut, it is critical to pass them by 3rd party experts to make sure that they are actually practical. These can be internal or external experts.
6. Implement: The process has given you the ideas. Now it’s time to implement. During this phase, it is critical to keep the communication lines open so that everyone involved in the process can monitor the implementation and see their ideas making a difference.
7. Measure:Use a set of indicators and metrics that you’ve defined for each idea to measure its success.

There are software tools specifically designed to help with this process, or you can do it by linking together internal resources.

Of course, in some organizations this will be more difficult than in others. If your people are already cynical because of past unfulfilled promises then you’ll have a bit of work to do to get them on board. So first, carve off a smaller problem and apply the IPM approach. This can easily be accomplished from idea gathering to final implementation in just a few weeks. Once you’ve gathered and evaluated the ideas, implement the best ones and communicate it across the organization. Then go to the next problem. Soon you’ll have the credibility to take on even the largest issues with enthusiastic buy-in.

The IPM approach combines the best of traditional brainstorming techniques with modern internet-based crowdsourcingapproaches and the latest advances in brain science. (For example, did you know that a recent study showed that people produce twice as many creative outputs when working in an environment where blue is the dominant colour? Do you have a “blue sky” room?)..

One of the hallmarks of the IPM approach is the independent expert peer review. Once you’ve gathered and clustered the ideas and decided which ones you’d like to move forward with, it’s time to give them the expert acid test. This ensures that the ideas are actually practical, effective and actionable and not just based upon the manager’s whim or a popularity vote amongst the employees.

Results

So what can you expect? These are the types of ideas that come out of the sessions:

• A company partnered with other companies to create a data center cooperative. Instead of each company running their own data center, they pooled resources into one commonly owned data center. They reduced their costs down to a level that “no vendor could touch”.
• One organization gave everyone a “one side used” recycling tray on their desks. That way, printouts that are no longer needed but have only been printed on one side of the page, can be returned to the auxiliary tray of the printer/photocopier and reused for draft and working copies.
• In order to keep their cabs warm, truck drivers were keeping their trucks running during cold weather while at the loading dock. The company provided small electric heaters for each truck and a convenient place to plug them in. Problem solved, fuel cost reduced, carbon footprint minimized.
• An employee suggested using bubble wrap instead of a cardboard box for shipping products. This brought the shipping weight to just below the next lower price break, saving the company three dollars per package on priority post costs. A huge savings when hundreds of packages were being shipped per day.
  
• A software company recalled corporate cell phones and created a cell phone pool that employees can borrow a phone from when required for business purposes. The company’s internal phone system already had the ability to forward calls to an external number, so when an employee borrows a “pool phone”, they simply forward their office phone to the cell phone allowing their colleagues to still call them without having to know which cell phone they have. This reduced the cell phone count by 70%.
  
• A government department that was split across two office buildings was incurring large inefficiencies because of the time it took employees to travel between the two offices for face-to-face meetings. This was also slowly eroding morale and teamwork. One employee suggested web cams be outfitted on every computer. Now most of the face-to-face meetings can be conducted via web cam and free software such as Skype. This had the added benefit of reducing the number of dedicated phone lines they needed to pay for.
• One organization was loath to cut the workweek down to 35 hours in order to save jobs until the employees themselves suggested it. Since it came from the employees, buy-in was automatic.

The list is endless. The point is that there are many ways to save money besides the traumatic cuts that so often come out of high level spreadsheet analysis. And although many of them may well result in only a few thousand dollars in savings, when you add 10, 50, or 100 of them together, they can make the difference between layoffs or not. Or even between survival and bankruptcy.

The less obvious benefit is that as the cost-saving culture takes hold, employees will naturally be looking for cost cutting opportunities. An employee on a business trip who previously would buy an expensive meal at the hotel just because “the company’s paying for it” may instead choose to go to a funky bistro down the street and pay a third as much for a healthier meal. Instant corporate cost savings.

Where currently you may have rigid spending guidelines and all the burdensome control and approval mechanisms in place to monitor them, you can now relax them a bit knowing that your employees are less likely to take advantage of the company. That’s the trust dividend in action.

When you use the Innovation Process Management approach, you wield the most powerful, cost effective and rapid toolfor tapping in to your people’s best ideas and then successfully implementing them.

For more information on managing the innovation process, you can download the course materials for MIT’s Sloan School of Management “Managing the Innovation Process” graduate course.

Or contact us and we’d be happy to speak with you about this powerful approach to innovation.

The financial crisis has likely shaken the foundations of your company. The way forward may seem unclear. But to paraphrase Einstein, “You can’t solve a problem with the same thinking that caused it”.

The concepts of sustainability offer a new way of thinking. Sustainability has been a growing topic for several years now. There are a number of forms of sustainability including economic, social, financial, environmental and cultural. Investments in these tend to be long-term, giving long-term positive results.

Unfortunately, the stock market punishes companies that do not consistently provide positive quarterly results. Many companies view sustainability concerns as a cost and not as an opportunity. This is a direct result of the short-term, quarterly focused planning cycle. In fact, even the most basic form, financial sustainability, is often put on the back burner in the face of pressure to perform.

Our recent North American economic downturn is a direct result of this short-term focus. Here in Calgary, where our head office is located, the main industry is oil and gas. In the last year even the largest most “stable” companies have lost up to half of their shareholder value. Everyone had been gripped in the oil boom of the last few years and borrowed massively to invest in the legendary “oil sands” of northern Alberta. As recently as a few months ago analysts were predicting $200 oil by the end of the 2008. Since then it’s gone below $50. This turns all the business models on their heads. Shareholders have had their investments wiped out.

If I were the CEO of one of these companies, how could I have avoided this? The obvious solution is not to borrow so much money for right when the development costs are highest, hoping that the oil price keeps rising. But it’s not that easy. If all the other companies around me are investing and their stock prices are inflating on the frenzied expectations of the market, the market will punish me for not doing so myself. I’m practically forced to do so. This, of course, assumes that I am aware of the reality of the situation and not caught up in the frenzy myself. It is incredibly difficult to remain objective when everyone around you is going crazy.

The decisions that lead to this type of result (and in fact almost all corporate decisions) are made by an executive committee. This is a group of people steeped in the culture of the corporation and the culture of the business segment. They tend to get caught in “group think” because they are all from similar backgrounds, with similar life views and similar experiences. Innovation has a hard time getting in through the cracks.

They gather all their information including projections, facts and figures, risk analyses and more and stir it all together into a pot, discuss it, and make a decision. It all sounds logical, scientific, and rational but in reality it is massively affected by their own experiences, viewpoints, biases, emotional needs and personal pressures. Information which contradicts their worldview is ignored. This is not an indictment of executives. This is common to all humans. Two of the factors at play here are:

• Perceptual blindness.
• Cognitive bias.

Perceptual blindness is the tendency, once we are focused on a task, to ignore other information, even if it is obvious. Here is a great video that illustrates the concept. You’ll be amazed by your own perceptual blindness!

Cognitive bias is our tendency to try to slot new information into the categories and patterns that we are already familiar with. Both of these are great survival adaptations because if we were always paying attention to everything and always re-analyzing and questioning every new piece of information we would never get anything done. By and large past patterns provide fairly reliable predictions of the future.

The problem occurs when there are discontinuities and chaotic disturbances to “business as usual”. Our tendency is to cling onto past patterns and beliefs, hunker down, dig in and attempt to think our way out of it using the same thinking that got us into it.

This group think “blindness” can be mitigated by having an impartial, professionally trained outside facilitator on hand to facilitate decision-making process. It is one of the best ways to break through the patterns, emotions and biases that can create poor decisions. It is the classic situation of a small child pointing out that the emperor has no clothes. Thinking about sustainability requires this new kind of thinking.

Sustainability

Businesses are naturally motivated to pay great attention to the financial aspect of the sustainability equation. After all, if you’re not financially sustainable, you’re not in business. But even in the realm of financial sustainability, which is core to its existence, business has created an unsustainable situation which has led to the current financial calamity. The irony is that this has occurred precisely because of corporate neglect of environmental, social and cultural sustainability. Gutting the environment, communities and cultures in the headlong race for immediate profits has caused an unsustainable rate of growth.

So what’s the solution? The answer lies in a new way of thinking… a new business culture. Integrated Sustainablity. This incorporates sustainability in all of its forms as a core part of business, thereby giving a corporation a solid foundation that will allow it to weather any storm. You may argue that the connection is tenuous, but it is not. In fact, true long term financial sustainability is impossible without the other forms of sustainability. Here are some of the benefits that each of the forms of sustainability provide:

Financial Sustainability

While focused on their own quarterly results, many executives will make decisions that bump the quarterly results at the expense of the business environment in which they are operating. Decisions that have a negative effect on the economy as a whole. Things such as using questionable tax loopholes to squirrel money away overseas or cooking the books so that its makes the company look more valuable.

The first one degrades the revenue the government and thereby degrades the level of services and infrastructure that the government can provide to keep the wheels of the economy greased.

The second one, once it is exposed, decreases investor confidence and forces governments to increase regulation thereby putting a brake on the economy. (Think Sarbanes-Oxley).

Over the long term these things degrade the economy, having a negative effect on my business, even though I had the short-term quarterly gain from my previous decision. But now I can hide my company’s poor performance in the general state of the economy and not be singled out by my shareholders. If all businesses were to make their decisions with an eye towards the health of the economy, they would all benefit from their mutual support of the economy.The recent boom in Western Canada has fueled a massive influx of new residents. Builders have strained to keep up with the demand and prices have skyrocketed. Those directly involved in making money from the boom have experienced a spike in income but this has been counterbalanced by a spike in costs. Those left on the margins have found themselves homeless or struggling to make ends meet.

The cost has been increased crime, gang warfare and other social problems. Because of the demand, corporations have found themselves paying much more for labor than previously. This has thrown off their cost projections. And, of course, now corporations are already doing massive layoffs leaving all these new residents without jobs. Society’s suspicion and animosity towards business will increase, making it even more difficult to operate.

Another aspect of social sustainability is the well-being of the employees themselves. To the extent that a company can provide its employees with meaningful, challenging and highly rewarding work while mitigating the effects of internal politics, capricious managers and the vagaries of the marketplace, the company will have a stable, committed workforce that will pull out all the stops on behalf of the company during times of difficulty.

The benefits of this type of dedication are immeasurable. But we tend not to hear about these kinds of companies because they do not make good news copy. They quietly and steadily post good results for their shareholders while the companies that explode onto the marketplace and quickly burn out get all the press.

Environmental Sustainability.

This one may seem logically obvious, but historically our human population was small enough so that every time we messed up our environment we could move on to greener pastures. The next field, the next valley, the next country, the next continent, the next…planet?? Now we’re stuck at the last stop on the tram, but our human, and, by extension, our corporate thinking has not yet caught up with the current reality. Emotion and momentum trumps logic. A classic case of cognitive bias.

An illustrative case of this is the Weyerhaeuser Corporation, a multinational lumber company. They started in the Appalachian Mountains of eastern United States. By the late 1800′s they had depleted the forest resource and the once mighty stands had been reduced to stump fields. But who could blame them? They were just doing what everyone else was doing. They sought out the next greenfield and found it in the Pacific Northwest of the United States. That ran out too.

Old growth forests form a bank account that has taken hundreds of years develop but can be liquidated in a shockingly short time. Shareholder demands force you to draw down this bank account rather than actually incurring the costs of growing trees. Of course the company, still based in Alabama, has been forced to continue to look further afield for inexpensive timber.

Now they operate in Asia, Australia, Brazil, Canada, Europe and Uruguay, having left behind unemployment, ghost towns, clearcuts and shuttered mills. Presumabley that’s not where their shareholders live. Obviously, at some point, there will be no more green fields left. They may have already reached that point.

Had they adopted a slower growth model for the last 150 years instead of, at the behest of their shareholders, liquidating their resource for maximum yearly profit, they would still be harvesting massive old-growth trees that would now be providing unbelievable profitability and would continue to do so into the future. Over the long term, practicing environmental sustainability would have placed them in an enviable situation and given them a superb bottom line. I would not want to be in the position of any CEO who knows he can make better long-term decisions but is forced to obey the marketplace against his conscience and better judgement.

Now, under societal pressures, corporations are working to appear sustainable. A quick perusal of Weyerhaeuser’s website shows that they are speaking the language of sustainability. Whether this is a response to public scrutiny or a true grasp of the benefits, financial and otherwise, of sustainability is unclear. However, it is truly heartening that sustainability is on the agendas of most corporations and that shareholders themselves are demanding the change.

Cultural sustainability.

A strong, proud, vibrant culture contributes to the well-being of the its people and all forms of business that take place within its influence. Cultures evolve over thousands of years and form their own complex, intricately woven nets of checks, balances, punishments, rewards, stories, histories, legends and beliefs. Unbalancing this by injecting cash, development, technology and other forms of entrepreneurial incursions can cause profound consequences. Short-term thinking says that we can walk in, invest, and shower an area with economic benefits and expect people to step up and adopt our model.

But it’s much more complex than this. This level of change causes profound rips in the cultural web, leaving gaping holes through which all manner of problems can enter. Animosities form between those benefiting from the enterprise and those left in the margins. Ancient rules of authority and distribution of power and loyalty are thrown asunder. People find themselves adrift in a place where ancient tried-and-true rules no longer apply. Mutual support breaks down. A culture crumbles. Now the enterprise that is attempting to work in the area finds itself bearing the costs of social ills that beset its workforce and its regional stakeholders. Alcoholism, absenteeism, sabotage, criminality and a listless workforce all drag on the enterprise’s profitability.

A very small example of this cultural degradation that we are all familiar with is the hollowing out of the downtown cores of medium-sized towns across North America as Wal-Mart and other big box stores settle in the outskirts of town. The downtown core has traditionally been a key part of small-town culture. It takes a population with anextremely strong sense of cultural identity and pride to force the town council to say no to the developers.

Corporations also have internal cultures, but many are not sustainable. In recent years most corporations have broken the “corporate compact” with their employees which basically said that “if you’re loyal to us we’ll be loyal to you”. Today’s employees, especially Gen X and Gen Y, harbor very little loyalty to their employers.

They tend to consider themselves to be “Me Inc.” and, even when in the full-time employment of a corporation, see themselves as free agents. This causes untold and often unaccounted for costs for corporations as hard-won expertise walks out the door to the competition and those that are left only do what is necessary to produce what is required.

A hallmark of a corporate culture that is not sustainable is an inconsistency between responses when employees are asked “what does the corporation stand for”. A corporation with a strong, sustainable culture with which employees identify will have everyone singing off the same song sheet in response to this question. The benefits of having this are as enormous as the risks of not having this. Remember the lone trader in Asia who brought down a major international bank because of his maverick trades? The corporate culture was not strong enough to keep him operating within its bounds.

On the positive side a strong culture elicits dedication, enthusiasm, and brings out the best in those that embrace it while forcing out those that don’t fit so that they can find an organization that better matches their values.

Integrated Sustainability

is predicated on a long-term view of success. The rewards are enormous and are realized through the stepwise implementation of internal cultural change. Starting with the lowest hanging fruit and demonstrating small wins along the way builds the momentum and causes the next ring of people to become involved until finally even the most diehard skeptics are convinced and become the most enthusiastic supporters. (have you noticed, ex-smokers are the most strident anti-smokers).

Some major corporations have already made the journey.

My colleague, Monica Heincke, a sustainability consultant with Jacques Whitford Axys, has made a lifetime study of these topics, including an MBA focusing on sustainability and corporate social responsibility. Her wisdom and input has been essential in creating this article. She has opened my eyes to a whole new way of looking at business. I have realized that our services of facilitation, change management and cultural assessment/change are a key factor in helping organizations move to this level of sustainability and profitability and break away of the tyranny of the quarterly balance sheet.

If you are curious about the possibilities that this paradigm shift offers, we would love to hear from you and help you explore the concepts, costs and benefits of this path. Then, if you decide it makes sense for you, we’d be honoured to assist you along the way by being your facilitators, catalysts, motivators and monitors.

It is a path well worth considering and one in which we’ll support you all the way.

The Hidden Cause of Your Retention Woes

I was recently involved in a large 1-day employee engagement process. After they had all poured their hearts and souls into crafting recommendations and ideas for the company to implement, the CEO stood up and said:

“I am wholly committed to wanting to move this forward!”

Huh?? What does that mean?  So what exactly are you wholly committed to? To wanting? Or to actually move this forward? And what exactly does it mean to “move this forward”?

It’s unlikely that he would speak this way with friends and family. Even if it was extremely important.

So why do we speak like weiners at work?

According to writers Brian Fugere, Chelsea Hardaway and Jon Warshawsky (Why Business People Speak Like Idiots), the root cause is fear. Many businesspeople are afraid to be direct, forthright and to commit themselves to real action. They would much rather hide behind a smoke screen of half-truths, slogans, and “feel good” words than really tackle the problems at hand. After all, if you commit to something, then you might actually have to deliver.

Of course, our hapless presenter didn’t just learn how to speak and behave this way the moment he stepped up to the podium. It took some time soaking in the corporate culture to learn to string these saccharine sentences together. Through his indoctrination, he learned that:

• “Value proposition” means “Reason to buy”.
• “Take it offline” means “let’s talk about this later”.
• “Solution Matrix” is a way of making what’s normally a simple decision sound like it took a great deal of deliberation.  (often accompanied by “key results areas”, “stakeholder focus” and “win-win paradigms”)
• “Initiate project action plan” means “start working”

Some people use 2-dollar words to make a 2-bit point because they think simple language is the sign of a simple mind. “Let’s implement this on a go-forward basis” sounds more intelligent than “Let’s do this” – or so the theory goes. It actually has the opposite effect. Warshawsky says “Intelligent business people who are confident in their messages and passionate about their companies don’t need obscure language to communicate - which is why you never see Jeff Bezos, Amazon’s CEO, blathering in jargon.”

Although many people are great at impromptu corporatespeak, where they really shine is when it comes to prepared presentations and the written word. Powerpoints and annual reports are legendary for this transgression.

I’ve seen it myself. While facilitating a recent strategic planning retreat for a oil rig service company, it became obvious that due to a recent hiring explosion, many newer attendees did not understand how their business worked. We decided that the VP needed to stand up and deliver an impromptu “education session”.

He pulled out a marker, made for the front of the room and started explaining. Graphs and figures popped out of his head as he performed magic on the flipchart. It was unrehearsed, to the point, enthusiastic and full of good information. This turned out to be one of the favourite parts of the retreat.

As a result of this, on a subsequent retreat for another department, the leaders distilled this into a Powerpoint presentation (you can already see where I’m heading with this…) You guessed it… it was a big yawn. People glazed over and nodded off as the Powerpoint slides rolled on. The presentation had been “sanitized” and the humanity driven out of it.

To illustrate how even material intended for an external audience falls victim to this, here’s an example taken from the website of a major corporation.

“[Our] heritage of leadership spans the terms of nine chairmen, generations of employees and decades of business transformation. We have a history of firsts in technological innovations and in management practices that have influenced the way businesses grow and lead. And we are known for a performance culture that consistently delivers results. But these accomplishments alone will not ensure our leadership in the future. Leaders and companies that seek to continue to lead must perform with an unyielding integrity that earns the trust of our stakeholders – integrity in our relations with customers and suppliers; integrity in our disclosure to shareholders and creditors; integrity in our products; integrity in our relationships with our employees; integrity in our compliance with legal and financial rules; and integrity in our interactions with regulators, media and communities.”

OK, you can wake up now…
That little sparkling piece of prose comes to us courtesy of General Electric chairman Jeff Immelt. (or, more likely, his spin doctors in public relations)
If he were speaking at an intimate event of GE Managers, it might have sounded more like this:

“GE’s been around for quite a while and we’ve seen a lot. We’ve come up with a lot of new products and new ways to running a business that other organizations admire and strive for. And we’re known for keeping our promises. But that doesn’t mean we’ll always be on top. If we want to stay at the top, we have to keep on delivering. Recently we’ve seen the failure of several companies with questionable integrity. Our honesty, straight talk and fairness has helped make us industry leaders and this will continue to be the way we operate.”

Now, if you heard that delivered with intense passion and conviction, you’d be a convert wouldn’t you?

Though simple direct communication may feel a touch more risky (call in the appropriateness police!), it ultimately differentiates you from your peers, builds respect and moves you forward.

In the end, it seems it’s all an attempt to prevent our true personalities from bubbling over and, god forbid,“committing a career limiting move that will have us cubicled and then watercoolered about for a months” (doing something stupid that gets us demoted and gossiped about).

So the next time you’re tempted to “interface” with a fellow employee to “frame” a “stretch goal” that “synergizes” with the company’s “vision”, give your head a shake and then say what you actually mean!

Good Luck!

Experienca offers synergistic experiences that optimize stakeholder capabilities and buy-in to facilitate the implementation of your corporate mission.

Translation: We provide training, team building and facilitation for staff, management and executives. You and your team will get more done with less effort, make better decisions, make more money and be happier!

So call us… Let’s “dialogue and synergize a solution matrix”.

Everywhere you look, the heralds of
economic doom are spreading their messages. And, like it or not, it’s affecting your team.

Many of our clients have noticed a recent drop in motivation and commitment amongst their staff and are asking us for our advice on how to maintain momentum and morale. Everyone’s afraid. Afraid of losing their jobs, afraid of not being able to make their payments. Afraid of taking risks. Afraid of making the wrong decisions at work. And when people are afraid, they tend to play defense instead of offense. They retreat to old, familiar ways of thinking and acting at precisely the moment when innovative, creative approaches are critical for your success.

Companies are finding that worrying is consuming a huge portion of their people’s time. And not only that, they’re probably contacting head hunters and scouring job boards, ready to take their expertise to the competition if they seem more secure. Your company may be healthy and may not even have any intention of layoffs, but the fear is in the air and it’s affecting everyone.

So what can you do?

We are advising our clients to follow the examples of enlightened organizations that are seeing this moment of crisis as an opportunity for a quantum leap forward in corporate effectiveness and results.

How are they doing it?

Times of crisis are times of change. That change can be good or bad. It’s up to you.
When times are booming, it’s difficult to make changes because everything is working fine. As they say, “When the wind blows hard enough even the turkeys fly.”

People become complacent and resistant to change. However, when a crisis hits, you can leverage the fear and desperation to “turn your supertanker on a dime” and make dramatic course changes. Crisis reduces resistance to change. Mediocrity is no longer an option and to survive you must unleash your people’s deeper pools of innovation and creativity.

All you need to do is overcome the natural human tendency to retreat to the familiar.

How can YOU do this?

1. Be Honest and Communicate Profusely. Your employees aren’t stupid. If your company’s overhead is too high for your revenue targets, they know it and worry about it. But they won’t talk about it with leadership for fear that their’s might be the job that’s cut. Give them a play-by-play of what’s happening and what your company is doing to thrive through the crisis. Provide them with all the alternatives and the information that you are using to determine which steps to take. The sense that “We’re all in this together, so now what are we going to do to make this work” is an immensely powerful cohesion-builder.

2. Actively Seek and Reward Input. . Once your people have all the information, you’ll be amazed by the depth and breadth of innovative and practical suggestions they will provide. One idea from a front line employee that intimately understands the needs of the marketplace can be the thing that saves your entire company.

3. Give Your People a Sense of Control. One of the greatest sources of anxiety is the feeling that you do not have control over your future. If you need to make budget cuts, let your people decide how to implement them. You might be amazed they are willing to share the pain and even take pay cuts instead of facing layoffs.

Of course, this may be a bit more difficult if your organization’s culture is already a “dog-eat-dog” environment and everyone’s positioning themselves to look good at the expense of their colleagues.

Here is an inspiring article about what the CEO of a major US health care provider did to give his organization a distinct advantage in the midst of crisis. The article itself is inspiring enough, but it’s the comments that are the true revelation. By “opening the books” and asking his people what to do, he not only created a wonderful result, he also got so much publicity that he actually increased his facility’s profile and drew accolades from all corners.