MOST LEADERS (the less than great ones) can become afraid of learning their employees’ true feelings towards the company and its overall structure. In turn, they shy away from even initiating such conversations and asking the important questions.
Strong leaders, on the other hand, happily ask these questions with an eye on making things better for their team. When everyone is heard and acknowledged, only then can a leader make the right decisions and give each employee what he or she needs. If you don’t ask, who will?
1. What is your overall satisfaction with your team?
This question is pretty straightforward, but perhaps the most powerful. As a manager, it allows you to gain access to the big picture—providing key understanding on what’s working and what isn’t, directly from your staff. It’s no secret that dissatisfaction with overall team performance is a primary reason for top talent to exit. Taking the initiative to ask your employees for feedback, and frequently, will not only provide you with valuable insight, but put you in a position to rectify concerns before the damage is done.
2. If the best place you’ve ever worked was a 10, please rate your current company.
You’ll either be the 10, or you won’t. If you are not, don’t become defensive or offended, ask what specifically was better at your employee’s previous company. Then compare it to your current team and ask yourself, as the leader, would it be possible to adopt some of those successful strategies?
3. How well does your leader do with supporting and developing you? (Consider time, tools and training.)
One of the top responses on employee satisfaction surveys, across the board, is how well we do with making our people a better version of themselves. If you are not actively investing in your employees, they will eventually move on to find someone who will. Do you give them enough of your time? Do you give them the right tools to compete and win? Do you train them in new skills and technologies that allow them to be more effective?
4. How well does your leader hold you accountable?
This is very important to a high-performance culture. Highly engaged and highly accountable teams outperform those who lack both. When you have the right people in the right seats, the best employees don’t mind being held accountable for their actions and their results. Those standards are what make them feel “elite.” After all, who wants to be part of a team that anyone can be a part of? If they are accountable, they know others are held accountable too, and that’s one of the main ingredients to employees giving their best day in and day out.
5. How well does your leader hold OTHERS accountable?
This question smokes out if your employees feel like there is any favoritism or double standards in play at your company. Obviously, you want to treat everyone on the team the same, but sometimes that doesn’t happen. Oftentimes you’ll discover that leadership and the “favorites” get a pass and the troops get the stick. When leaders are held to a higher standard and not a special one, you’ll find that it’s much easier to get buy-in and acceptance for so many things that seem tough to get. This is particularly relevant to family-owned businesses, where your last name matters more than it should.
6. How well does your leader communicate with you?
When discussing performance issues with their employees, I often find leaders have failed to communicate clear expectations and a clearly defined process of how they expect their employees to perform. The leaders are then bewildered that the task hasn’t been accomplished to their satisfaction. Leaders need to ensure that proper communication has been achieved before moving on to work on other things. An easy way to accomplish this is to simply ask, “OK, do you feel like you’ve got it?” (Almost always expect a “yes” answer, even when it’s really a “kind of” or a “no.”) Then say, “Great! Now echo that back to me, just to make sure I’ve explained this well to you?” By doing so, you’ll then have the opportunity to get crystal clear with them. Without this important step, prepare for some fuzziness in your employees’ results.
7. How likely are you to recommend your company to a friend that is looking for work?
This is like the Net Promoter Score for you as a leader, and for the company at large. If they were at a BBQ with their friends on a weekend and the topic came up, how do you think your team would respond? Would your employee say, “You’d be lucky to get hired. My company is world-class!” Or would the conversation be more like, “Well, if you can get past a ton of B.S., politics and red tape, you can grind out a living just like I do!”
8. Rate your team “health.”
To give you a gauge for their response, a 10 is when trust is very high, there is heathy conflict, nothing is personal, when something is called out for not being ideal, no one gets defensive or upset because everyone is there to make things as good as they can possibly be. A one is when people are not speaking the truth, everyone is walking around on eggshells, and it’s better for your career to not rock the boat and to go with the flow.
9. Do you feel adequately recognized for your contributions to the team?
This is another top response that I see on employee satisfaction surveys. Employees work hard, sometimes stay late, give their all and go above and beyond. If they aren’t recognized for these sacrifices, they will usually stop these activities because they don’t seem to matter. Sometimes others unjustly steal credit for their work, or leaders are simply oblivious to their contributions. What is your format to make sure this doesn’t happen at your company?
10. How likely are you to seek advancement at your company?
This is a great way to identify your next leaders. It also speaks to how your leaders are perceived by the staff. If they feel your managers are a bit of a joke, are clueless and cannot imagine themselves being one of those types, you might have a bigger issue on your hands. Not everyone wants to be a leader, and that is perfectly OK. If they say no, ask why, but don’t try to “sell” management to them. It’s better to understand what their reasons are and to respect them.
The sum of all of these questions together will give you valuable information on where you are doing well and where needs immediate attention. If you ask these 10 questions every 90 days, you can compare your team’s last quarter responses and spot any problem areas before things get too caustic to your beloved culture. Again, if you don’t ask, you are guessing, and that might not work out well for you, or for your team!
Creating and leading high-performing teams in any setting requires a high-trust environment. A critical component in creating and keeping that trust is complete transparency across the team. Having seen the empowering effect of this simple notion, I regularly reminded my direct-reports that the expectation was, “All cards are face-up on the table for the full team, in every decision and on every topic.”
I first learned the value of this kind of full transparency during my years working in the Mission Control Room while operating Space Shuttles and the International Space Station. Everyone on the team reviewed every report, procedure, and mission-related communication of any kind between Mission Control and the astronauts.
That thorough transparency was never about micro-management. It was in recognition that:
Everyone on the team knew that it was team success that mattered, not simply individual performance. “Showing our work” to our peers was not a threat to our individual authority. It was an easy method to get more eyes on every problem and engage broader and deeper expertise to ensure nothing slipped past us. Rather than slowing down decision-making, for decades these teams have routinely discussed and resolved exceptionally complex issues and have been able to take critical actions in minutes to protect a spacecraft hurtling through space.
The same risks often apply in management, where mistakes in one part of a company can have ripple effects that cause problems for other areas. If poorly managed or left unsolved, those problems can cost the company money, erode product quality, bankrupt the company, and in some industries, injure employees and worse.
Just as we discovered in Mission Control, transparency is the simplest way to engage all members of the management team, and with them, the expertise and perspective of the organizations they led for the enterprise. And just like in Mission Control, that greater engagement brings with it better informed, highly-reliable decision-making.
As an executive managing a $650 million/year enterprise, my direct-reports would often quote me before telling me and their peers some “ugly truth” or something they didn’t think I’d want to hear, “Just remember, you always say, all cards on the table…”
Every time they used that quote, it made me smile and think, “Now we’re talking! Now we’re getting to it.” More times than not, what followed was news about a project that was over budget or behind schedule, an unresolved engineering hurdle with an upcoming mission, or some mistake we had made in an earlier decision that was now putting us at risk. Most importantly, it gave the full senior management team and the team’s they led an opportunity to help us find the best solution. In the end, this is never about highlighting some part of the team’s mistakes, it is to ensure the team catches any weakness in our on-going performance.
Of course, transparency does not just protect the boss from the team’s mistakes. It also allows the team to catch and correct the boss’s mistakes, as well as to offer innovations the boss may not see, which I was reminded of as the boss many times.
For example, during a tour in a development lab, I was shown a demonstration version for a new space station simulator based in a desktop personal computer. Seeing a cost saving potential, I suggested several copies be made immediately available for testing by a number of our divisions. Eyes widened around the room, including by several senior managers, but the team saluted and went to work.
After months of mixed reviews, the division responsible for managing and developing our training systems reported, “Look, Paul, this isn’t going to work. We never thought it would, but you told our people to do it, so we did. We can keep throwing money and manpower at it, but the answer won’t change for a long time. However, we can accomplish what you’re after through some other work we’ve been doing, and we’re ready to show that to you and the management team any time.”
What followed became a project that moved our space station training software from $2 million sets of equipment that filled a room, to a single rack of servers costing $50,000 and contributed to total fixed cost reductions of more than 50 percent.
Lesson learned: Share those great ideas with the full management team before giving direction. Rely on the same transparency to spark discussions that can lead to better ideas and innovations that deliver.
This kind of transparency can become a habit and part of your culture. It isn’t just for the bad news, but also for routine requests for better ideas, assurance that we’re not missing something, sharing resources to the areas that can make the next big gain… it makes us stronger and more successful as an enterprise.
Yes, the truth will set you free, and transparency is the way to find it and set the entire team free.
Abstract: This is an article about integrity and its importance as a critical success factor in business.
A very good friend of mine suggested I write an article entitled, “Who are you?” After thinking about this concept, I decided that this is a very good question. Who are you? What are you made of? What are your values, morals, mores, ethics and guiding principles? What are the tenants of your faith? To what power do you ultimately ascribe?
My living has shown me that a lot of people wax eloquently about their high values and standards. I have heard my fill of this around churches. My experience has taught me that in the course of life, you will be tested. Sometimes the test is over a big issue with substantial consequences and a high level of visibility. At other times, the test is trivial. The only witnesses will be you and your God. Will that test show that you are who you say you are when it really matters? Will your proclamations be affirmed by your actions?
I was coming back to my mountain house one day. As we approached, we saw the man of the family that was renting the house next door and two of his small children coming out of our driveway with all of our firewood they could carry. When I confronted the man with his children as witnesses, he offered to pay me for the wood. I told him that if he needed the wood bad enough to feel compelled to enlist his small children in the act of theft by taking, I did not want his money. He offered to return the wood. I asked him if he was inclined to return the wood, why would he steal it in the first place? I told him that if he had asked me in advance, I would have given him enough wood to build a campfire for his family. I told him to enjoy the stolen wood. I did not want it back. I think the man was so ashamed that he did not know what to say. I hope his encounter with me burned an image onto his mind and the minds of his children they will never forget. I wonder how the children’s opinion of their father might have been permanently altered by their encounter with me? The children were not old enough to think about who they are but I wonder if what their dad was doing with them was consistent with other values he was supposed to be teaching them? I wonder if the man will remember his encounter with me when his children become teenagers and get involved in considerably more serious thefts? I wonder if he will connect the dots back to the day he was teaching his children that theft was acceptable? Who was this man? Is who he really is consistent with who he tells others he is? Who will his children grow up to be?
I have seen my fill of bizarre behavior in healthcare organizations. People that will say or do anything to advance their cause in the organization. Business partners that are actively or complicity involved in less than honorable dealings. I worked with a man who had a very simple test of integrity: Does the other person do what he says he will do or not? If you cannot trust someone to do what they say they will do, what can they be trusted about? I have developed a serious problem dealing with people I do not trust. I know that this is more the rule than the exception in politics where anything goes but I choose to avoid dealing with people who have demonstrated they cannot be trusted.
When my children were growing up, I taught them that there is a major problem with integrity. You can spend an entire lifetime developing integrity, respect and rapport among your acquaintances that can be permanently destroyed in a matter of seconds when a breach of honor or integrity occurs. After the breach, there is no cure. People aware of the indiscretion will never trust you again because they have no way of knowing if what you are saying this time is true or not. Along the way, I came across the following poem. It had a profound effect on me and my children and probably has something to do with them going up to be the adults they are. Their formative years were very highly influenced by their grandparents. Do not underestimate you ability to have an effect on others, especially children. Remember the Randy Travis song ‘He Walked On Water?’ I cannot listen to this song without tearing up because Randy is singing about my mother’s father, a man whose shoes I could never hope to fill.
You got it from your father,
it was all he had to give.
So it’s your’s to use and cherish, for as long as you may live.
If you lose the watch he gave you, it can always be replaced.
But a black mark on you name son, can never be erased.
It was clean the day you took it, and a worthy name to bear. When he got it from his father, there was no dishonor there.
So make sure you guard it wisely, after all is said and done. You’ll be glad the name is spotless, when you give it to your son.
So, who are you? Are you who you say you are? Who do others say you are? Do you have to tell people who you are or is it evident in your living? What will you do when you are tested? I can say from personal experience that I have been tested and I failed a test when I was younger in an effort to protect my self-interest by going along with something that I knew was wrong. While I have been forgiven, I have never been able to forgive myself. I have been tested since then and I will not make the same mistake twice if for no other reason than the pain of bearing the guilt and remorse is not worth it. What would you do if the stakes of the test was your job? What if you did the wrong thing and still got the outcome you were trying to avoid? Would you judge the risk as having been worth taking? My experience has taught me that it is not worth it to take such a chance in the first place regardless of the risk.
An acquaintance of mine has been charged with felonies by the government related to alleged falsification of reporting related to a corporate integrity agreement among other things. Did he know the reporting was incorrect? The trial will make that determination. If the erroneous reporting was intentional, the result will be devastating. The government has asked the court for his assets to be forfeited. He and his family will be severely impacted regardless of the outcome of this dispute. Sadly, the government’s case has carried so often when healthcare compliance is involved that political candidates like John Osoff run on the claim that they will save the government by curtailing abuse of the Medicare program. The Attorney General recently made news by announcing that he was bringing charges against over four hundred people at the same time alleging they defrauded the Medicare program. Anyone involved in making any kind of disclosure to the government that does not take the potential consequences of inaccurate disclosures whether intentional or not seriously is a certifiable idiot in my opinion. That someone would spend a single second contemplating whether or not to do the right thing when compliance is involved says everything about who they really are.
Willie Nelson said in a song that, “Regret is just a memory written on my brow and there’s nothing I can do about it now.” While you cannot change anything that has happened before, you can change a lot going forward. If you owe anyone an apology for anything you regret, strongly consider doing it.
I would like to thank my dear friend Linda Jackson who is one of the strongest and most incredible people I have ever met for inspiring this article.
hen organizations get into big trouble, fixing the culture is usually the prescription. That’s what most everyone said General Motors needed to do after its recall crisis in 2014—and ever since, CEO Mary Barra has been focusing on creating “the right environment” to promote accountability and head off future disasters. Pundits far and wide called for the same remedy when it came to light that the U.S. Department of Veterans Affairs, deemed a corrosive bureaucracy by federal investigators, kept veterans waiting months for critical health care. Cultural reform has likewise been proposed as the solution to excessive use of force by police departments, unethical behavior in banks, and just about any other major organizational problem you can think of. All eyes are on culture as the cause and the cure.
But the corporate leaders we have interviewed—current and former CEOs who have successfully led major transformations—say that culture isn’t something you “fix.” Rather, in their experience, cultural change is what you get after you’ve put new processes or structures in place to tackle tough business challenges like reworking an outdated strategy or business model. The culture evolves as you do that important work.
Though this runs counter to the going wisdom about how to turn things around at GM, the VA, and elsewhere, it makes intuitive sense to look at culture as an outcome—not a cause or a fix. Organizations are complex systems with many ripple effects. Reworking fundamental practices will inevitably lead to some new values and behaviors. Employees may start seeing their contributions to society in a whole new light. This is what happened at Ecolab when CEO Doug Baker pushed decisions down to the front lines to strengthen customer relationships. Or people might become less adversarial toward senior executives—as Northwest employees did after Delta CEO Richard Anderson acquired the airline and got workers on board by meeting their day-to-day needs.
The leaders we spoke with took different approaches for different ends. For example, Alan Mulally worked to break down barriers between units at Ford, whereas Dan Vasella did a fair amount of decentralizing to unleash creative energy at Novartis. But in every case, when the leaders used tools such as decision rights, performance measurement, and reward systems to address their particular business challenges, organizational culture evolved in interesting ways as a result, reinforcing the new direction.
Revisiting their stories provides a richer understanding of corporate transformation and culture’s role in it, so we share highlights from our conversations here. Most of these stories involve some aspect of merger integration, one of the most difficult transitions for companies to manage. And they all show, in a range of settings, that culture isn’t a final destination. It morphs right along with the company’s competitive environment and objectives. It’s really more of a temporary landing place—where the organization should be at that moment, if the right management levers have been pulled.
In the fall of 2014, the hedge fund activist and Allergan shareholder Bill Ackman became increasingly frustrated with Allergan’s board of directors. In a letter to the board, he took the directors to task for their failure to do (in his words) “what you are paid $400,000 per year to do on behalf of the Company’s owners.” The board’s alleged failure: refusing to negotiate with Valeant Pharmaceuticals about its unsolicited bid to take over Allergan— a bid that Ackman himself had helped engineer in a novel alliance between a hedge fund and a would-be acquirer. In presentations promoting the deal, Ackman praised Valeant for its shareholder-friendly capital allocation, its shareholder-aligned executive compensation, and its avoidance of risky early-stage research. Using the same approach at Allergan, he told analysts, would create significant value for its shareholders. He cited Valeant’s plan to cut Allergan’s research budget by 90% as “really the opportunity.” Valeant CEO Mike Pearson assured analysts that “all we care about is shareholder value.”
These events illustrate a way of thinking about the governance and management of companies that is now pervasive in the financial community and much of the business world. It centers on the idea that management’s objective is, or should be, maximizing value for shareholders, but it addresses a wide range of topics—from performance measurement and executive compensation to shareholder rights, the role of directors, and corporate responsibility. This thought system has been embraced not only by hedge fund activists like Ackman but also by institutional investors more generally, along with many boards, managers, lawyers, academics, and even some regulators and lawmakers. Indeed, its precepts have come to be widely regarded as a model for “good governance” and for the brand of investor activism illustrated by the Allergan story.
Yet the idea that corporate managers should make maximizing shareholder value their goal—and that boards should ensure that they do—is relatively recent. It is rooted in what’s known as agency theory, which was put forth by academic economists in the 1970s. At the theory’s core is the assertion that shareholders own the corporation and, by virtue of their status as owners, have ultimate authority over its business and may legitimately demand that its activities be conducted in accordance with their wishes.
Attributing ownership of the corporation to shareholders sounds natural enough, but a closer look reveals that it is legally confused and, perhaps more important, involves a challenging problem of accountability. Keep in mind that shareholders have no legal duty to protect or serve the companies whose shares they own and are shielded by the doctrine of limited liability from legal responsibility for those companies’ debts and misdeeds. Moreover, they may generally buy and sell shares without restriction and are required to disclose their identities only in certain circumstances. In addition, they tend to be physically and psychologically distant from the activities of the companies they invest in. That is to say, public company shareholders have few incentives to consider, and are not generally viewed as responsible for, the effects of the actions they favor on the corporation, other parties, or society more broadly. Agency theory has yet to grapple with the implications of the accountability vacuum that results from accepting its central—and in our view, faulty—premise that shareholders own the corporation.
The effects of this omission are troubling. We are concerned that the agency-based model of governance and management is being practiced in ways that are weakening companies and—if applied even more widely, as experts predict—could be damaging to the broader economy. In particular we are concerned about the effects on corporate strategy and resource allocation. Over the past few decades the agency model has provided the rationale for a variety of changes in governance and management practices that, taken together, have increased the power and influence of certain types of shareholders over other types and further elevated the claims of shareholders over those of other important constituencies—without establishing any corresponding responsibility or accountability on the part of shareholders who exercise that power. As a result, managers are under increasing pressure to deliver ever faster and more predictable returns and to curtail riskier investments aimed at meeting future needs and finding creative solutions to the problems facing people around the world.
Don’t misunderstand: We are capitalists to the core. We believe that widespread participation in the economy through the ownership of stock in publicly traded companies is important to the social fabric, and that strong protections for shareholders are essential. But the health of the economic system depends on getting the role of shareholders right. The agency model’s extreme version of shareholder centricity is flawed in its assumptions, confused as a matter of law, and damaging in practice. A better model would recognize the critical role of shareholders but also take seriously the idea that corporations are independent entities serving multiple purposes and endowed by law with the potential to endure over time. And it would acknowledge accepted legal principles holding that directors and managers have duties to the corporation as well as to shareholders. In other words, a better model would be more company centered.
Before considering an alternative, let’s take a closer look at the agency-based model.