Management vs. leadership?

An often debated and analyzed question is the difference between the role of a manager and a leader.  I would claim that both must include portions of each, and the roles are rather a continuum than a stark division. The leader’s key role is envisioning the future and the manager’s is focusing on executing that vision, but leaders must also be able to execute, and managers to envision. It’s all about shifting emphasis, which can be good news for leadership development.

As managers are more focused on execution, and getting things done through their team members, I insist that the two core skills for a manager are always performance management and employee development. The right way to identify developmental priorities is to do a competency analysis, but I assure you, these two core competencies will be there. Performance management would include skills like goal setting, informal feedback, coaching, corrective dialogues and evaluating performance. Goal setting also means the ability to link the vision and the organizational goals to the day-to-day work of the team members. Employee development encompasses interviewing skills, career dialogues, development planning and coaching. Just having these two fundamentals covered guarantees a solid management base for execution. The other competencies vary based on organization culture and strategic priorities.

Leadership is all about change. Great leaders must be able to envision the future and articulate it with clarity so that the vision is so compelling that they can rally the troops to support the strategic moves that are critical for the organization. To be able to envision the future, they have to be comfortable with a certain level of ambiguity and willing to take calculated risks. The execution piece is still there: They must know how to manage the organization culture and its processes to guarantee that the results are met.

Whether it’s the leader or the manager, they must continuously build their functional, operational and business acumen to earn and maintain their credibility. Complexity increases as they climb the management ladder.

Many companies struggle with their middle management development. This is the twilight zone where both management and leadership skills are required. It is the testing ground on who will make it to the highest levels of leadership. Middle managers must balance both short term execution and long term change leadership priorities, while demands and complexity are increasing for them. They must get very good at the management fundamentals while starting to adapt to the higher level leadership skills.

It’s not a question of management OR leadership, it’s a question of how much of each. Which management and leadership competencies are important in your organization?

###

If you enjoyed this post, please consider subscribing to Forte Consulting RSS Feed. Copyright 2011 Liisa Pursiheimo-Marcks, all rights reserved. SVPGMGDX8TEC

Raise your hand if you hate performance management

Performance management has got such a bad rep among both employees and managers. For employees, the performance review is the annual dooms day, and for managers, it is a month filled with endless bureaucracy. The sad thing is that performance reviews don’t really drive performance. They are necessary for other talent management processes, and should be done well, but any manager who thinks that the annual review is enough to check the box for performance management completed for the year is WRONG.

According to CLC (Corporate Leadership Council) research, the top three performance drivers are risk taking, informal feedback and clear performance standards. Managers who cut some slack for their team members to try out new things will find process improvements and increased productivity. If some of the new ideas don’t work out, they don’t slam the explorers. You need lots of new ideas to find one good idea. At the same time, these managers don’t allow risky and unsafe behaviors.

When it comes to performance management, the most effective way to drive performance is to be clear about expectations and give frequent feedback. No complex computer systems needed! The key is a skilled manager. Employees must know what the expectations are in the form of job descriptions, company behavior standards, and specific goals to accomplish what is important for the company. When the expectations are clear to everyone, employees are more likely to feel that they are treated fairly.

Once the manager has set clear expectations, it is equally important to let the employees know how they are doing against the standards. Most everyone comes to work to do their best. If they are doing their job right, or great, it doesn’t take a lot of effort to let them know that. If they are off track, the manager needs to alert them to the deviation. The earlier the correction is made, the easier it will be. The worst annual reviews take place when the employee hears from the manager that they have not met the expectations but didn’t know about it. Feedback is so simple and it is just about the most powerful weapon to boost your team’s performance.

So why do we even have annual reviews if they don’t really drive performance? CLC research reveals that annual reviews drive retention. It is a chance to discuss career development and how much the employee is appreciated. Annual reviews trigger a chain of events in a company that values its talent. The performance ratings from annual reviews are used to differentiate rewards and development. When the reviews are more forward looking, they become less dreaded and more valuable. Let’s not forget that bulk of performance management happens every day.

If you enjoyed this post, please consider subscribing to Forte Consulting RSS Feed.

Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
SVPGMGDX8TEC

How to get a raise

2009 was a year we want to forget. Adjusted for inflation, total compensation in the USA fell by almost 1.3 percent. 2010 looks a bit better, but not much: a salary increase forecast conducted by The Conference Board projects modest budgets of 2.8%, barely enough to match the inflation rate. In this environment, what can you do to get that coveted raise? There are no silver bullets, but the answer lies in knowing the process, studying the criteria and applying self awareness.

There are different approaches to compensation strategies in organizations, such as flat inflation adjustments, seniority systems, competency based increases, but performance based pay is the king. It makes sense; the best performers get the best compensation. In this year’s case, the performance based companies will take their 2.8% increase budget and try to divide it so that low performers will get nothing, solid performers will get a little bit, so that there is some extra money accumulated to give a more handsome reward for the star performers. It sounds straightforward, but many complain that they are not being evaluated fairly. Herein lies the challenge: 90% of employees feel that their performance is above average. So, how do you know if you REALLY are above average and deserve the key to the treasure chest?

If your company is in a mature stage, it has clearly defined standards for different performance levels. These would describe how a top performer behaves versus a solid performer, and what constitutes performance below expectations. Sometimes, you can dig in further and find the listed company leadership values. If you can’t find any published criteria, here are some generic tips how to distinguish whether you are a true top performer vs. a solid performer:

• Top performers are part of a solution. It’s not that they don’t see problems or are yes-men. When they see a problem, instead of just identifying the issue, they think of possible solutions and volunteer to be involved in implementing them.
• Top performers are proactive. Instead of just doing a good job at fulfilling requests and completing goals, top performers clearly see the overall strategy and purpose of the company, and jump at opportunities to do things beyond their current tasks, as long as they are aligned with the current priorities.
• Top performers are change agents. In new initiatives, top performers not only go to training and follow the new rules, they embrace the change vision and evangelize the cause. If there are issues, they find workarounds instead of just pointing them out.
• Top performers are continuous learners. They ask for feedback and act on it. When they go to training, they are engaged. When they get back to work, they share what they learned with the team and apply the new skills on the job.

Just as a word of caution, here’s a tell-tale sign how to recognize if you might be a low performer: you consume a lot of your supervisor’s or HR’s time. Unless your time with your manager is proposing ideas that you are volunteering to implement, you are taking time away from productivity. The only other exception may be if you are reporting illegal or unethical activities; that is your right.

Get savvy about your company’s performance management and compensation processes. Know the criteria for decisions. Find out about the schedule and decision points. For example, once the merit increases have been approved by senior management, your chances of changing your manager’s decision are slim. Your manager and HR are your best sources of information. Use the processes to your advantage and don’t be afraid of them. Document your performance throughout the year and make sure that your manager, the next level management and HR are aware of your accomplishments. Network internally so that the decision makers can connect a name to a face.

—————————

If you are a manager, don’t let the rewards planning time to go to waste. With the little budget that you have, make it count:

• Make sure there are no surprises. Your performers should know where they stand based on the informal feedback you give throughout the year.
• Be as transparent as you can be about the guidelines and how the compensation decisions are made. Clear expectations upfront set the stage for frank discussions.
• Make sure to celebrate the successes with your top performers and show how much you value them. The reward dialogue with them is a great opportunity to do so.
• Don’t forget to share how much you value your solid performers. Show them what it takes to be a top performer.
• Don’t cop out with your low performers. They should not be surprised with what’s in store for them.
• Don’t forget that compensation can only be a dissatisfier. Leading with purpose, giving feedback and developing your employees ultimately drive their engagement.

###

If you enjoyed this post, please consider subscribing to Forte Consulting RSS Feed.

Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
SVPGMGDX8TEC

How big of a chunk of your company’s talent is underutilized?

The CBS post-Super Bowl show Undercover Boss thrilled or further jaded over 38 million viewers. The Waste Management President and COO Larry O’Donnell spent five days on the ground learning the ropes of the basic operations from the first line employees. Who wouldn’t enjoy watching a corporate big wig scrubbing latrines?

The outcome of the show was that Mr. O’Donnell ordered some changes in the local practices and a task force to look into their productivity policies that seemed to override all other company values. Having worked side by side with five employees, he also ended up promoting three of them. Now, three out of five makes 60%. It took the company President to notice that 60% of the employees he met did not work to their fullest potential.

Waste Management has 45,000 employees. With O’Donnell’s quick sample, 60% of talent being underutilized would make 27,000 missed opportunities. Yikes! Something to talk about with Jay Romans, Senior Vice President, People.

When a company grows past 400-500 employees, the CEO can’t know every employee. The VP of HR can’t know every employee. It is time to put in place talent management mechanisms that ensure that the CEO’s eyes reach all the way to the front lines to recognize and move the right people to the right opportunities.

The selection process should reflect the qualities that make the company culture successful. Sometimes, the culture is not quite there yet, so the management must find the pockets of excellence, and start building the desired culture by replicating the top performers’ attitudes and aptitudes, starting with hiring.

With the talent already in the organization, it is important not to let it go stale. The company loses opportunities, the employees lose motivation. There must be a process in place that frequently checks where the opportunities are, and where opportunities can be created. You also must create visibility into the strengths and talents of your existing employees. How else can you match talent to opportunities? The market provides many options for skill inventory software, or better yet, integrated talent management software.

And even with the fanciest software, keep this age-old rule in mind: garbage in – garbage out. It applies even at Waste Management. If the managers and employees don’t take the talent management process seriously, your software is not worth a byte.

Managers a the key to spotting talent are the managers. If they are only interested in and rewarded for getting today’s tasks done, there will be no talent management. They must have the skills and confidence to have in-depth conversations with their employees about their motivations, strengths and career goals. The company culture must also promote resource development and allocation beyond one’s own turf.

Many employees don’t even realize that they have opportunities beyond their current position. With a supportive company culture and a manager who knows how to develop their skills and coach their careers, they can look beyond the dead-end job, even if the President doesn’t come for a visit.

###

If you enjoyed this post, please consider subscribing to Forte Consulting RSS Feed.

Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
SVPGMGDX8TEC

Crystal clear goal setting

If you haven’t done so already, hurry up and huddle up with your team to clarify this year’s priorities and set goals. Goals give direction. Goals give purpose. Goals improve productivity. Managers are absolutely critical in goal setting. Their role is to create a crystal clear line of sight between the company strategy and the individual team member’s daily work. This not only ensures that company resources are aligned to drive the highest priorities, but it also improves employee engagement.

After the company has announced its top priorities for the year, it is the business units’ and functions’ turn to align their key strategies to make sure that the company goals will be achieved. Once the business unit goals are clear, the department or the team gets together to decide how they can best rally behind the unit goals. The team meeting should include robust debate and discussion on how to best use the existing resources. With the leadership of the team manager, the team will come up with their own goals. The team goals must drive the achievement of the higher level goals.

Now, the team members should see the alignment all the way to the top. They should understand why these particular team goals were selected as the highest priorities. Individual goals are needed to execute the team goals. If the roles in the team are similar, it is possible that all team members set the same goals. If the talents are different, the goals will vary.

Let’s review SMART goal setting: It is Specific, Measureable, Achievable, Relevant and Time-Bound. Specific goals drive performance better than “do your best” goals. If the employee can describe the success, it is more likely to happen. Measurable and Time-Bound refer to your agreement on how and when or how often you will review the goal completion. If you are not prepared to review, don’t make it a goal. To have goals that drive performance and motivate, they must be challenging. Employees find intrinsic motivation in work that has clear and challenging goals, sometimes so much that they can get in the Flow. Goals that are perceived as unrealistic disillusion employees from trying to meet them. Goals will be Relevant, when you use the cascade process to align them.

As a rule of thumb, basic job expectations should not be goals. A goal is a part of a company priority to take it to the next level. Everybody just doing the bare minimum is not going to cut it. To set a goal is raising the bar. When you meet your goal, it’s an accomplishment. Set the goals accordingly. Don’t set them to fail. Set them to be proud.

###

If you enjoyed this post, please consider subscribing to Forte Consulting RSS Feed.

Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
SVPGMGDX8TEC

Kick off a winning year with a balanced scorecard

One of the key drivers for employee engagement is to make sure that your employees have a clear vision of the company’s future. They should see a connection to how their daily work contributes to it. The balanced scorecard is an effective tool that helps management crystallize priorities and then articulate them. Later on, the scorecard is used to track progress towards the common goals.

Drs. Robert Kaplan and David Norton created the balanced scorecard concept as a performance measurement framework to balance a purely finance-driven focus with other equally important performance indicators. These are the key performance perspectives:

• Learning and growth – effective workforce and work systems
• Business processes – operational excellence in work flows
• Customer expectations – measuring what matters to customers
• Financial expectations – measuring what matters to shareholders

One way to look at these performance indicators is that one builds on another. Without a good workforce, your work processes will not be executed to high standards. Without good workforce and high quality processes, you cannot meet customer expectations. Without meeting customer expectations, you will not be financially successful – at least not for the long haul.

The metrics in the balanced scorecard are based on the priorities of the company. Most likely you will start setting your company objectives by focusing on financial and customer expectations. When you select metrics for customer expectations, you really have to be true to your customers. If they care about your lead times, you track your lead times. If their priority is your responsiveness or quality, you must find a way to measure that. Customer satisfaction surveys provide a metric that you can track year over year.

You will meet financial and customer objectives by driving improvements in your workforce and business processes. What are your key initiatives this year? What are your business-as-usual metrics that will tell you the “state of the union”?

Once the objectives and targets are set, it is time to cascade the information down to the organization. Each business unit and each department needs to align their goals to ensure that they are contributing to the same priorities. Their goals will be subsets of the scorecard goals. The employees should see a clear line of sight from their work priorities all the way up to the company strategic priorities.

The scorecard wouldn’t be a scorecard without tracking. You set targets, and you frequently track progress to goals. The easiest way to communicate the status is to use the stoplight chart. Green means on target, yellow means limited deviation from it (often  max. 10% off), and red means too much deviation from the target. It is easy for the management and for the employees to spot where everything is going well and where problem solving is necessary.

The balanced scorecard process ensures that the strategy process does not become a once-a-year event. Instead, it will be a constant reminder of the company priorities and progress towards the common goals.

###

If you enjoyed this post, please consider subscribing to Forte Consulting RSS Feed.

Copyright 2010 Liisa Pursiheimo-Marcks, all rights reserved.
SVPGMGDX8TEC