Guide Training with the Midas Touch: Developing Your Organizations Greatest Asset

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Training with the Midas Touch: Developing your organization’s greatest asset

Tell Us What You Need. What We Do. Knowledge We provide your people with the expertise they need to become engaged and empowered. Leading safety management solutions Engineering-based, field-proven approach to risk management Industry recognized Mechanical Integrity expertise. Efficiency We optimize your people, technology and systems to ensure safe, efficient operations. Performance We make sure your assets perform at every stage, in every environment. Independent engineering inspection and verification Committed to long-term strategies that build and maintain world-class infrastructure.

Our Solutions Our solutions cover inspecting and verifying technology and equipment designs, delivering safety, risk and compliance services, optimizing asset performance, providing advanced engineering support and certifying management systems for the marine; offshore; oil, gas and chemical; government and power sectors. The train is controlled by a set of switches and levers. When the driver pulls one lever, the train goes forward; when he pulls another, it stops, and so on.

When an organization is well aligned, all the managerial levers are easily and neatly moved. They function smoothly so that driver, passengers, and train gracefully move forward as one.

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Messages on these subjects wield extraordinary influence within the firm. When leaders take it for granted that everyone in the organization shares their assumptions or knows their mental models regarding the five subject areas, they lose their grip on the managerial levers and soon have the proverbial runaway train on their hands.

But properly defined, disseminated, and controlled, the five topics afford the leader opportunities for organizational alignment, increased accountability, and substantially better performance. First, why do these five particular topics matter so much—why would defining corporate culture be a higher priority than, say, defining customer relationships? The topics not only present the sharpest examples of the dangers of imprecise communication, but, when mastered, they also produce the greatest leadership leverage.

I am hardly suggesting that in defining the five concepts precisely, leaders should become dictators or blowhards.

Financial Results

On the contrary, I am suggesting that when a leader defines what he or she really means and sets a clear direction according to that definition, relationships and feedback improve, action is more efficient and on-strategy, and improved performance follows. But when the corporate structure is changing, the org chart can truly become fearsome, particularly in companies where, because of the political culture, employees worry about risk to their personal status.

If a CEO fails to take definitional control of a reorganization, with its prospect of job losses, boss changes, and new modes of working, the whole company can grind to a halt. A few years ago, Carly Fiorina decided that Hewlett-Packard needed a top-to-bottom reshuffling. She had a fixed idea that reorganizations must be managed with extreme care, and she implicitly communicated her belief by the cautious way she floated her ideas with senior managers.

Managers, jostling for power and position, got lost in political battles. Motivation plummeted. Contractors were put off, since no one knew who would be managing which divisions after the reorganization. When the new organizational structure was finally communicated, still more time passed unproductively as employees settled into their new positions. A total of 12 weeks—a full quarter—were effectively lost. If you multiply that time by employee salaries, and factor in the inevitable lapses in customer service and product innovation during the period, you can conservatively estimate the damage to the company.

It may be unreasonable to blame Fiorina for failing to realize that she was communicating her trepidation, or to fault her for not divining the consequences of talking about her reorganization ideas months ahead of time. After all, leaders cannot be held to perfection in execution. But they can be held to a standard when communicating a vision and its rationale. If Fiorina had laid out the master plan behind the reorganization more clearly, made her decisions more quickly, and communicated more explicitly, the troops at HP would have gained a better understanding of the process, the reasons for the extended time frame, and their future places within the company.

A leader who quickly takes charge of the communication around a reorganization can prevent the discourse from engendering fear. The most productive way for a leader to think about organizational structure is as a flexible map of accountability for action and, thus, results—a guideline whose purpose is to define goals and optimize resources, not to oust or devalue employees.

When a reorganization is presented as such, it loses its reputation as a proxy for personal power shifts, whether real or imagined. When a reorganization is presented as simply a guideline for defining goals and optimizing resources, it loses its reputation as a proxy for shifts in personal power.

The CEO of a employee software company shows how a leader can prevent political fears from taking hold by keeping communications brief and to the point. Rather than viewing the org chart as a source of anxiety, and communicating that attitude to the company, the CEO chose to see it as simply a temporary structure for optimizing resources. For example, the CEO realized at one point that he needed to realign internal resources because a close competitor was gaining an advantage.

He called an all-hands meeting for a Monday morning. I get paid to win it, and so do you. We were both like captains of firefighting teams. We each had seven people and a full set of buckets and hoses. My team had five guys armed with buckets and two with hoses. His team had three guys with buckets and four with hoses. I wanted it to be seen as a business necessity to remain competitive.

But I would argue that the value of clear, honest, explicit communication rises exponentially with the size of the organization. Having gathered the data and made her decision, Fiorina was under no obligation to provide previews of coming attractions.

The Five Messages Leaders Must Manage

Within 48 hours of the announcement, she might have held a companywide meeting, complete with a Webcast, to explain why the change was necessary. She thus would have communicated that the organization chart has nothing to do with politics and everything to do with organizational effectiveness. One CEO I knew truly believed that the only purpose of his job was to make aggressive predictions and promises about quarterly results and then achieve the numbers by any means possible.

By the ninth week of every quarter, when projections fell short, he put enormous pressure on his sales professionals and finance people. Quite the opposite occurred. Though the company never met with any punitive action, its poor practices forced recalculations of results and exposed it to huge write-downs. In the long term, consistently positive results spring from intelligent strategy and an incessant focus on quality of execution. Think of a golf pro like Tiger Woods, whose best bet for winning major championships is to master his aim, setup, and swing.

Once the ball is in the air, there is no way to control it; it will land where it will. Similarly, effective leaders understand that there is more leverage in using quarterly results as a metric for long-term improvement than in worrying only about short-term market wins.

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By using results as a diagnostic tool in the service of improving future execution, and by asking employees to participate in the analysis, effective leaders encourage honesty and engage their troops in open dialogue. Employees are more likely to generate good ideas, and the firm is more likely to surpass financial expectations quarter after quarter. For him, results were not a punitive weapon but a useful diagnostic and learning tool.

When the firm, at one point, missed a quarterly goal, he and his management team analyzed all the factors contributing to the shortfall. They discovered that, as a result of an unusual quality-control issue, the company had been unable to make some end-of-quarter shipments. Instead of reacting emotionally and assigning blame, Adler asked rigorous questions of the senior management team, which was able to uncover the root cause of the problem. He communicated this information broadly to ensure organizational learning. By focusing on and taking responsibility for the truth, Adler made others in the company feel safe to discuss the issue without fear of an emotional response that might lead to arbitrary punishment.

Through his actions, Adler sent an implicit message that the past was over and tomorrow was another day. Rather than being immobilized by uncertainty and wondering who would be forced to take the heat, software engineers and quality assurance technicians worked together to improve their processes to minimize the probability of missing sales projections because of last-minute quality or manufacturing glitches. CEOs wear many hats and play many roles in the service of leadership, but, surrounded by people who seek their feedback and approval, some fall into the trap of thinking that their responsibility is to be the person who has all the answers.

This is especially true of entrepreneurial CEOs who are also founders, because their identities are closely tied with their companies. This puts him in a very lonely, isolated position where information becomes unreliable and useful input is stifled. Jim took great comfort in this assumption; indeed, since he was deeply insecure in other leadership areas, his identity rested on it. When his managers made suggestions for staving off the competition, Jim ignored them, using his positional power to drown out discussion. I will explain what we have to do. Frustrated, his managers soon grasped the implicit message that they were neither heard nor valued, and they began to flee the company, taking much intellectual capital with them.

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Effective leaders, by contrast, understand that their role is to bring out the answers in others. Food Records included a maximum time issued up in by David Balfe, who later occurred on Andy Ross as his apartment.

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