Creating KPIs that drive engagement & performance

How to create KPIs that drive engagement and performance

Setting KPIs

“If you can’t measure it, you can’t manage it”. 

Although this is true many companies don’t know what to measure or, if they do, they don’t know how to establish KPIs.

Why is this so important?

KPIs drive behaviour – if you know you are being evaluated against certain metrics then you will adapt how you work and how you perform.  This sounds good, but it can also be highly counter-productive, especially if you don’t know what to measure or measure the wrong thin. The result: bad management, mixed messages, confusion and employees focusing on the wrong thing.

You need to establish and develop your KPIs with care. Have too few and you may have an unbalanced “portfolio” of KPIs, have too many and it becomes a case of “everything is a priority, nothing is a priority”.

KPIs vary for different areas and different roles – but they are all underpinned by one factor: the company’s strategy and operations.  As such your KPIs are the indicator of where the company is headed. But it is also the one area that many companies mismanage as they are not thinking about how a KPI is helping the company to meet its targets.

Goals are not KPIs

A common mistake is to confuse KPIs with goals. The two are not the same.

For example, a company wants to achieve a $100 million of sales – this is often assumed to be the KPI when it is not.  In this example the KPIs there should be about the sales process. The KPIs might be about how many new customers, how many customers visited gave a repeat visitation, how many of those visits ended up in a presentation and how many of those were closed as deals. The KPI has to measure the process. You want the KPI linked to the corporate goal but it is not the goal itself.

When looking at the process you are measuring make sure that the KPIs relate to the corporate goals.  For example, having a KPI of sales reports in time does not drive sales – it only supports the process.  Furthermore every industry has formal KPIs (often found in the job description) and informal KPIs that are not written down. Like incongruent KPIs pulling in different directions, they can leave employees confused and disenchanted.

KPI is about Performance, Not People

KPIs are not about measuring people, they are about the process.  The KPIs are there to measure the performance of the organisation and KPIs are tools that people can use so that they can work not just in the business but also on the business, in other words improve the way the business works and improve its performance. They track the strategically important goals and objectives of the business.

Developing KPIs

It is absolutely critical for managers to develop the KPIs in consultation with the employee.  Developing them in isolation and imposing them on high creates, at best, a lack of buy-in and at worst total disengagement.  People want to succeed, and they want to be involved in how they succeed.

When discussing this you need to talk about three things:

  • What the person is employed for, and
  • What is going to give them satisfaction that will ensure they stay loyal and motivated; and
  • How this relates to the company’s main goals

Once there is a shared and common understanding you need to discuss the KPIs that are most effective and relevant to the processes that affect how they work and perform.  This is not to say that each individual has their own unique set of KPIs, rather that there is an agreed and understood portfolio of KPIs that complement and reinforce each other, whilst aligning the individual and team(s).

Monitoring KPIs

KPIs need constant monitoring to have relevance.  If they are measured, for example, only on a quarterly basis then it becomes like an exam.  It is viewed as being extraneous their job, rather than intrinsic. This creates a feeling of irrelevance, a lack of commitment to the KPIs and people having to be forced to comply – creating ineffective KPIs and reduced performance.

So what have you done and what are you going to do with your KPIs?  Talk to your people. Be clear on your goals, understand the key processes to be measured, and make the KPIs relevant, meaningful, measurable and review.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

9 Ways to Accelerate Customer Loyalty

9 questions to ask to help you keep clients loyal – now and in the future.

 

Customer LoyaltyLast week we looked at the difference between client satisfaction and client loyalty, and the mistake commonly made by leaders in the belief that client satisfaction and client loyalty are positively correlated i.e. that higher the level of client satisfaction the higher the level of client loyalty.

Research has shown that the more value you deliver, the more satisfied your clients will be. The more satisfied they are, the more likely they will be to stay loyal to your firm and refer other clients to you.  There is good logic here, but it makes an assumption which is often not explicit or valid in most instances.

Have you ever had a client for whom you have delivered value, for which they are highly satisfied – and who have then awarded a deal to someone else for any reason?  Most people have had this experience.  We have found that there is a disconnect between our delivering value and our realising client loyalty.

The fault is ours, not theirs.

If we are to keep our clients’ loyalty we need to focus on our clients’ perception of your value and our clients’ perception of your differentiation.  The flawed assumption that is often made is that we look at the value delivered, and how we differentiate ourselves, from our perspective not that of the client.

If you want to keep your clients loyal, you need the answers to nine questions—some of which are focused on the clients’ perception of your value, and others on the clients’ perception of your differentiation.

Five Questions for Valuevalue men

Question #1: What value do clients perceive regarding our general category of company and services?

Perhaps your clients value that you are a diversified marketing company, not just a website firm. Or, that you are a specialist in XYZ, not a generalist. Perhaps they value that you are a family business versus a corporation. How clients perceive your type and category of company will resonate with many buyers.

Question #2: What is the value clients perceive regarding us as a firm?

You might find that clients value your innovation and don’t care as much that you’re periodically unresponsive. Or, that they value your client service excellence, but your technical reputation doesn’t matter quite as much. Maybe there are areas they don’t value or where you are falling down in your delivery.  Clients are not interested in what you do, rather they are interested in the value that you can help them realise.  Be clear on what value they see from your business, and where this value is created, and when, and for how long it lasts.

Question #3: What value do clients perceive regarding the specific services we offer?

This allows you to know what’s working for clients, which services you offer that are the strongest, and where you deliver the best value.

You might also learn that your clients don’t even know you offer particular services. Familiarity, in this case, breeds contempt – one side assuming the other knows, and the other not knowing because they’ve never been told.

Question #4: What value do clients perceive in solving the specific problems they currently have?

We all have problems, but not all problems are created equally. If you know the key priorities for a client, then you can help the client tackle them.  Don’t assume that the client always knows what the problem is – by framing the problem appropriately you can help them to see problems clearly, or to see problems that they never realised they had, or that they had failed to anticipate.  This can be exceptionally valuable to a client.

Question #5: What value do clients perceive they might get if they could solve certain problems or accomplish certain things that they aren’t focusing on right now or might not see as priorities?

In doing this we help clients to create a better future or one that they may not have even known was possible. By helping clients solve problems they didn’t know they could solve, and making improvements they didn’t know they could make, service providers score higher on satisfaction (that, as we mentioned, is an indicator of future loyalty).

differentiationFour Questions on Differentiation

Question #6: What different options do the clients perceive they have regarding different categories of companies that can help solve problems or achieve goals?

Sometimes it doesn’t matter as much which specific companies your client might view as what the other options are that they might be considering.  As such you need to know the types and categories of companies offering services in your region. For example, as a management training company, with a core set of services in classroom training, you need to know if your buyers are considering e‐learning providers—and how to position yourself against them

Question #7: What different options do clients perceive they have regarding specific companies that can help them solve problems?

You need to know your distinctions, advantages, and disadvantages when compared with them. This is from the client’s perspective – not yours.

Question #8: What different options do clients perceive they have regarding specific services available to help them solve problems?

How do clients perceive they can solve their problems?  Can you create options around what they need, rather than what you, to help them think about how they could use you – rather than should they use you!

Question #9: What different options do clients perceive they have regarding other ways to solve problems, such as internal staff?

Competitors are not always the biggest source of competition.  Competition also comes from the option of the client doing it themselves, not doing it at all, changing the scope and extent of the project, or giving preference (and thus some or the entire allocated budget) to other internally competing projects and priorities.

Next Steps

Go through these questions with your clients.  Get it from the horse’s mouth.  Compare this with how you see it, where are the biggest gaps, and which areas are the priority for addressing.

Thanks to Mike Schultz of Wellesley Hills Group whose work provided the basis for much of this article.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Engaging & Retaining Staff – Part 3

12 Ways to Engage & Retain Staff, Image (c) People Insight

In the first blog in this series we looked at why employee engagement is so important and provided an overview of Gallup’s findings from its extensive research.  This was summarised in the 12 ways to engage employees.

In the second blog we examined the first 3 elements in further detail.  This included:

  1. I know what is expected of me at work.
  2. I have the right materials and equipment I need to do my work right.
  3. At work, I have the opportunity to do what I do best every day.

In this blog we continue with the next 3 elements provided by Gallup:

4. In the last seven days, I have received recognition or praise for doing good work.

5. My supervisor, or someone at work, seems to care about me as a person.

6. There is someone at work who encourages my development.

So let’s look at each of these in turn.

Fourth Element – Recognition & Praise

What does it mean?

Great managers consistently give their direct reports prompt feedback and positive recognition, not just at the annual review when the feedback is often too little, too late and lacks context.  Recognition is not just about financial benefits, but includes on-going recognition and constructive feedback.

What is the evidence?

Employees are twice as likely to say they will leave their current company in the next year if they do not receive adequate recognition. Additionally, employees who report not receiving adequate recognition/feedback are more likely to feel as though they are underpaid.  Gallup research indicates companies are able to increase productivity and revenue when employees report receiving prompt feedback and positive recognition.

What should we do?

  1. Provide regular, appropriate and constructive feedback to your reports.  Make sure it is timely so that is relevant and applicable to the context of the situation for which the feedback is being provided.  Remember the effect of praise is short-lived – so look to provide it properly and appropriately every week.
  2. Don’t assume that your reports know that you appreciate their work – they can’t read your mind, so tell them!
  3. Remember people gravitate towards positive reinforcement and positive words.  You attract positive people and encourage them to be positive in turn creating a positive spiral effect.  This is especially true as, in the perception of employees generally, praise is painfully absent from most companies and the workgroups within them.
  4. Positive changes also happen to people who give the praise
  5. Provide objective examples with praise; make it clear why and for what it is being given to both the recipient and others.
  6. Find the forms of feedback that mean the most to each of your employees and use them – it makes the recognition and its positive effects more powerful.

Fifth Element – Someone at Work Cares About Me as a Person

What does it mean?

Great managers take an authentic and personal interest in the employees they manage, and their employees recognise it as such.

What is the evidence?

Companies can experience 22-to-37% higher turnover rates when employees believe their manager treats them as just a number.  Gallup research has continually showed a direct correlation between employees feeling as though they are not cared about and employee resignations.

When our emotions kick in the connection is personal, so people will treat each other differently when there is a personal connection. If people feel there is a lack of a personal connection, then the employer is seen as unfair and uncaring.  Staff are more motivated by the emotional need to support their colleagues, than the cognitive appeal of financial rewards.

What should we do?

  1. Limit giving orders and using authority as they have limits as to how well they works (this is especially true of new managers – see this article for more);
  2. Help your employees to engage with both you and their peers.
  3. Provide emotional support.  The greater this is, the greater the team work – with higher levels of trust, robust personal networks, vibrant communities, shared understandings and a sense of equitable participation.  This supports collaboration, communication, commitment, ready access to knowledge and talents, and coherent organisational behaviour – drawing individuals into a group.

Sixth Element – Someone at Work Encourages My Development

What does it mean?

It’s all about serving people well and respecting people for who they are. Great managers actively encourage the development of their direct reports, they look to help employees improve and grow beyond their existing roles and them as their manager.

What is the evidence?

Nearly 40% of employees – that is 2 in every 5 people! – believe that no-one in their company is encouraging their professional development. Plus, statistics indicate employees have an unwritten workplace expectation of having a mentor to help them in their development.  Gallup research indicates employee on-the-job engagement is higher when employees have someone in the company actively encouraging their development.

What should we do?

  1. Use mentors and coaches (internal or external) to help people develop the skills they need to maintain them in new roles, to help them develop the skills they need to get to the next level, whilst helping them achieve traction in their work and associated results.  NB: frequently managers need coaching support most, often they are promoted into a managerial role based on their technical capabilities which will not sustain them in their new role.  Rather, they need to develop the necessary managerial, business and leadership skills to enable them to perform – this, ironically, also helps to retain key managers who are often the ‘engine room’ of the business.
  2. Provide practical, relevant and timely guidance through personal interaction.
  3. Provide the necessary role models help people to see and discover how accomplishments are within reach.

Which of these 3 elements have you used and to what effect?  If you were to rank them which would you use first?  Would you use them with everyone, some of them or with no-one?

Share your ideas, and share the wealth.

In the next blog we look at the next three elements including:

7. At work, my opinions seem to count.
8. The mission or purpose of my company makes me feel my job is important.
9. My associates or fellow employees are committed to doing quality work.

Until then share your thoughts and ideas here, and feel free to share this blog and articles with any colleagues, clients or friends you feel may find this of value.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Engaging & Retaining Staff – Part 2


12 Ways to Engage & Retain Staff

In our previous blog, we looked at why employee engagement is so important and provided an overview of Gallup’s findings from its extensive research.  This was summarised in the following 12 ways to engage employees.  In this blog we look in further detail at the first three ways.

  1. I know what is expected of me at work.
  2. I have the right materials and equipment I need to do my work right.
  3. At work, I have the opportunity to do what I do best every day.

Remember when you first started your current job.  The initial excitement, interest and challenges create a honeymoon period when you are highly engaged.  Like any relationship you cannot maintain the intensity of this, and after six months you begin to become disengaged.  How this happens varies for each of the 12 elements of engagement.  The Gallup Organisation found in Australia that after six months in a new job engagement drops by an average of 62%.  This makes our ability to retain and engage people a key concern, and our need to understand the 12 elements a priority.

In looking at each of these elements we look at three parts:

  1. What does each element mean?
  2. What is the evidence for this?
  3. What should we do to maintain high engagement for each element?

This helps us to identify where we may be weak, identify the priorities, and what actions to utilise from an a la carte menu of actions.

First Element – Knowing What is Expected at Work

What does it mean?

This is about establishing job clarity for your reports. To be a great manager you need to be able to effectively define and communicate what is expected of your direct reports.

What is the evidence?

At best, 50% of employees strongly agree they know exactly what is expected of them on the job – that means the other 50% do not.  The Gallup research indicated that when employees know what is expected of them, their productivity increases anywhere from 5-to-10% and there is a 10-to-20% reduction in on-the-job accidents occurs.

What should we do?

  1. Vision – make sure your employees know where you are going – be crystal clear and consistent in communicating what your vision for the business is.  This provides clarity of purpose for employees in what they do, and makes it easier for them to follow you. You don’t want “I’d like to follow you, but I don’t know where you are going”.
  2. Establish job clarity to combine individual efforts for the greatest cumulative result. This is more than a job description it includes for each employee:
  • Knowing what is expected;
  • Detailed understanding of their role and
  • How it fits in with what everyone else does

3. Focus on outcome-based rewards to ensure they are focused on achievement rather than ‘doing’.  Make sure that staff are not being incentivized to do routine things.

4. A good question to ask is: “I’d like you to introduce yourself, tell us your job, and how doing your job well increases the profits of your company?”. In doing this look at individual and group results, and understand how they drive the achievement of outcomes.

5. Communicate – wrap your conversations with employees around the key aspects of the business’ mission, this gives them insight into how what they do contributes to the bigger picture.

Second Element – Materials & Equipment                  

What does it mean?

A good manager ensures that their reports have the tools and resources they need to get the job done in expert fashion.

What is the evidence?

Only 33% of employees strongly agree they have been given the tools and resources to expertly get their job done – that means 67% have not.  Gallup research indicates employees are more productive and more engaged at work when they have the tools and resources to perform.

The importance of this is best illustrated by when employees do not have the materials and equipment they need to do their work, this increases their frustration and creates anger with the company for placing them in this situation.  In Australia, 71% of employers providing tools and resources such as career management programs say it has improved their ability to attract and retain employees.

What should we do?

  1. Ensure you not only have the right equipment and materials, but that you make regular small improvements in them, as well as modest changes to the process.  These have a multiplicative effect over time.
  2. Giving employees the right materials, equipment and process helps to reduce stress.  People want to do their jobs well, and to be productive – so help them be so.

Improvements in materials and equipment also include higher customer engagement and higher productivity.  The opportunity for effective and efficient feedback from staff on what can be done to improve things also helps to address this area and engage staff.

Third Element – The Opportunity to Do What I Do Best

What does it mean?

You need to be able to match the right person to the right job, or the right job to the right person.  Key questions to consider include:

  • Who would excel in this assignment?
  • What makes someone succeed where others fail?
  • Is it innate, is it learnt, or is it through effort?
  • Can excellence in a certain role be learned?
  • How fast and much can people change?
  • Can people be moulded to fit the needs of the role or not?

What is the evidence?

67% of employees failed to strongly agree they have been given the opportunity to perform their jobs to the best of their ability.  Gallup research indicates when businesses provide employees the opportunities to maximize their natural talents, employee engagement at work increases 33% resulting in significant gains in a company’s productivity.

What should we do?

  1. Don’t believe the notion about human potential that an employee can do anything if he puts his mind to it, can envision it, and tries hard enough or cares enough.  Not true.  (I may want to be a basketball player, but at 5’7″ “you can’t coach height”). Where there may be meaningful differences then remember these are not just opportunities to advance business interests, but also to improve staff’s careers.
  2. Talk with your employees in a positive, passionate way:
  • “So what are your gifts?”
  • “Where are you most happy?”
  • “Where do you think you could be utilised where your skills could be used best? Why?”

3. Establish where your people are in the “flow” – where the employee enjoys the work itself rather than enduring the work just to earn the pay, or to gain an opportunity to be promoted to a better, more fulfilling job.

4. Look at how you can mould the job for each employee around the way they work most naturally and to maximise the optimal experiences that provide “flow” and drive individual and team outcomes.

5. Managers of the best workgroups spend a disproportionate amount of time with their high producers, matching talents to tasks and emphasize individual strengths over seniority in making personnel decisions.

6. Regular staff reviews (every two to three months) on an one-to-one basis, these should include questions such as:

  • What do you do best?
  • What do you like about your job?
  • Where do you think you have greatest impact? etcetera

7. Creating an effective team is about taking the team’s collective abilities and utilizing them to achieve the results and outcomes, not how well individuals perform.

Which of these 3 elements have you used and to what effect?  If you were to rank them which would you use first?  Would you use them with everyone, some of them or with no-one?

Share your ideas, and share the wealth.

In the next blog we look at the next three elements including:

4. In the last seven days, I have received recognition or praise for doing good work.

5. My supervisor, or someone at work, seems to care about me as a person.

6. There is someone at work who encourages my development.

Until then share your thoughts and ideas here, and feel free to share this blog and articles with any colleagues, clients or friends you feel may find this of value.

Share the knowledge, share the wealth!

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5 Strategies for Hard Times

5 Things to Do When Times Are Tough

When the business environment is becoming harder, here are 5 strategies to help you focus your effort, time, resources and investment.

tough times ahead Every few years the business cycle turns down and things get tough. For good business people, this is a sign to get going because with competitors struggling, it is a great time to build your business. There are two key areas you need to focus on, your survival and your growth. This paper outlines just five things you must do to make the best out of the general business downturn. Follow the suggestions made and you will not only survive, you will prosper.

1. CASH FLOW

Cash is the lifeblood of every business.  You need to get as much cash as you can into the business and protect it once you have it.

  • Where do you have cash stored? It may be with your customers who are slow in paying you. It may be in overheads that you don’t need. It may be in assets that you don’t really need to own.
  • If you had to get some money within 30 days, how much could you get in if you really put all your effort into it?
  • Look at the cash going out of your business. Can you stop spending in any areas?  Can you slow down the speed at which it goes out?

2. RETAIN YOUR PEOPLE

In most businesses that employ people you have a third of your staff that you are lucky to have, a third you would do be better without and the remaining third are somewhere in-between. In tough times you must protect your best people, the top two-thirds (maybe you need to get rid of the bottom third?).

  • How can you make sure you keep the ones you need?
  • Do they have contracts?
  • Do you reward them?
  • Do you tell them how much you appreciate their efforts?
  • Is working with you fun?

3. RETAIN YOUR CUSTOMERS

Keeping your best customers is much like keeping your best employees. Work out who the top two-thirds are and spend time on them.

  • Find out what problems they are having and what you can do to help them.
  • Keep in close contact with them on what you are doing for them.
  • Thank them for their business; ask if they can give more business.
  • Do they have any friends who they can refer you to?
  • Are you linking your best people with your best customers?
  • How can you help your customer increase their business?

4. IMPROVE YOUR PROFIT

Cash and profit are closely related. Around 20-30% of your operational expenses are due to waste in your business. You could remove that waste and the savings become instant profit (and probably cash).

  • Can you reduce your overheads? What about your people and material costs?
  • If by law you had to double your profit within three months what would you do? Why not just do it anyway?
  • Do you really know what profit you make each year? What about each month? What about each day?
  • Where do you make your profit? Did you know that 20% of your customers and 20% of your products (and services) generates 80% of your profit? Why not just focus on these customers and products for the next six months?

5. MAINTAIN YOUR ENERGY

When you are energized your business is energized. You must develop and guard your energy levels.

  • Are you fit?
  • Do you love what you do?
  • Are the people you work with fun to be with or are they energy vampires?
  • Do you work too hard?
  • Do you make time for yourself?

Time management is the biggest thing to address in tough times. 20% of what you do generates 80% of the benefit you are to your business (and family) so what are you doing for the rest of the time? Maybe if you stop doing some of the low-value stuff, you will boost your energy levels.

Getting your business under control is critical in tough times. There is no point in growing a business that does not have good cash flow, profit or leadership. Get these five things largely right and your business will grow. Every leader and every business is different, so you need to decide where to start. All five strategies are equally important and the need for discipline and accountability for them lies with everyone – the responsibility is yours, it is up to you to make it happen.

Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

5 Steps for Effectively Delegating & Managing Work

A 5-step process by which to effectively delegate and manage delegated work.

DelegateDelegating effectively allows managers and leaders to free up time; ensure the work is down to the right person at the right level and on-time; helps to develop people and their capabilities, and allows the managers and leaders to focus on what is important – not just what is urgent.

Creating the Conditions & Capabilities for Delegation

For effective delegation you need to have:

  1. A culture which supports and allows delegation to occur
  2. The desire and the ability to delegate
  3. People with the necessary abilities and attitudes that you can delegate to.

If you lack any one of these it makes delegation difficult.  As such be clear as to where you are on these factors and what you need to do to address them if necessary.  Yet even if these conditions are in place many managers and leaders find it difficult to delegate.  Common reasons for this include:

  • Short-term thinking – it would be quicker to do it myself
  • Perfectionist thinking – I can do it better myself
  • Requires an investment in training/mentoring of others – I don’t have anyone I can trust to delegate it to
  • I don’t know how to delegate

The key to enabling others to delegate is to understand what delegation entails.   I define delegation as:

A task, for which a nominated individual(s) is given specific responsibility, to complete in part or full, by a given time to produce an expected outcome or result, and for which you will receive feedback on.

The 5 Step Delegation Process

  1. Identify the Task – be clear on what the actual task is that you are asking someone to complete.  In doing this put a clear frame around it – what does it include and what does it exclude.  Providing a clear description and understanding of this is critical.
  2. Nominate the Individual(s) – Identify the person(s) who will be involved in the completion of the task.  Be clear as to why you want them to do it (is it for personal development reasons, part of what they need to be able to do to gain promotion etcetera?), and make sure they understand this.

    Delegation Process
    The 5-Step Delegation Process
  3. Define the Responsibility – when discussing it with the nominee(s) ask them to summarize what they have understood that you want them to do – this will quickly highlight any discrepancies or misunderstandings before they can become problematic.  Check that they are prepared for this responsibility and are committed to completing it within the scope and timeframes that you have determined.  You also need them to be clear on your expectations as regards their completing this task and the associated results and outcomes.
  4. Completion – do you want them to complete the task in full, or only in part, before they report back to you on progress made.  If it is an area in which they have little experience, or you have a low level of trust in their ability to do so, then get them to complete the first part before reporting back to you.  This gives you a checkpoint to ascertain how they are progressing, what further guidance is necessary, and if they can be left to their own devices to complete the task.
  5. Review – establish regular times for reviewing their progress.  If you are uncertain of their capabilities then you may have multiple review points during the work on the task, or you may ask them to report back once it has been completed if you have high confidence in them.  Reviews should be short and you must ensure that the responsibility for the work stays with the nominee(s), otherwise you will find the work delegated back to you!

By breaking the delegation process into these 5 simple steps it makes it easier for you to delegate, for those delegated to understand what they need to do and what is expected of them, and for the work to be done in a controlled manner which allows people to grow and develop without being micro-managed.  Use this with your people and see how much time and effort you free up for yourself, and how your people work more effectively.

We look further at delegation in the following article, How To Manage Those Delegated To.

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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.

Do You REALLY have a Leadership Team?

The differences and the impacts of leadership by a team and by committees.

Teams or Committees?

Many CEOs and senior leaders in companies with which I have worked with often believe, in all sincerity, that they have a leadership team or executive team which works together to help focus and drives the business.

This, in my experience, is rarely the case. More often than it is not a leadership or executive team, but a committee.  This is true for all levels of the business but becomes increasingly more frequent the further you go up the hierarchy.

It is important to understand whether you have a leadership team or a leadership committee?  The impact of each is considerable and quite different.  Many problems that you may be experiencing with your leadership team have, at their root, the fact that the leadership team is actually a leadership committee.

Let me explain by looking at teams and committees in turn:

Teams

For the purpose of this article, I define a team as a group of individuals who are working together, towards a common goal or goals, in which they will either succeed or fail to do so together.  There is a strong common purpose, common understanding and real alignment to which all members of the team are committed.

A team that is well-aligned and works well together only does so because there is a high level of trust.  As such the team sets its own goals, and all the members share resources, information, and insights. There is open and frank communication between the members, with members, prepared to challenge each other in order to resolve issues and achieve the desired outcomes. Honesty and candor underpin the team allowing alternatives to be discussed and decisions are taken only after healthy and robust debate.

Committees

Here a group of people come together because of their title or role or function (and in a role as a representative of a given area or function) and agree to work together as long as it is individually beneficial, but at any time they can withhold information, resources, or not comply; also they can be rewarded differentially i.e. I win, you lose.  The individuals participate rather than promising an outcome or a result.

There is a lack of trust and there is no common purpose or any alignment, or it is very weak if there is any.  The focus of the committee tends not to be on achieving the outcomes, but on tasks and following process. Political battles and turf wars break out as committee members jockey for position.  They can withhold resources and information from others in doing so, and people will work or collaborate with others only so far as doing so helps their individual interests.  In a committee, people can win at the expense of the others. This means decisions are made on a sub-optimal basis and, although they can advance one area’s interests, may do so even though it causes damage to the business itself.

Which Do You Have – Teams or Committees?

So how do you know which you have?  Chance is that you probably already have a pretty good idea, but sometimes the group may be in a “gray area”.  In these instances, I suggest you apply the five criteria:

Andrew Cooke’s Five Golden Keys for Evaluating Groups

Look at the questions in the following areas.  If the answers tend to favor the group over the individual you have a team, if it is the individual over the group then you have a committee.

  1. Individual and Group Intention – how would you describe the individual intentions for each group member and the group overall?  Are they prepared to put the interest of others ahead of their own in advancing the group’s interests?  Are the group’s interests shared or do they vary from each individual?
  2. Effectiveness – is the group and the members focused on doing the right things?  Are there a clearly shared and understood set of priorities and outcomes? Is the group delivering progress towards the defined outcomes, or is progress being achieved in a multiple and conflicting directions against outcomes which may or may not be those which were defined initially? Are members participating or working to deliver outcomes.
  3. Communication –what kind of discussions and debate is there between group members?  Do they focus on the issue at hand or the personalities involved?  How well do they share with others what they are doing and why?  Do they have a shared and common understanding which they can consistently and clearly articulate?
  4. Relationships  – are they cooperative and collaborative, or is it a case of acting in the individual’s self-interest?  Is the nature of the relationship long-term, strategic and aligned; or are the relationships short-term and transactional in their focus?
  5. Power – is power perceived by the group and its members to be vested in the group itself, and thus all members are subordinate to the group; or is it perceived to be vested in certain individuals for who the group’s interests are subordinate to theirs?

Do you have a leadership team or a leadership committee?  Think carefully before you answer.  If your team is exhibiting signs of dysfunction then it is likely that you have a group that is a committee or has strong leanings to some of the characteristics of a committee than a team.

Consider one of the dysfunctional teams you either have been on or are a part of now.  Is your team a committee in disguise as a team?  If so, can you apply this distinction to diagnose the problem and get your team on track?

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