Employee Recognition: Keep It Simple

Recognition is among the purest, most effective ways of communicating with employees. Recognizing people is also one of the best ways to reinforce the behaviors that support a business’ purpose, vision and strategy.

Why, then, do so many companies and managers do such a poor job of it? A lot of bosses don’t even say “thank you” when an employee puts in an extra effort. Some act as if to say: “So what? It’s their job, isn’t it?”

The subject of employee recognition is top of mind lately because I’ve been following an intriguing on-line discussion the past few weeks on Linked In, at its Employee Communication and Engagement section. There have been a lot of predictable answers to the question about how best to recognize and reward employees, involving both narrowly focused and complicated methods, as well as tired, conventional actions.

I’m pleased to note, however, that the recurring theme of the discussion is that the simple “thank you” and acknowledgment go far – especially when received from the CEO and other senior executives. Recognition needn’t involve rewards or money, nor must it be overly complicated.

Here’s an entry in the discussion I liked. “[Saying] ‘thank you’ for a job well done goes a long way… I hear stories in focus groups about how good people felt when a boss, manager, [or the] CEO popped by and said thanks; how [it made their day when] the senior manager took a few minutes to say ‘hello’ (and perhaps ‘thank you’); [or, conversely] how bad and deflated others [felt] when they poured their energies into something, only to feel ignored and inconsequential; how senior managers visiting a site/department whisked in and out without a word to employees, [making] them feel like they didn't count.”

Toward improving the internal climate, one person cut to the core meaning of thanking people, noting, “Simple courtesy and respect. Two simple things that most of us were taught at an early age, and if we were not fortunate enough to have received this in our youth, at least most know how good it makes you feel to be treated with courtesy and respect.”

At base, it is the CEO and his/her senior staff that determine the strategy and direction of the organization. So when individual contributors and/or teams are doing the good work that drives the organization towards those ends, the top people would be wise to set the standard and acknowledge it by saying “thanks.”

A number of discussion participants wrote about using internal communications vehicles to spotlight people’s good work. One typical comment was, “If you have a corporate newsletter or an Intranet site filled with articles about what's happening in your organization, well-written, compelling stories that highlight individual achievement can be your cheapest and most effective way to recognize deserving employees and teams.”

That’s fine, provided the primary (and first) acknowledgment comes directly from the person’s manager or a more senior person in the organization.

The following story, posted in the on-line discussion, was so poignant that I include it here in its entirety. The contributor had excerpted it from a longer article on the subject from Entrepreneur.com. It speaks for itself…


”Some years back, a custodial employee working for one of my clients came up with an ingenious way to eliminate a slip hazard for customers on wet or snowy days. A story about it, with a photo of the employee, was featured in the company newsletter. This company routinely mailed copies of its newsletter to the children of any employees highlighted within its pages, with a personalized note that read, ‘Your daddy's picture appears on page 2.’

“Several weeks later, management held a staff meeting and invited questions about their quality improvement program. The custodian rose to his feet and reported that the day his two children received the newsletter, he'd been greeted with a hero's welcome when he got home. His youngsters wanted to hear how his picture came to be in ‘the paper.’ The kids had subsequently brought the newsletter to school for show-and-tell, and the teacher posted it on the school bulletin board for a week. His kids felt like celebrities at school, he said, as if their dad had been on the cover of Time magazine. He went on to acknowledge that he'd always assumed they were somewhat ashamed of the janitorial work their father did for a living. This expression of pride from his own children, he said, was the most personally rewarding experience in his entire 30-year career with the company – and if this was the kind of thing management meant by ‘quality improvement,’ he wanted them to know he was ready to do anything he could to help. With that, he sat back down. Things were strangely quiet in the meeting room for a few moments after his remarks.”

Recognition, even when it seems simple, can be powerful stuff.

The Value of Empathy

Empathy, “the capacity to recognize or understand another's state of mind or emotion,” is a powerful competitive advantage within a business organization.

Truly empathetic managers are often the best, most effective managers because they have a better, clearer understanding of how their employees operate and what motivates them, and so are better able to lead a cohesive team focused on a common purpose.

The surest path to empathy is the personal, first-hand experience. Many of the best managers, those with profound empathy, are those who worked their way up in their organization – which is why the wisest company founders/owners don’t merely pass on the mantle of leadership to their children but make them earn it.

I witnessed this first hand a number of years ago at a client company. Founded in the early-1960s, the specialty-manufacturing firm grew and thrived on the genius and drive of its founder, who had left a promising career at a global industrial company with nothing more than his ideas for a better company around a core product line and how best to produce it and deliver it to a target customer base.

As a youngster, his son Ollie often hung out with him on weekends, walking the factory floor, listening in as his dad talked shop with his employees.

In high school, Ollie swept floors and did general janitorial work as his summer job. Over the years, through college and post-graduate business school, he always worked part-time during the summer months in the plant doing the dirtiest jobs. It was what his father wanted. Upon graduation, his dad put him through the paces and by the time he reached his late-30s, Ollie had worked in every department, including billing, field sales, manufacturing and customer service.

By the time I got to know him, Ollie was head of marketing, a capable marketer with a keen understanding of his company’s product lines, its markets and, especially, its customers and their world.

Ollie eventually became president while his father moved into an advisory role as chairman. The company continues to thrive, and I know one of the biggest reasons for its success is the fact that its president knows his company intimately, from every perspective.

Most important, though, he knows the people who make it work. He knows from hands-on experience and first-hand observation what it takes to do each job. He knows the dedication, intelligence and perseverance of the many employees that are the foundation of the company’s success.

So it would stand to reason that a company that hires an outside manager or CEO with little or no first-hand knowledge of the company’s inner workings and its people is asking for trouble. And the truth is, statistics show that outside CEOs and senior managers have a less than positive track record. So consider how one company approaches that dilemma when they have no choice but to hire an outsider.

A friend and colleague told me the personal story told to him by the general manager of one of the premiere hotels at Walt Disney World in Orlando.

This eminently qualified gentleman had been hired by Disney to run its newest, plushest hotel. He had come from a major hotel chain where he had gained a number of years’ experience running several of its properties around the world.

He reported for his first day on the job impeccably dressed in suit and tie, but soon learned he had over-dressed. Handed a workman’s jumpsuit, he was told that his next six months would be spent learning how the hotel really operates – from the ground-up, starting with maintenance.

It was an eye-opening experience as he rotated between behind-the-scenes jobs. He unclogged toilets and fixed balky air conditioning systems. He cleaned guest rooms and changed bed linen, bussed tables in the restaurants, toted room service trays, served drinks at the bar, hauled garbage, cleaned the swimming pools, and worked the front desk and the reservations line.

In all his years in the hospitality business, he said, he had never fully appreciated how hard so many people worked to make the guests’ stays pleasant and enjoyable experiences. Imagine what he learned about his employees’ workaday lives and how he carried that empathy back with him when he returned to his suit-and-tie uniform in his role as hotel general manager. Imagine the unique insights he gained into the inner workings of the marvelously complicated machine that such a hotel really is.

The Walt Disney Company is a unique organization, focused on innovative engagement at all levels. Every employee, no matter the operation, no matter the job, is referred to as a “cast member.” A concerted effort is made to maintain a positive work environment, which in turn leads to engaged employees who feel motivated, inspired and committed. Workers at all levels have the ability and control to deliver on the Disney mission statement: “To make people happy.”

The company’s namesake and founder, Walter E. Disney, said it best: “Our heritage and ideals, our code and standards – the things we live by and teach our children – are preserved or diminished by how freely we exchange ideas and feelings.”

That’s a pretty good definition of empathy, too. Don’t you think?

Postscript: In response to this blog post, a good friend sent me the following link, a story from the May 21 (Portland) Oregonian about a CEO who, upon being hired to lead family-owned Platt Electric, spent six months in the field learning first-hand how the company operated. Employees thought he was a temporary worker. He never said anything to the contrary. Upon taking charge, he managed it through a tough housing and real estate market without any lay-offs or pay cuts. And now, he's growing the company in the face of a weak economy, stealing market share from larger competitors.

I considered excerpting it for another blog entry, but realized I couldn't improve on it. Besides, I'd have to truncate it and necessarily lose the heart and soul of the story. It's pretty inspiring stuff. Enjoy...

Exec helps re-energize Platt Electric

Getting Out in the Field

One of the surest paths to management excellence is not through MBAs, books and seminars but through personal, first-hand experience – getting out in the field and seeing with one’s own eyes how things really happen.

An earlier blog entry here concerned the CBS television show “Undercover Boss,” which, if you’re unfamiliar with it, is a “reality TV” show where the CEO of a company goes out in disguise and works on the front lines to learn more about his/her company.

In that blog, I wrote: “I’d like to think that this show will encourage other bosses to do the same. It's always going to be a great learning experience – for both sides of the equation. The benefits that senior executives derive from getting out on the front lines with their employees are immeasurable.”

Apparently my wish has been granted. In at least one instance, the show has inspired a company’s senior management to get out their offices and see for themselves what goes on out there. In a May 20, 2010 article, the Boston Globe spotlights DHL, the international package delivery firm, and how its senior executives borrowed CBS’ idea. They came to Boston for a week to work alongside their local employees, though not incognito like the TV show.

Ian Clough, CEO for U.S. operations, was joined by several of his senior managers for the first-hand look. Clough and the others each rode shotgun in a delivery van all day one day, going on the daily rounds with their drivers. It was a terrific learning experience, the CEO reported.

As the Globe notes, “Clough developed the program as a way to better assess how policies enacted at upper levels of the company affect the firm’s front-line workers.”

Bravo!

As Clough explained, “The idea is if the CIO or the CFO is evaluating an investment proposal for new equipment for our couriers, and he’s sitting in his nice warm office, he’ll have firsthand experience of knowing what it’s like to be out on a truck in a wet and windy place like Boston.

(If they were looking for "a wet and windy" experience, I'm not sure Boston in mid-May is the best choice. But if they were out and about on the trucks yesterday, they got lucky. It was, indeed, wet and windy.)

Christine Nashick, marketing vice president, characterized the exercise as a “back-to-basics approach.”

Clough introduced himself to customers at each stop and asked probing questions about their preferences in delivery services and their attitude toward DHL. People were honest and Clough was grateful. He learned a lot, he said, and not all of it was good news.

He and his team were there to observe, not to get their hands dirty like the CEOs in “Undercover Boss.” Drivers were selected at random, and paired with the executives.

The van on which Clough rode was one of the company’s new hybrid trucks. Clough was interested to learn from the driver how well it performed. He was pleased to get a first-hand report from the driver, though not entirely happy to learn that the hybrids’ performance left a lot to be desired.

The story mentioned that the senior executives were scheduled to go out on sales calls as well, for better insights into the customers’ world, their needs, and how DHL can better support them.

I’m always heartened to learn of such out-reach activities on the part of senior executives. This kind of experience never fails to open one’s eyes. It’s one thing to sit in the executive suite and make decisions. It’s still another to do so after having been exposed to the field where those decisions most affect people and operations.

What the Globe story doesn’t mention is the importance of the personal connections the executives make with their front-line workers. It will undoubtedly leave a deep, valuable impression.

It will give them otherwise unattainable insights into the working environment of their employees: their daily challenges, pleasures, frustrations and opportunities. Decisions and discussions around capital expenditures are one thing – whether to buy new hybrid deliver vans, for instance. But now they have a better feel for the impact those decisions will have on people, perhaps the most critical aspect of any decision.

And they will have a newfound and profound perspective on how their company operates, from the bottom-up rather than from the top-down. They will have a better sense of the impact, not only of their decisions but also of their messages and their communications.

No doubt Clough was surprised at least a few times to learn that initiatives or executive communiqués failed to reach or failed to impress the people on the ground. Let us hope, if he did get that insight, that he will rethink his messages and how he communicates them in the future.

If that were all he got out of the exercise, then it was worth the week’s investment of the executives’ time. Everything else was a bonus.

Up In The Air

You never know what you have until you lose it, especially your job. Perhaps that’s the underlying message of a film I recently saw.

“Up In The Air,” starring George Clooney, is a well-crafted, thought-provoking story of a man whose profession it is to be the bearer of bad news, delivering those bland words that carry such weight and meaning to the recipient: “We’re going to have to let you go.”

Spoiler Alert: If you haven't seen this film and intend to, you may not want to keep reading.
 
Ryan Bingham (Clooney) is the hired gun that casually goes about his business as the star executioner from “CTC” (Career Transition Counseling), always in transit to the site of the next lay-offs.

Having borne the task myself of letting people go, I can attest to its unpleasantness. It’s understandable, then, that a company might want to hire an outside firm to do its dirty work. I cannot say whether such firms actually exist. And I’m not sure where you would go to find such a service. But for the sake of the story line, let’s assume they’re out there, thriving in today’s environment of 9.9 percent unemployment.

Indeed, Craig Gregory, president of the fictitious CTC is excited. “The economic downturn has created a wonderful opportunity for the firm,” he announces at a staff meeting.

The film offers unsurprising glimpses into the pain and loss that people feel when their livelihoods are taken from them. Their experiences are made much worse because they happen in face-to-face meetings with this hard-hearted man who isn’t their boss, who they’d never laid eyes on before, and will likely never see again.

It’s only later that we come to realize that Bingham in fact has a humane side; that he truly does understand and empathize with his victims, even if his prepared patter betrays a hard-shelled, unfeeling approach to his job. His new partner, Natalie, a self-assured young college graduate, doesn’t sense his empathy through his apparently canned spiel.

It’s only later when an employee is laid off and threatens suicide that the young assistant is taken off her stride. And when they learn the suicide threat has been acted on, she quits, unable to bear the real life pain that her work has come to represent.

Bingham, too, is affected by the suicide, but more so by his gradual realization of the larger picture of his chosen field. The film’s title has both literal and figurative meanings. The newly unemployed find themselves up in the air, untethered to the reality of the jobs that had defined their lives.

Also, “up in the air” quite literally describes Bingham’s life of being always on the road, living in the fast lane, flying between assignments, racking up frequent flyer miles toward his nirvana of 10 million miles. Bingham blandly observes, “Last year I spent 322 days on the road, which meant I spent 43 miserable days at home” in Omaha.

It’s toward the end that we begin to understand that the haughty, self-confident central character is himself very much up in the air about everything: his life, his career, his estranged family, and his torrid, cynical affair with Alex, another road warrior.

Bingham comes to see the hollowness of his quest for the supreme 10 million mile club when he finally achieves it. He knows it’s a metaphor for his life. As they celebrate mid-flight, the pilot asks where he’s from. “Here,” he sadly replies, nodding to the airplane.

In the course of the story, we also get a realistic look at the normal human reactions to the news of losing one’s job. Tears, anger, disbelief, and argumentativeness: It’s all there. As Bingham says, “We’re here to make limbo tolerable.”

This is an allegorical tale of the conflict between the romantic fantasy of air travel and fancy hotels, versus the reality of delays and lost luggage, set in parallel to the conflict between the ideal of a fulfilling career and the very real possibility of job loss.

Bingham’s words seek to console the jobless clients, to assure them that this might be the break they were looking for, that they were stuck in a rut. He tells one older man unconvincingly that it might be his chance to become a chef, to fulfill that dream he once had.

In the end, it’s a depressing tale, especially in the context of today’s uncertainties around employment and job securities. People today are happy to be able to take home a paycheck. Few can afford to bemoan their philosophical misgivings at the stress and drudgery.

Many fantasize about what they’d rather be doing. We look enviously on those who had the youthful forethought, wisdom, courage and drive to aim for and stick to a long-term career goal. They are the ones now comfortably ensconced in early retirement – no doubt traveling at leisure on the same planes as the road warriors like Bingham that continue their Sisyphean haunting of the skies.

Landlubbers and the Smell of Land

If you’ve ever lived in or near, or spent time in a coastal community, you know the odors that emanate from the estuaries and tidal marshes, especially at low tide. Familiar though not altogether pleasant, the distinctive odors are emitted by the various creatures and microscopic life forms that inhabit such places through their life stages – living, dying, dead and decaying.

We typically associate that agglomeration of odors with all things related to being at the seaside. We think of it as “the smell of the sea.” But that’s just because of our point of view.

To a sea-going fisherman or sailor, someone who spends most of his days on the ocean, that same odor is “the smell of land.” As he sets sail and heads out to sea that odor fades away and the predominant sense is the clean salt air. In the same way, as we head inland away from the seashore, the aroma dies away and the smells of plants, flowers and life on land predominate.

At the point where the seaside aromas prevail, landlubbers and men of the sea share a common sensual experience. It’s the same odors, smelling the same to both, yet perceived and interpreted in opposite terms.

It’s all a matter of perspective and what one is most familiar with.

The same is true with life, including life within a business organization. People come to various challenges and opportunities with a set of biases that spring quite naturally from the environment in which they operate every day and the experiences they have there.

A typical company’s various functions present a case in point. Gather managers from different operations in a room to deal with a particular challenge and you’re likely to get perceptions that reflect their areas of expertise and focus.

The finance guy sees the challenge through a fiscal lens. The sales manager comes at it with the bias of the customer. The human resources manager sees the internal people implications. The supply chain manager infers the impact on parts inventory and pricing. And so on.

In the same way, people at different levels of the organization or geographic locations have similarly divergent perceptions of challenges and opportunities. It’s not at all unusual for headquarters-based people to see things considerably different from people in the field, at remote locations, facilities or factories.

Being on the ground dealing directly with customers is an entirely different experience than inhabiting the upper floors of the company’s head office. On the one hand, the person is confronting the real world impact of the company’s products and policies, while the other is operating largely within a theoretical construct. At the same time, however, the person at the headquarters office may see the nuances of challenges and opportunities that the front line guy misses because he’s too close to it.

Both smell the same odors, yet it’s land to one and sea to the other.

Both perceptions are right and both imply realities and insights that, together, add value to the corporation’s pursuit of its mission. Problems arise when that distinction is not understood by one another, not taken into account and not fully appreciated.

Breaking down the walls of perception to see through another’s eyes is key to the organization’s ability to fulfill its mission, to achieve collective superiority, as it should.

Instead of a pointless argument over what amounts to a semantic difference, it’s better to know and appreciate that your landlubber friend smells the same thing as you, even though he expresses it differently. It’s the first step in the process toward achieving collective excellence.

Lessons from Summers Long Ago

Lessons that are meaningful and useful in our work can come from anywhere, sometimes even our own youth. I learned an important one about the value of a strong work ethic during my college years.

My summers at that time were filled with labor-intensive jobs. Often, it entailed working alongside other young men that, without the opportunity of college, would likely do pretty much the same kind of work for the rest of their lives.

Two summers, I worked for the California Division of Forestry (CDF), fighting fires in the Sierra foothills of Calaveras County. Among the local men, there was an initial arms’ length attitude towards me and two other coworkers who, come Labor Day, would leave for college, a world they knew nothing of.

Sometimes, they didn’t use our names, addressing us as: “College Boy.” It was not a term of endearment. Nevertheless, we came to respect one another over time through our shared experience of fighting wild fires.

In many ways, those hard-working fellows were way ahead of us. Coming from local blue collar families, they understood from an early age the importance of hard work and the central role it played in one’s life, helping assure independence and the ability to support a family. I was just a self-involved College Boy, with no real responsibilities.

Ken McCrank was typical. Married and already a father, Ken was just a couple years older than I. He had previously worked at the only major employer in the area, a cement factory. Ken was relieved to put that dreadfully dirty and hazardous job behind him, happy to call himself a State of California employee with all its job security and benefits.

I came to respect him for his solid work ethic and, in hindsight, for the life lesson his attitude gave me.

At the CDF, when not fighting fires – which could be dirty, exhausting, very hot, and sometimes-dangerous work – we were nevertheless working hard. We did what the captain told us to do: paint buildings, wash and wax fire trucks, or cut firebreaks in anticipation of wild fires.

On one 100-degree day, Ken and I were assigned to dig a ditch. Not eager to labor in the hot sun, I set about scheming to get out of the task. Ken laughed at me. “If you’d spend as much time working as you do trying to figure out how not to work, you’d get a lot more done and be finished a lot sooner,” he said, as he grabbed the shovel to start the ditch.

There was no arguing his point. I deserved the good-natured ribbing.

Ken and others like him with whom I worked those many summers ago gave me a deeper understanding of and appreciation for the work ethic that they brought to the job.

In my work today, helping companies communicate effectively with their employees – including hourly workers who are often a lot like Ken – memories of those college summers sometimes come back to me. Ken’s sweaty, grinning face is etched in my memory as I consider how best to engage the front line workers in the company’s larger mission.

Too often, managers view their workers in the abstract and not as fellow human beings also striving to contribute value to a cause larger than their own. I’ve seen situations where such employees sense managers’ aloofness and respond appropriately by disconnecting. The job becomes just a paycheck. There is no emotional connection and no investment on their part.

That’s a lost opportunity for the company. When people are proud of their work and their employer, engaged in the business, and desiring a mutual commitment from their managers, the value is beyond measure.

It pained me when I once heard a paper mill worker say, “I check my brain at the door” because no one cared what he thought, what he had learned on the job, or how he might contribute to improving the operation. What he was really saying was that he was not committed to the organization because the message he got from his company was that his commitment to the job wasn’t desired.

That likely was not the intent. But it was the end result of a manager who didn’t listen, who failed to connect with his people, in turn failing to recognize the inherent value that the front line workers brought to the operation.

Ken McCrank taught me long ago that everyone in the organization can and should be a valuable contributor. And shame on the manager who fails in his/her responsibility to connect with them, to engage them in the business, and to build commitment to a common purpose.

Rethinking Our Self-Perception

How we think and talk about ourselves truly defines what we are.

If, for instance, you see your business as that of a widget manufacturer, then it's likely that's how you present your company and, by extension, how your customers perceive you. That may seem obvious, but that kind of perception can also hem you in. And it might mean that you miss opportunities that you are capable of tackling.

Step back and think of what it is that you're truly selling your customers. Sure, you manufacture widgets for sale to a discrete target audience. In fact, you are helping them solve their unique challenges. Maybe your most valuable skills lie in your understanding of a customer's challenge and how a particular widget you make might solve that for them. So that makes you a solutions-based company.

The value you bring your customers goes beyond merely filling orders with the widgets you make; it's making their lives simpler by solving their problems. Allow customers to see you in that light - rather than simply as a maker of the products they buy from you - and a whole new world of opportunity opens up.

This is not a new idea. It's what countless companies have done, most notably, IBM, which more than 15 years shifted its focus from a maker of computer hardware to a service-oriented consulting firm.

It all starts with your own self-perception.

Think about Ford Motor Company for a moment. One of America's oldest companies, Ford makes cars and trucks, right? Think again. Sure, their factories crank out products that enable us to haul people and goods from Point A to Point B. But the people at Ford have a new understanding of and appreciation for what they do and what they are.

They've started thinking of themselves as a software company, according executive vice president and president for Americas, Mark Fields.

Huh? What happened to the "motor heads" that shaped and defined Detroit the past 100-plus years? What about the steel and rubber that built that industry?

In the kind of insightful article for which the magazine is known, Fast Company reveals the new Ford that is being created around the notion of keeping drivers in touch via 21st century technology: Bluetooth, smart phones, MP3 players, GPS, etc.

Ford is doing it with its own "Sync" on-board Bluetooth platform built on Microsoft's Windows CE operating system that allows a driver - without taking his/her hands off the steering wheel - to use voice commands to make phone calls, select radio stations, or choose music (by genre, artist, or song title).

And that's just the beginning. Soon, Ford owners will be able to navigate to their destination, locate a nearby McDonald's restaurant or Exxon service station, get a local weather forecast, and more, all with voice commands as they speed down the Interstate. Your Ford's Sync system is designed to learn your voice, your unique phrasing, your musical tastes, and begin to anticipate your commands.

Initially, Ford was hoping merely to create an on-board communications system that would compete with GM's hugely successful OnStar. In fact, they've leapfrogged their cross-town rival. But it didn't really happen until they thought of themselves as more than a carmaker. And then their thinking expanded beyond the cubical confines of a typical passenger car.

Unlike GM's static OnStar system, Ford's Sync platform is designed to evolve symbiotically with the handheld devices owners carry with them in their Ford vehicles, as well as how their use of those devices evolves.

As the Fast Company article notes, this is a huge marketing advantage for Ford: "The great thing for Ford, of course, is that the more Ford improves a customer's favorite handheld device, the more likely it is that people will want to carry their handheld devices into a Ford."

Ford CEO Alan Mulally cleverly links these new doings with the founder's vision. "We're committed to this thing," he said. "Look, this is part of Henry's [Ford] vision. 'Opening the highways to all mankind.' I think this is the way to do it."

It boggles the imagination to think that a car company could expand its thinking from between the shoulders of a paved road to the limitless frontiers of computer software and the Internet.

Frankly, in these times of profound change, companies that don't likewise rethink what they are and what they do will soon be left in the dust as their competitors evolve with the changing world and speed ahead into the future.

Think what's possible if you similarly rethink what you do.

Loyalty Lost

Walt, an old college friend, had worked for the same Oregon-based company since our graduation. The 85-year-old family-owned manufacturer had always treated its employees well. Walt worked his way up through the ranks on merit, dedication, and hard work.

Four years ago, he was promoted to be among the company's top four executives, reporting to the CEO, who admired his loyalty and knack for keeping key customers happy. But soon, everything would change.

A year later, a German-based company, a competitor in the European market, made an offer to the family owners that proved irresistible. The grandchildren of the late founder would become fabulously wealthy overnight. The third generation had never been directly involved in the business, so their decision to sell was easy.

When I talked to Walt after he'd visited the German headquarters of the new owners, he was encouraged. He thought there might be opportunities for further promotion within the parent organization. There had been a lot of talk about reinvesting in the business, taking it to a new level of excellence, he said.

That was then. Now, three years later, Walt is leaving for a comparable job with a competitor – something he had never before contemplated. In fact, he thought he would retire from his former employer. What changed?

Six months after the acquisition, the CEO who had overseen phenomenal growth the past 20 years was let go. The new owners sent in their own man – a German national – to run the North American operation. That's when everything started changing – for the worst, according to Walt.

The firm’s largest customer was headquartered in the Southeast. Walt had developed strong relationships with the key people there over the years, traveling cross-country frequently to meet them, as well as visiting their several manufacturing plants around the country. Like most of the firm's customers, Walt serviced this client well, solving its problems quickly through his close attention to details and first-hand awareness of how they used his company’s products. He knew how critical quality and on-time delivery were to this customer.

The changes at Walt’s company came slowly at first. Walt had previously been given a lot of leeway in how he operated, how he took care of the company's most important customers. Now, all his big and little decisions were being second-guessed by the new CEO. What had once been fun was now tedious and unnecessarily complicated.

His expense reports were being questioned as never before. His frequent travels to meet with clients were cut back in the interests of saving money. Cost cutting also negatively affected product quality and order fulfillment. Walt started getting a lot more complaints from his key customers. Parts did not meet spec. On-time delivery requirements were not being met. Soon, his best customers were bringing in second supply sources. Since his travel allowance had been cut, he was unable to visit to address customer concerns.

So when his firm’s top competitor came knocking, Walt was receptive. They made him a generous offer and he accepted. He will join them next month with comparable responsibilities, along with better remuneration, perks and incentives.

When people like Walt leave their long-time employers, the moves are indicative of significant internal change that their key people cannot tolerate. Talented contributors stay committed to their companies when they are given reason to be loyal, not only in how they are rewarded but also in the support they get in their respective jobs and the pride their companies instill in them.

Take that away and you take away the reason for their loyalty and commitment. It becomes just another job, interchangeable with any other job with a comparable paycheck.

Organizations must establish and then keep their eye on their own North Star to carry them and their people through times of challenge and difficult change, whether it’s an acquisition, management shake-up, or brutal market forces.

In the case of Walt’s company, its North Star was its unrelenting dedication to meeting customers’ needs by delivering top-notch quality and responsive service. When the new owners took over, though they likely never would have said so openly, their North Star was profitability through cost cutting. It was their actions – not their words – that demonstrated their true North Star.

We’ve seen it elsewhere, where an acquired company known for its entrepreneurial spirit became consumed and overwhelmed by its new parent’s obsession with process and procedure. The entrepreneurs in the acquired company were out the door within a year.

Acquiring companies may and often do speak to the concerns of their new employees coming to them through the acquisition. “Oh yes,” they may say, “we believe in an entrepreneurial approach to business, just like you.” But when actions contradict the words, the truth is out.

Walt was similarly excited about the words he heard from his company’s new owner, words about re-investing in the business to make it better at what it already did so well. But the ultimate actions of cost cutting bore out the truth. And the true nature of its future direction is not something he chose to be associated with.

The iPad and the Wall Street Journal

As both a print and on-line subscriber to The Wall Street Journal, I am occasionally asked to participate in their on-line surveys. Often, these are done for the benefit of advertisers, to get a read on how well their messages are getting through.

Other times, the surveys are about the Journal itself – the kinds of stories I like, what needs to get more coverage (or less), and other issues along those lines. But a recent survey piqued my interest and, in my mind, showed how on-the-ball the people at the Journal are.

The Wall Street Journal is available in three different media: conventional newsprint, the WSJ.com web site, and the fairly new WSJ iPhone app. If you’re not familiar with the latter, it’s a nifty little app that includes breaking news (of all kinds, not just business news), stock market quotes, video, and even WSJ radio. It can be customized to suit the whims of the user.

The survey I completed asked a series of questions about how I use their web site vs. their print edition vs. the iPhone app. How does their iPhone app compare to other news apps, including The New York Times, FOX News, and AP's "Mobile News?" What is better about one or the other? Etc. Do I ever click on advertisers' banners?

Then they wanted to know whether I was planning on buying an Apple iPad within the next six months. I’m undecided on that question, but because I was curious why they were asking, I checked the “yes” box.

Therein ensued several specific questions about how I expected to use the iPad: whether to read books, magazines and newspapers; play games; watch movies; send and receive email, etc.

Would I welcome a special iPad WSJ application? (Yes.) Would I be willing to pay extra for it? (No, I wouldn’t.) Would banner ads be okay? (Sure. Why not.) And how would I prefer the app to be formatted: like the iPhone app or like the print edition? (Print.)

The survey was striking because it shows how Dow-Jones is continuing to stay ahead of the technology curve. Remember, they were the first major player with a subscription-only web site, and they're one of the few (if not the only) media companies actually making money on web site subscriptions.

(One of their chief competitors, the New York Times, has long been struggling with “monetizing” its web site – an effort that has been marked with fits and starts the past few years. For a time, the Times tried to charge for access to certain columnists. That failed and the experiment ended. They recently announced that, commencing next year, access would be strictly by paid subscription. I’ll believe it when I see it.)

At heart, the poll about the iPad once again demonstrates why the Wall Street Journal and Dow-Jones are about the only successful news media company today. While other newspapers lose subscribers and advertisers, and grand old names in the business fall by the wayside, the Journal continues to add subscribers and grow. It’s understandable why News Corp. was willing to pay a premium for Dow-Jones.

Here is a product – the iPad – that won’t even be available for another month and the Journal is trying to figure out how best to maximize the new medium's potential. Everyone fully expects that the iPad will succeed, just as the iPod, iTunes, and the iPhone have.

Businesses like Dow-Jones would be wise to hitch a ride on that anticipated success. I look forward to seeing which other businesses are as wise as Dow-Jones.

Bringing the Inside In

One truth I’ve learned in my years in employee communications – a truth often cited here – is the value of bringing the outside in. For a business to succeed and thrive, its people must remain ever aware of how external influences impact their organization, both directly and indirectly.

Of particular importance are the shifting paradigms that can mean new competition, changing consumer tastes and unexpected economic forces that result in new demands on employees and their companies. It might also include competitors’ actions (new products, etc.), the state of the economy (a persistent recession), and regulatory changes and new taxes that can complicate business.

While that’s of central importance, equally critical is a group's ability to bring in other functions within the company itself, to cross-fertilize internally as well.

People in one function need to have an on-going awareness of what other functions are doing, particularly as they may impact their own area. At the same time, their own unit’s operation ought to be better understood across the business.

For instance, do people in marketing really understand the challenges faced by R&D, or manufacturing? And vice-versa? Do the people in R&D have a keen sense of customers’ desires and the kinds of features they may be expecting in the next product iteration? Is the product development operation conscious of the fiscal constraints that an ailing economy is placing on the company?

Does finance have an appreciation of why product promotion might cost as much as it does, or why procurement costs are rising? Does finance understand why the human resources department needs an increase in its recruitment budget during an economic recession?

No doubt the senior managers in those functional areas know, but what about the people within their units? Is everyone operating in a vacuum?

I'm reminded of this old Dilbert cartoon:

Communications professionals play a central role in helping create and open up the avenues between functions to assure that people understand what's going on in other parts of the organization; that they fully grasp the evolving internal dynamic and how what they do and the decisions they make may impact what goes on in other parts of the company.

In some quarters, this is referred to as “breaking down the silos” that exist in every organization. But it’s more than eliminating the silos. It’s reaching out across those natural divides, and not just at senior management retreats where the functional VPs share ideas, insights, challenges, and opportunities.

It must be a robust, ongoing dialogue at all levels. It needn’t be time-consuming. Maybe it’s no more than managers establishing the links and encouraging dialogue. Maybe it’s an occasional spur-of-the-moment lunch between a half-dozen people from different departments, just to shoot the breeze. It’s amazing what those informal, friendly conversations can open up, the kinds of ideas they stimulate.

When functions operate independently, it can only spell trouble. In September 2004, Oprah Winfrey gave away 276 Pontiac G6s to members of her audience. Pontiac scored quite a PR coup. But it was a short-lived coup. When intrigued Oprah fans went to their local Pontiac dealers hoping to test drive or buy a G6, they were disappointed. None were available, nor would they be for several months. What might have been a huge sales surge for Pontiac fell flat on its face.

Apparently, GM’s promotional gurus didn't coordinate their planning with manufacturing. Production of the G6 was not going to ramp up for another half-year. If they had postponed Oprah's give-away until the following year, Pontiac likely would have sold several thousand more cars. Need I point out what has happened to Pontiac in the intervening years?

This needn’t be overly complicated. It simply requires an attitude of curiosity across the organization, where people want to know what is going on around the company, not just what the guy in the next cubicle is doing.

There can and should be numerous ways to oxygenate the organization – no one way is right or wrong. An internal newsletter helps, as does a robust and frequently updated intranet news service.

But nothing can substitute for actively getting to know the other guys and what’s on their minds. It’s amazing what you can learn just by talking and listening.

The Losing Locker Room

The use of sports metaphors in business is a common and established practice. And it’s natural in the parallel contexts of competitive teams vying against one another for supremacy.

Though the metaphor can be taken too far, there are in fact a number of appropriate analogies where businesspeople can get operational ideas and lessons from the sports world.

Managers can learn from coaches how to bounce back from defeat, how to stay on top, how to maximize limited resources, and how best to communicate with their teams, to name just four.

In that light, what can we learn from coaches as to the appropriate leadership communications in the context of failure? Suppose your operation loses a major client due to fumbled service. Or your fourth quarter results mean your unit didn’t make its annual budget.

Maybe your “superstar” sales team didn’t hit its numbers, or a competitor’s new product rollout caught you off-guard and they overtook your market share lead. Sure, the competition was tough. It usually is. Perhaps you faced a weak market, or a struggling economy.

If you’re the one in charge, what’s the right message to your people, through what means, and when?

Football may provide some valuable insights for this challenge.

The National Football League holds its playoffs in January, on the way to the Super Bowl in early February. The playoffs start with 16 teams and end with one champion. What about the 15 other teams? How does a losing coach deal with that, and what does he say to his team after a disappointing defeat abruptly ends their once promising season?

On the heels of an embarrassing rout in the first round of the NFL playoffs, I wondered about the locker room atmosphere of my favorite team, the New England Patriots. More to the point, what did Coach Bill Belichick (left) tell his team after an unexpected lop-sided loss to the underdog Baltimore Ravens?

This is the same team that won three Super Bowls in the past 10 years. Even in those years when they didn’t go all the way, they've always been highly competitive.

What a losing coach may say to the media after the loss can reveal some of his attitude and approach in the locker room. After his team’s second-round 34-3 loss to the Minnesota Vikings, Dallas Cowboys coach Wade Phillips said that it felt "like an elevator falling all the way from the top."

That simile is accurate and revealing. As a team, the Cowboys had an on-and-off season this year. But at the end, they rode the elevator nearly to the top, only to get routed in the divisional playoff game.

It’s a cliché to hear “you have nothing to be ashamed of,” and other such attempts at encouragement and solace. So what’s the most constructive thing a coach or business leader can say to the team? What words and messages will salve wounded egos and encourage recommitment to the longer term?

The losing locker room is not the time or location for blame placing or recriminations. Instead, effective coaches recall the good work that had been done that season, the effort that got the team as far as it did. They cite the outstanding individual performances, but don’t dwell on the errors and miscues of the loss. They save that for later, for the one-on-one private conversations that must take place between the coach and those players that need encouragement and corrective guidance.

The loser’s locker room immediately after the loss is the time and place for finding the good on which you can build a foundation and begin motivating the team for future greatness. The immediacy of the moment right after the loss is the right time and place to deliver such messages.

The team whose coach is able to comfort and encourage his dispirited players is the team that’s more likely to return to the playoffs again next year with players that quickly regain their self-confidence and sense of excellence.

My guess is that Bill Belichick excels at this challenge. Reticent and cranky in his post-game press conferences, this is a leader who, behind the scenes, quietly encourages and motivates his players year after year. It shows, too, in the Patriots’ post-season record. In his 10 seasons as the Patriots’ head coach, the team has appeared in the Super Bowl four times, won three, and missed the playoffs only twice.

That’s a record any business manager should envy.