Archive | August, 2010

The Age of Mistrust

Today, it seems that trust of workplace leaders in the USA is at a very low ebb. According to reports, many American employees plan to look for a new job when the economy stabilizes. Those that do cite low trust of their workplace, senior leaders, direct bosses, and even co-workers as a primary driver.

Two recent research studies have noted this “age of mistrust.” According to Deloitte’s 2010 Ethics & Workplace Survey, one-third of employed Americans plan to look for a new job when the economy gets better. Of this group, 48 percent say that a lack of honest communication from company leaders is their primary reason for that decision. This survey also reports that 65 percent of Fortune 1000 executives who are concerned with the upcoming “talent drain” believe trust is a factor in this potential voluntary turnover.

Maritz Research’s recent workplace study echo’s the Deloitte findings. According to the Maritz poll, only 11 percent of American employees strongly agree that their managers show consistency between their words and their actions. Only 7 percent of employees strongly agree that they trust senior leaders to look out for their best interest (!) and only 7 percent believe their co-workers will do so.

The Maritz poll also found that about 20% of respondents do not believe that their company’s leader is completely honest and ethical; fully 25% disagree that they trust management to make the right decisions in times of uncertainty. Of those employees who do not trust company management, only 3% look forward to coming to work every day!

Behavioral Integrity: A Proven Practice for Building Trust

In September 2002, Cornell University professor Dr. Tony Simons published an article, The High Cost of Lost Trust, in the Harvard Business Review. In that article, Simons describes his team’s efforts to examine a specific hypothesis (“Employee commitment drives customer service”) in the US operations of a major hotel chain. They interviewed over 7,000 employees at nearly 80 properties. What they found was that, indeed, employee commitment drives customer service, but, most critically, a leader’s behavioral integrity drives that and more.

Simons’ team defines behavioral integrity as “managers keeping their promises and demonstrating espoused values.” Their research methods and analysis discovered:

  1. When employees believe their bosses have behavioral integrity, their commitment goes up.
  2. As employee commitment goes up, employees willingly demonstrate discretionary effort. Employees are more proactive, more present, and more productive with the application of their discretionary energy.
  3. Employee discretionary effort is visible to and highly valued by customers. Customers respond by staying more frequently, staying longer, eating on property, etc.
  4. Those customer behaviors generate higher profits. Significantly higher profits!

Dr. Simons’ team created an assessment that measured behavioral integrity on a five point scale. Their analysis found that a 1/8 point gain on this scale generated a profit gain of 2.5% of annual revenues . . . which translated into $250K for each hotel! This study made an important link – one that had not been demonstrated before: manager behavior, specifically keeping promises and demonstrating company values, generates hard dollar profits.

Simons’ work continues at The Integrity Dividend with a book, programs, blog, and more.

Sharon Allen, Deloitte’s chairman of the board, notes that, by focusing on talent management and retention strategies, “executives may be able to reduce attrition.” She goes on to state, “Establishing and enforcing a values-based culture will ultimately help cultivate employee trust.

We’ve seen significant positive impact of behavioral integrity in our client’s evolving organizational cultures. If you need help with the creation of a values-aligned workplace, reach out to us.


Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Netflix’ Unique Culture, Beautifully Defined

I’m working with five separate clients right now, helping them clarify values expectations for their organizations. I coach their senior executives to identify the values foundation for all staff – leaders, managers, front line staff, everyone – and define those standards in observable, behavioral terms. If you’ve been reading my posts here, you know that I provide very specific direction for this critically important task. That guidance is important because most senior leaders are enthusiastic and not yet skilled in the task of creating appropriate, behaviorally-defined values for their organization members. Over the last 12 years, I and my culture change co-author colleagues at Blanchard have “cracked the code” on valued behavior definition through a lot of hard work and diligent refinement.

A terrific example of clear values expectations was released into the websphere in 2009 in the form of Netflix CEO Reed Hastings’ terrific 128-slide PowerPoint presentation on Netflix’ “Freedom and Responsibility” culture. If you’ve not seen that presentation and you are interested in high performing, values aligned organizations, you really need to read through it (it’s embedded below).

Netflix has certainly had some significant stumbles recently (2011-2013) but seems to be getting back to their “basics,” now, as described in this document.

I’m surprised when I discover that the senior leaders I’m coaching have usually not seen Hastings’ presentation, as it was celebrated in blog postings around the globe. I share the presentation with my clients not because I think they should “duplicate” the values that obviously work so well for the Netflix business model (and staff and customers!) but to understand how clearly Hastings defines Netflix’ values expectations in tangible, observable terms.

Define the Playing Field

Hastings believes values are the behaviors and skills valued in fellow Netflix employees. The nine specific values, clearly defined, include Judgment, Communication, Impact, Curiosity, Innovation, Courage, Passion, Honesty, and Selflessness.

Hastings boldly states that he expects all Netflix employees to question any actions they deem inconsistent with the organization’s declared values. (That commitment is part of the Courage value.)

Hastings wants a culture that attracts and retains what he calls Stunning Colleagues – stars who are able to responsibly perform amidst the ambiguity of a technology driven, fast-paced market that’s attracting competitors every day.

There is no room for “good performers.” Adequate performance will get an employee – at any level – “cut from the team,” to make room for a star in that role. There is no room for brilliant jerks; if jerks are discovered after Netflix’ thorough hiring process, they are offered a fair severance package . . . and quickly sent packing.

Let the Players Apply their Skills and Commitment on the Defined Field

The Netflix culture does not value process adherence – it values freedom, responsibility, innovation, and self-discipline. It values context, not control – by setting a few rules, high performing, responsible staff can creatively respond to opportunities, recover from the few mistakes they make, and continue the company’s growth and innovation.

For example, Netflix’ stunning colleagues have created a killer iPad application that enables live streaming of hundreds of television shows and movies – at the touch of a button. It is amazing technology that just works.

Hastings creates clear expectations for what a great Netflix corporate citizen looks/acts/sounds like and also maps out the context for those desired behaviors and skills.

There are many more insights to be derived from Reed Hastings’ marvelous foundation of clear values expectations. The key learning for my clients and me is that spending the time to map out exactly how a great citizen will go about accomplishing the organization’s goals will generate fabulous results. Our culture clients have enjoyed increased profits, fast-to-market solutions, talent retention, and employee passion. How will your organization benefit?


Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Top 10%: Deliver Performance AND Values

How can you differentiate your business from the many others that offer similar products and services in your market? How can you earn “provider of choice” status with your customers by being in their “top 10%” of providers? It isn’t about a flashy new marketing campaign or a spin on what your product or service does. It isn’t, in fact, about external communication at all – at least, not at first.

The secret to creating a sustainable business that creates passionate employees who exceed performance standards and consistently wow your customers is embedded in the graphic at left, which we call the “Performance Values Matrix.” This model is the core of Blanchard’s proven, award winning culture change process.

This model comes from Jack Welch, who, while President/CEO of General Electric, was the first corporate senior leader to formally hold leaders and managers in his organization accountable for both performance and values.

The model is a simple X-Y graph with the vertical axis representing PERFORMANCE and the horizontal axis representing the VALUES MATCH. The quadrants represent the four possible combinations of high or low performance and high or low values match.

Starting Point: Clear Expectations

The first step is to ensure that expectations are clearly defined and agreed to by all parties. That means all employees have formal performance plans that outline project, goal, and task expectations and those expectations are agreed to. In addition, it means that values are defined in tangible, behavioral terms, and those expectations are also agreed to.

The best place for staff (leaders, managers, supervisors, employees – everybody) to exist on this model is the upper right quadrant. That means they are meeting or exceeding performance standards and are consistently demonstrating desired valued behaviors. You should wildly praise and recognize the high performance, values aligned players that reside here!

A not-so-good place for staff to reside is the lower left quadrant. If they are here, it means these players fall short of performance expectations and do not demonstrate desired valued behaviors. What should you do with the “low performance/low values match” player? Lovingly set them free. Or, as WD-40 President Gary Ridge says, “Share those employees with your competition!” It is unlikely that time and energy spent to raise skills (to improve performance) and coach to modify behavior (to increase the values match) will pay off in the short run (or long run). It’s best to let these folks go work somewhere else. “Lovingly” set them free because the way you treat staff – those that are leaving and those that are staying – says more about your values than any published statement.

The bottom-right quadrant offers an interesting challenge. What should you do with the values-led players who are unable to perform? Train them, build skills, and even shift their roles to leverage their talents as required. You don’t want to lose the values-match! If they are unable to consistently perform in any role, then you need to lovingly set them free.

The upper left quadrant is where the most damaging players reside. The high performance/low values match players are poison in your organization. They exceed performance expectations (good!) while demonstrating a very different set of values from those you desire (bad!). What must you do with these players? Lovingly set them free. As fast as you can. Their existence in your organization erodes leader integrity and trust among staff and customers.

Accountability for both performance and values can occur only after expectations (for both) are clear and agreed to. It takes intentional effort to build the necessary foundation for applying this model and creating the high performance, values-aligned organization.

Once you have embedded the desired values and are delivering consistent performance, your customers will become a tremendous positive word-of-mouth marketing force for your business.

Client Successes: Profit, Service, Passion

Our culture change clients have enjoyed hard dollar benefits from our proven process, including increased profits, efficiency, product quality, employee engagement, and customer service rankings. They have also enjoyed reduced turnover and reduced conflict across their work environment.

To what extent does your organization hold staff accountable for both performance AND values? Add your thoughts to the comments section below.

How can we help you create a high performance, values aligned culture?


Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Most Teambuilding Isn’t.

This is the time of year when managers and leaders are inspired by the summer weather. They decide that their team needs to do some outdoor bonding and celebrating, so they sign up for a “teambuilding” session. Activities such as paintball, whitewater rafting, ropes courses, simulations, cooking competitions, and the like are common team building exercises. The hope is that the team activities will help improve relationships across team members, increase cooperative interaction, and team productivity.

The reality is that many of these teambuilding programs do not generate long term benefits. How many of you have gone to a teambuilding program yet found that little changed when the team returned to their work environment?

To ensure teams benefit from teambuilding activities, spend time planning exactly what goals you have for the session (“what do you want to accomplish with this activity?”). Find a provider that has proven experience with intentional instructional design and focused facilitation to help embed take-aways, beneficial agreements, and help teams demonstrate desired behaviors back on the job.

Before you engage in teambuilding, consider a more foundational step first. Our research and experience tells us that teams need clarity of purpose, values, goals, and strategy as a foundation for team performance and team member morale. Chartering your team helps align team member skills and effort towards the accomplishment of agree-to goals and targets. In addition,  these clear agreements enable desired norms in how team members work with and treat each other as they  work to accomplish team goals.

Key Elements of a Team Charter

Your team charter formalizes performance expectations and team values, which clarifies what the team is delivering and how they’ll work to deliver those products and/or services. It is a working document that evolves as the team learns how to increase productivity and team member satisfaction over time. The main elements of a team charter include:

  1. Organizational Vision, Purpose, and Values – all teams are “sponsored” by the organization in which they operate. A team must understand the vision, purpose, and values of the company so that it can align team purpose and values with those defined organizational elements.
  2. Team Purpose – the team’s purpose statement identifies what the team does, for whom, and why it is important. A clear purpose provides direction for identifying team goals and the roles needed to accomplish those goals.
  3. Team Values and Norms – Values are the enduring principles that guide team and team member plans, decisions, and actions. Norms are the day-to-day ground rules that clarify appropriate behaviors for team members.
  4. Team Goals and Roles – goals identify the measurable outcomes and timelines that must be delivered upon to ensure team success. Roles define the individual responsibilities required for the successful operation of the team.
  5. Team Practices – this section defines the team’s strategies and processes that ensure the team stays on track to deliver promised outcomes. Practices include communication strategies, decision-making authority, and accountability practices.
  6. Team Resources – these are the tangible materials the team needs to accomplish its goals, including time, budget, people, equipment, training, etc.

Most teams get a goal or project and madly start working on goal accomplishment. Without these clear charter agreements, though, teams experience what Peter Drucker described when he said, “The only things that naturally occur in organizations are anger, frustration, and fear.” If your team would benefit from clear agreements and norms – if conflict, silos, and entitlement inhibit team performance – formalize a team charter.

Does your team have a formal charter? What norms help your team deliver on performance expectations WHILE modeling team values? Add your thoughts in the comments section below.


Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Catch People Doing Things RIGHT.

During a coaching session with one of my culture change clients, the president of the organization told me that he’d recently had an epiphany (we love it when that happens!). Lee said, “I’ve been a manager for 30 years. All that time I thought my job was to manage processes and results. This culture change journey has helped me redefine my job. Today, my job is to manage people’s energy.

Lee and I talked for some time (and continue to do so today) about HOW Lee makes this shift. Today, Lee consciously refines his emphasis, his language, and his behaviors so that his interactions with followers across the company lead them to feel trusted, honored, and respected. He continues to thank them for their contributions to the organization’s success, as well.

Most senior leaders in Western organizations see their jobs like Lee did: managing processes and results. It’s no surprise that senior leaders do that, as they have been trained for decades by their bosses, stakeholders, and even Wall Street to deliver results, no matter what the human costs. This philosophy leads leaders to focus on what people are doing WRONG – to catch them at it (sometimes with a “gotcha” attitude), correct the problem, then move on to find someone else doing something wrong . . . and the cycle continues, day in and day out.

Our view at Blanchard is much different: leaders need to inspire followers with clear vision, formal goals, meaningful work, and a culture of gratitude (and even fun). Leaders need to manage by wandering around, looking for things that are working, and catch people doing things RIGHT – with on-the-spot praising and encouragement.

Two Proven Approaches to Catching People Doing Things Right

  1. Planned Spontaneous Recognition – Bob Lorber, a member of Blanchard’s board of directors, shared this best practice with us. Years ago Bob was impressed by a third-shift supervisor who transformed his team from the worst performing group to the best in less than a year. The supervisor, Sid, clarified performance expectations, monitored performance daily, and frequently praised and encouraged workers to help them stay on track.As performance improved, Sid added this new twist to his communications with his team. Every day while driving in to work, Sid would decide what he was going to look for that day. In his manufacturing environment, it might have been clean & safe work spaces or efficiency or information sharing, etc. Then, as Sid saw that “benefit” being demonstrated that day, he’d spring the “gift” on that team member or the group. It might be pizza for lunch one day or ice cream sundaes or movie tickets . . . whatever. Sid told Bob that he planned what he was going to look for and what he was going to “gift,” but it looked and felt to the team like it was completely spontaneous. Sid’s actions improved performance and commitment on the part of every team member.
  2. Six Pennies – I learned about this mechanism from one of my best bosses, Jerry Nutter. At the time, Jerry was the CEO of a large full-facility YMCA with child care, fitness programs, racquetball, indoor pool, etc. Jerry knew staff were doing great things every day with members – and that he’d miss those things if he was tied to his desk. Each workday morning, Jerry would put six pennies in his right front pants pocket. For an hour, he’d tour around the facility, looking for people doing things right. When he found one, he’d wait for the appropriate moment to pull them aside, praise what he saw, thank them, and move on. In two minutes, he validated their contribution and commitment.As he left, he’d take a penny from his right front pocket and move to his left front pocket.He kept meandering through the facility until he’d delivered at least six praisings in that hour. In the afternoon, Jerry would spend another hour again, praising RIGHT actions, moving pennies from his left to his right pocket. Jerry’s staff (I was one of them) LOVED him – they genuinely felt trusted, respected, and honored.

Your staff do a great number of things right every day. Stop and notice! You will enjoy better performance and better relationships when you catch people doing things right.

How do you ensure that you’re paying attention and validating team members that are doing things right? Add your thoughts in the comments section below!


Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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