Bad Economy or not…poor management skills cost companies big time

In an article written By Dr. Travis Bradberry “No one influences an employee’s morale and productivity more than his or her supervisor. It’s that simple. Yet, as common as this knowledge may seem, it clearly hasn’t been enough to change the way that managers and organizations treat people.
In a recent survey, 64 percent of managers admit that they need to improve their management skills. When asked where they are supposed to focus, managers overwhelmingly say, “Bringing in the numbers,” and yet managers are most often fired for poor people skills.
Here are some more hard truths we face in the world of work:
• Approximately 50 percent of Americans are dissatisfied with their jobs.
• More than two-thirds of North Americans are actively considering leaving their current job.
• Thirty-two percent of employees spend at least twenty hours per month complaining about their boss.
• Employees whose manager often uses “seagull-type” behaviors are 30 percent more likely to develop coronary heart disease than employees of a manager who rarely exhibits these behaviors.
Few organizations recognize the degree to which managers are the vessels of a company’s culture, and even fewer work diligently, through training and coaching programs, to ensure that their vessels have the knowledge and skills that motivate employees to perform, feel satisfied, and love their jobs.
The Seagull Manager
Seagull managers frustrate and alienate those who need them the most by engaging in three behaviors which are the hallmarks of a disenfranchising and unproductive work environment:
Swooping: Rather than staying current and involved with their team’s performance, seagull managers swoop in on problems only at the last minute.

Squawking: Seagull managers have an unhealthy need for control, which leads to one-sided conversations and orders in the place of advice.
Dumping: People who work for a seagull manager are always waiting for the hammer to drop. Praise is infrequent or nonexistent. Mistakes are punished without constructive feedback or opportunity for improvement.
The Three Virtues of Superior Managers
In the course of my work with organizations large and small, I’ve witnessed a peculiar common trait among the most successful enterprises. These companies step confidently beyond the success strategies of conventional business wisdom—brand strength, strategic leadership, technological innovation, customer service, and the like—to leverage the single greatest resource inside every company: its people.
To date, the TalentSmart Study has analyzed more than 150,000 managers in every industry, at every level of management, and in a wide variety of job functions. We’ve found that superior managers—those who lead their teams to the highest levels of performance and job satisfaction—often share three critical habits. Those three habits are:

1) Set clear expectations: Superior managers ensure that employees’ efforts are spent doing the right things the right way. This means thoroughly exploring what is required of employees, how their performance will be evaluated in the future, and getting agreement and commitment to work toward established goals. There is a big difference between telling people what’s expected of them and making sure that what they’ll be doing is completely understood.

To improve expectation setting, make sure you’re the one explaining what’s expected, and what needs to be done. Don’t pass this responsibility to someone else.
2) Communicate frequently: Observe what employees say and do, and speak openly with them about their work. Delivers the resources, guidance, and recognition your employees need by communicating frequently and in simple terms.

To improve communication, check in with your team frequently and with sincere interest. You can’t help people get results if you don’t know how they’re doing.
3) Attention and feedback: Pay attention to each employee’s performance, and offer praise as frequently and emphatically as you do constructive feedback. Positively reinforce successful endeavors and realign efforts that become misdirected.
To improve employee performance, schedule time in your calendar each day where you focus solely on the needs of your team. Remember, as a manager, your primary purpose is managing people.
Are You A Seagull Manager?
If this article has achieved its purpose, you’ve asked yourself that question at some point along the way. But the real question is, when are you a seagull manager? It would be wonderfully simple—albeit frightening—if we could each be categorized as the “right” or “wrong” kind of manager. We can’t just target “problem” managers, when the reality is that we’re all the problem. That’s right. Every single one of us is a seagull manager sometimes, in some situations, and with some people. The real challenge lies in understanding where your seagull tendencies get the better of you, so that you can fly higher and eliminate the negative influences of seagull behavior.”
Dr. Travis Bradberry is dedicated to the scientific study of individual excellence and company performance serving more than 75 percent of Fortune 500 companies. His new book Squawk! How to Stop Making Noise and Start Getting Results addresses the problem of seagull managers in the workplace.


Upgrading Talent During this Downturn

A downturn can give smart companies a chance to upgrade their talent.

Downturns place companies’ talent strategies at risk. As deteriorating performance forces increasingly aggressive head count reductions, it’s easy to lose valuable contributors inadvertently, damage morale or the company’s external reputation among potential employees, or drop the ball on important training and staff-development programs. But there is a better way. By emphasizing talent in cost-cutting efforts, employers can intelligently strengthen the value proposition they offer current and potential employees and position themselves strongly for growth when economic conditions improve.

Companies can maintain their attractiveness to internal and external talent by using cost-cutting efforts as an opportunity to redesign jobs so that they become more engaging for the people undertaking them. A job’s level of responsibility, degree of autonomy, and span of control all contribute to employee satisfaction. Head count reductions provide a powerful incentive to use existing resources better by breaking down silos and increasing the span of control for challenging managerial roles—thus improving the odds of engaging key talent in the redesigned jobs.

Consider Cisco Systems’ approach to downsizing during the last recession. In 2001, as deteriorating financial performance forced the elimination of 8,500 jobs, Cisco redesigned roles and responsibilities to improve cross-functional alignment and reduce duplication.1 The more collaborative environment fostered by such moves increased workplace satisfaction and productivity for many employees. Initiatives like Cisco’s succeed when companies focus on redesigning jobs and retaining talent at the outset of downsizing efforts.

In addition to redesigning roles, companies cutting jobs should carefully protect training and development programs. These are not only essential to maintaining workplace morale and increasing long-term productivity, but they also give people the skills necessary to carry out redesigned jobs that have greater spans of control. During the last recession, International Paper continued offering classes at its leadership institute by replacing external facilitators with the company’s senior leaders.2 This approach not only reduced the cost of delivery but also, thanks to the involvement of senior leaders, redirected the content of the leadership program by tying it more closely to decisions and skills affecting the company’s current performance. Similarly, IBM retained its employee-development programs during its major performance challenges in the mid- to late 1980s. It took the arrival of Lou Gerstner as CEO and a new strategy to turn the company around, but the historical investments IBM had made in developing its people helped achieve a successful turnaround.

Before undertaking widespread layoffs, companies should use their performance-management processes to help identify strong employees. Companies that conduct disciplined, meritocratic assessments of performance and potential are well placed to make good personnel decisions. These companies should also bring additional strategic considerations to the decisions. They should assess which types of talent drive business value today and which will drive it three years from now, as well as which talent segments are currently available and which will be in the future—keeping in mind, for example, that new MBAs will be equally available in two years. They should also look at which types of talent would take years to replace or develop—for instance, skilled electric utility engineers in an environment where retirements are dramatically reducing supply. Performance management well informed by key strategic questions can minimize the negative cultural impact of downsizing, improve the bottom line, and help identify talented people the company should try to retain.

Companies that are reducing staff must focus relentlessly on the internal cultural and external reputational implications of cost-cutting efforts. Although strong employer brands are resilient, it’s difficult to reestablish brand strength once the culture has been damaged. The way many companies conduct large-scale downsizing decreases efficiency, morale, and motivation on the part of remaining employees. It also increases voluntary turnover among high performers and compromises a company’s ability to attract strong talent in the future, as potential employees wonder how risky it is to take a job there.

Counteracting these tendencies requires creativity. In 2001, Cisco gave generous severance packages and assistance with job searches to the workers it laid off and launched a program that paid one-third of salary, plus benefits and stock options, to ex-employees who agreed to work for a local charity or community organization. Steps like these protected Cisco’s employer brand by attempting to make departing employees feel better about Cisco and underscored the company’s commitment to its people for those who remained. The results were measurable: employee satisfaction remained high, and Cisco retained a prominent spot on Fortune magazine’s “Best Companies to Work For” list.

A strong employer brand is also important for companies undertaking selective recruitment even as they cut personnel costs elsewhere. Using slowdowns to uncover and hire displaced talent is often fruitful. Studies have shown that although overall levels of recruitment may level off or even fall, the quality of workers hired rises in recessions. 3 And opportunities to find and hire displaced talent may be particularly valuable during this downturn, as massive downsizing in the financial-services sector makes available to nonfinancial companies a large pool of highly educated and motivated professionals who previously might not have considered jobs outside their previous employers or industries.

Some organizations are moving surprisingly quickly in response to these opportunities in the talent market. In late October 2008, the US Internal Revenue Service hosted a Manhattan career fair targeted at displaced financial-services professionals. More than 1,300 people attended, many standing in line for three hours to learn more about an employer that offered a newly interesting brand of “job stability.”

Cost cutting during a downturn is often necessary to ensure a company’s current profitability and future competitiveness. Rather than freezing all hiring and employee-development programs, companies should use this period as an opportunity to upgrade talent and better engage existing staff. This means reinvesting a percentage of the capital liberated from cost cutting into, for example, selective recruiting and development programs and in efforts to safeguard the culture and to redesign jobs so that they are more engaging to the remaining employees."

December 2008 • Matthew Guthridge, John R. McPherson, and William J. Wolf
Back to top

1See Victoria Chang, Jennifer Chatman, and Charles O'Reilly, “Developing a human capital strategy,” California Management Review, 2005, Volume 47, Number 2, pp. 137–67.

2See Jessica Marquez, “Ready for recession,” Workforce Management, April 7, 2008.

3See Paul J. Devereux, “Occupational upgrading and the business cycle,” Labour, 2002, Volume 16, Number 3, pp. 423–52.


No IT Succession Management?

No IT Succession Management? Fire Your Board

The second in a series of the pros and cons of succession management plans for IT executives.

Succession management has been bantered as a topic of interest in companies and IT departments for several years. Recently there has been an increase interest among IT shops as the need for skilled talent becomes more critical.

Succession management is defined as making provisions for the replacement of key people and requires a clear understanding of an organization’s values, mission and strategic plans. It is a proactive approach that ensures continuing leadership by cultivating talent from within the organization through planned development activities.

Companies who ignore the need for succession management planning risk potentially devastating losses to growth and financial profits when any of the following events occur:
• Executives or managers depart from a company because of retirement, termination or death.
• Key performers leave for another company.
• Promotions within a company leave a vacancy without a trained successor to fill the open position.

Considering the importance of being prepared for unexpected staff changes, I would have guessed succession management was a common topic among company managers. I have been surprised to discover that a lack of succession planning is more rampant than I could have believed possible.

According to the National Association of Corporate Directors, 45 percent of companies with gross sales over $500 million still do not have a clear succession plan. Companies earning less than $500 million experienced even lower succession planning. Succession planning is nearly non-existent in startups and small companies.

Companies can experience tremendous financial losses when they are not prepared for the departure of a key employee. Delays in finding a replacement are common. Due to the skilled labor shortages in technology and related professions, the time that is required to achieve successful replacement results has increased from three weeks to three months.

During extended vacancies, projects are delayed, revenues unrealized, accounts lost, innovation stifled, patents gone, overtime costs rise and employee morale drops. If companies want to be effective at filing unplanned vacancies, they must commit to the development of a detailed and progressive succession management plan to ensure that they have the future skills required for corporate sustainability.

The realities of a continued talent crunch and an ever-widening gap between the number of jobless and the number of skilled technical talent are driving more and more companies to making succession management a priority in their companies. “There is no logical reason not to practice succession planning,” says Bill Bliss, an executive leadership development consultant to several public companies. If (corporate boards) don't demand that a plan is in place, the stockholders should fire the board.”
they are leading—family, employees, customers, and other stakeholders.”

Second, the CEO and even his team are often too focused on short-term issues and not focused on longer term issues—again, this can be for selfish reasons.

A third reason Bliss has experienced: CEOs think about succession but rarely share the ideas with others. “This is not a great strategy, as the likely successor does not know the position they are in, nor is the CEO putting that person on an adequate development plan to get them fully ready,” he says.

While the costs of avoiding succession management are significant, the rewards for companies that do practice succession management are even greater. Succession management can be incorporated into any size company from the smallest startup to large corporate giants.

Norbert Kubilus, former COO of National Data Corporation and now CIO at Tatum Partners in San Diego, credits succession management to his rise at his previous employer. And he's taken that lesson to heart in his professional roles. "As a CIO/CTO/COO, I've developed formal succession plans for my team," he says. "Some CIOs may feel threatened by the concept of CIO succession planning ... but developing one or more strong candidates demonstrates that the incumbent CIO is concerned about the continuity of IT leadership and about protecting the company's technology investment."

Succession management also preserves knowledge including intellectual property within a company. “With a lot of intellectual property inside people's heads these days it is important to preserve those heads via a good succession plan," says Manuel Mellos, director of IT at Woolworth’s. "Succession planning may assist in extracting that intellectual property out of those heads as well.”