How to Hire for Attitude, Not Just Aptitude

How attitude is a good predictor of prospective employee success, and how you can identify those with the right attitude for your business.

The top challenge for CEOs according to a survey from the Conference Board (January 2013) is Human Capital – the ability to develop and acquire the right people, with the right skills needed to take the business to the next level.  But skills alone are not enough.

“Hire for Attitude, Train for Aptitude”

This is an old mantra which, if ignored, can be costly.  Companies I have worked with have found that recruiting people with the right skills can be costly if they do not have the right ‘attitude’, where there is a lack of ‘fit’.  This is reflected in a study by Leadership IQ of over 20,000 new hires over 3 years which found that 46% of the people about to be hired will fail within the first 18 months on the job. And they won’t fail for lack of skills but rather for lack of attitude.

Top 5 Reasons for Why New Hires Failed

The following are the top areas of failure (i.e., were terminated, left under pressure, received disciplinary action or significantly negative performance reviews):

  • Coachability (26%): the lack of ability to accept and implement feedback from bosses, colleagues, customers and others.
  • Emotional Intelligence (23%): the lack of ability to understand and manage one’s own emotions, and accurately assess others’ emotions.
  • Motivation (17%): insufficient drive to achieve one’s full potential and excel in the job.
  • Temperament (15%): attitude and personality not suited to the particular job and work environment.
  • Technical Competence (11%): functional or technical skills required to do the job.

The key point from this is that when new hires fail, and 46% of them will, 89% of the time it’s because of attitude and only 11% of the time because of skill.

As such, the key predictor of a new hire’s success or failure is their attitude, not their skills.  As such we need to be clear on what attitude we are hiring for. To do this requires two steps:

  • Define the Specific Attitudes – what are the attitudes that make your business different from the rest.  This is both in terms of what is good (which you want) and what is bad (which you want to avoid).
  • Adapting the Hiring & Interviewing Process – you need to make sure that you focus on these attitudes, so adapt how you do this as appropriate.

How Do We Do This?

Define the Specific Attitudes

Attitudes in themselves are not visible or tangible.  Where they are made apparent is in people’s behaviors.  How people behave is an active display of their attitudes.  Their behavior should also be a reflection of the business’ core values which provides guidance to people in the business.  A good example of how the core values are made tangible, and the expected behavior (and hence attitudes) is shown below.

The US Marine Corp

The US Marine Corps has Core Values of Honor, Courage, and Commitment.  The concept of these core values runs throughout all aspects of Marine life, beginning in recruit training and continuing into combat. These “warrior ethos” provide guidance to Marines in difficult ethics situations and as a reminder to provide good order and discipline. These values are defined as:

  • Honor – integrity, responsibility and accountability.
  • Courage – do the right thing, in the right way, for the right reasons.
  • Commitment – devotion to the Corps and my fellow Marines.

Adapting the Hiring & Interviewing Process

Too often, when interviewing, we focus on prospective employees’ technical skills and competencies.  Why?  They are the easiest to assess but, as we have seen, they are a very poor predictor of the success or failure of a new employee.

When you look at jobs being advertised the experience, skills, and qualification that are detailed it can be seen that the business advertising the position has the expectation that a perfect candidate will apply.  This is about as far from reality as you can get.  Realistically, there is no ‘perfect candidate’ and, as such, there can only be attitudes that are right for your business – they will never be perfect.

Tests for Finding the ‘Right’ Attitudes

  • High Performers’ Test – what are the distinguishing attitudinal characteristics of your top performers.  List up to 10 responses that reflect your business.  For example:
    • They own the problem.
    • They always see problems as opportunities.
    • They are great listeners and communicators.
    • Etcetera.
  • Low Performers’ Test – what are the distinguishing attitudinal characteristics of your low performers.  List up to 10 responses that reflect your business.  These are not just the opposite of the attitudinal characteristics that make a high performer. For example:
    • They avoid responsibility and are quick to blame.
    • They focus on themselves rather than others.
    • They do the bare minimum work required.
    • Etcetera.

Once you’ve got your two lists, conduct a quick assessment to make sure every point is on target. This can be done by asking yourself the following two questions about each attitude listed:

  • How does this attitude add value or competitive advantage to this organization? (If the attitude brings no benefit to the organization, it doesn’t belong on the list).
  • Who cares about this attitude? (If the attitude doesn’t bring benefit to your customers, it doesn’t belong on the list)

Doing this provides insight into both what you want and what you don’t want in the terms of attitudes and the associated behaviors.  It then helps you to prepare for the interview by focusing on how they respond to questions around both these areas.  However, how the questions are phrased is just as important as what the question is.  You need to develop the question with the kind of response that you are looking for in mind.  But that is a separate article.

In summary, be clear on what values, attitudes and behaviors you want in your business, and which you want your new employees to exemplify in what they do and how they do it.  Get clarity by distinguishing the attitudinal characteristics of both your top and low performers – this helps you to identify what you want from a potential employee, and what you don’t want.  Around this then adapt your interview and hiring process to ask the kind of questions that will help you elicit answers which will help you determine the prospective employee’s values, attitudes, and behaviors.  Take this into account when you look at their technical skills, as it is their attitude that is a predictor of their skills – not their technical skills and competencies.

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Share your thoughts and ideas here, or email me at andrew.cooke@business-gps.com.au

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Which Would You Rather Be – Efficient or Effective?

Which would you rather be – efficient or effective?

by Andrew Cooke, Growth & Profit Solutions

Efficiency is doing things right; Effectiveness is doing the right things.The focus for many businesses today is on the short-run, getting more for their dollar and squeezing more out of their resources.  Productivity is the name of the game.  Although this is laudable it has focused businesses on the short-term and distracted them from the long-term.

Efficiency & Effectiveness

Efficiency and Effectiveness are two competing yet complementary approaches to business.  For the purpose of this article these are defined as:

Efficiency

This is ‘doing things right’ and concentrates on tactics focusing on achieving short-term results.  It means doing things better and quicker.

Effectiveness

This is ‘doing the right things’ which is critical to the success or survival of any organisation. Strategy is the key, not just any strategy, but one that is well constructed and then executed.

How these two factors interact impact the business and an overview of these interactions can be seen in the Efficiency/Effectiveness matrix below.

Efficiency/Effectiveness Matrix Efficient vs Effective Matrix

THRIVE: Highly Effective & Highly Efficient

Businesses that pursue the right strategy efficiently thrive. They can meet strategic targets earlier than anticipated, and can go on to meet more challenging strategic targets, so as to sustain their ability to thrive.

SURVIVE: Highly Effective & Inefficient

Many businesses ‘survive’, they show potential but never attain the growth that they should be capable of.  This can be due poor management or inefficient practices.

DIE SLOWLY: Ineffective & Inefficient

The business lacks a clear vision of what it is trying to achieve, and so lacks the right strategies or has weak strategies on which to execute. The lack of clear strategies means that the short-term plans and tactics are lacking.  As such the business delivers poor results for several years and are in a state of steady decline before the business eventually ‘dies’.

DIE QUICKLY: Ineffective & Highly Efficient

Here the business is executing very well, but on the wrong strategies which drive it into a state of rapid decline.   The business leaders are not learning from their mistakes, or are not aligned with the market’s realities, and by doing so negatively compound the effects of their wrong strategies.
What Do You Do Next?

For businesses to thrive they need to get both their efficiencies (tactics) and effectiveness (strategies) aligned – have the right direction and the right actions to help you bridge the gap between where you are now and where you want to be.  Look at what you are doing and where you are going  – review your assumptions, get an objective perspective, and continually review and improve to reflect the realities  of your business, marketplace and the business environment.

So what are you going to do? And will it take you in the right direction? And are you effective and efficient in what you do?

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The Real Costs of Poor Management & Leadership

The Cost of Management & Leadership Shortfalls

by  Andrew Cooke, Growth & Profit Solutions

The costs and risks associated with having weak managers and leaders are often overlooked.  What does it mean to you?  How can you overcome it?  And what are the benefits of doing so?

A recent report from the UK’s Department for Business, Innovation & Skills Leadership and Management Network Group (LMNG), showed the UK’s economy has been negatively impacted by a lack of training and support for new managers.  Across 18 management practices by country the UK ranked 6th, whilst Australia ranked 9th – behind France and just ahead of Mexico.  This strongly suggests that the findings for the UK are equally applicable to the Australia and that there is a stronger sense of urgency.

John Hayes MP, UK Minister of State for Further Education, Skills, and Lifelong Learning, suggests that effective leadership is what makes the difference for successful, innovative companies. “Strong leadership and management is a key factor in fostering innovation, unlocking the potential of the workforce and ensuring organisations have the right strategies to drive productivity and growth.”

However, in the UK the research shows that effective management is the exception rather than the rule.

Too many of our organisations, both private and public, are failing to achieve their full potential: managerial shortcomings and a lack of strategic thinking are holding them back. Overcoming these weaknesses and improving our leadership and management capability is fundamental to creating a culture where more organisations have the ambition, confidence, resilience and skills to respond to the current economic challenges and compete successfully both nationally and globally.”

By providing more comprehensive management training and development for budding leaders, companies can gain the edge over competitor firms.

Key Findings of the UK Research:

  • Ineffective management is estimated to be costing UK businesses over £19billion per year in lost working hours.
  • 43% of UK managers rate their own line manager as ineffective – and only one in five are qualified.
  • Nearly three quarters of organisations in England reported a deficit of management and leadership skills in 2012, contributing to the productivity gap with countries like the US, Germany and Japan.
  • Incompetence or bad management of company directors causes 56 % of corporate failures

Quite simply, improving leadership and management capability is an issue that no organisation wishing to achieve long-term success can afford to ignore. There is no question that good leadership and management can have a truly significant impact on organisational performance, both in the immediate and longer term.

  • Best-practice management development can result in a 23% increase in organisational performance.
  • Effective management can significantly improve levels of employee engagement.
  • A single point improvement in management practices (rated on a five-point scale) is associated with the same increase in output as a 25% increase in the labour force or a 65% increase in invested capital.

Business’ long-term success is dependent on developing these management and leadership skills, these  are crucial to ensuring high performance working and business success. This is especially true as more new managers and leaders will be needed over the next decade as the number of experienced baby-boomer managers and leaders who are retiring increases.

Why are businesses underperforming when it comes to developing their talent pipeline in management and leadership?  There are a number of reasons including relatively low levels of training, shortages of key skills, the failure to apply skills strategically, and employer concern about the relevance of training provision, have also been identified as potential reasons. Other factors include difficulties in recruiting graduates with the right skills, particularly for small and medium sized companies; a perception that leadership and management skills are something you “pick up” on the job; and lack of clarity about the specific leadership and management skills and behaviours managers need to display.

Improving our leadership and management capability makes sound business sense. Helping managers at all levels to develop the right skills and behaviours will ensure organisations have the ability to adapt, innovate and evolve, and seize the growth opportunities that lie ahead.

So what are you going to do?

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How Middle-Management is at Risk

Why middle-management is essential for business survival and the risks you run of if you lose or alienate them.

The Challenges of Middle ManagementMiddle management.  Often described as the ‘backbone’ of the company, they provide the continuity across the business and the key people for getting things done; communicating and resolving problems up, down and across the line; translating strategy into action; leading key operational areas; have considerable expertise and experience within the business; providing linkages between senior executives and front-line staff; and are implementing and responding to change.

As such, middle management is crucial to the on-going success and survival of the business.  Senior executives are starting to appreciate their role and the impact of their work, but at a time when it becoming harder to develop and retain middle management.

Middle Management Stress & Turnover

In a recent poll by Lane4 in the UK (July 2012) more than 90% of workers believed that the vast majority of workplace stress was falling on middle management, and two in five (39%) of middle management reported that they were under severe stress.  As such, many mid-level managers are dissatisfied and would like to leave their current organization.   In harder times it is those middle managers who are your best and who perform well who find it easiest to find new roles and new opportunities.

This has several impacts on your business: firstly, the business will lose its top middle management talent, this will put an increase burden on those who are left behind; secondly, the exodus of mid-level talent seriously compromises the business’ future  leadership pipeline and its ability to have the right people in the right place to enable the business to grow and develop in the future; and finally those mid-level managers remaining will be the low-performers, who are more likely to be disengaged and who have “quit and stayed”.  All of this means that business’ ability to survive and thrive – especially in challenging times – is seriously compromised.

The Impact of Mid-Management Turnover

One of the current major growth challenges facing CEOs is the lack of key talent to enable them to grow the business.  This is exacerbated with the turnover of good mid-level manager as it compromises the business’ ability to execute the CEO’s strategy and drive results and outcomes.

Furthermore, the costs of middle management turnover are also high.  A common rule of thumb is to assess the cost of a middle manager to the bottom-line at one-and-a-half to two times their annual salary.  Assuming an average salary of $125,000 then this could mean $250,000 off your bottom line.  Alternatively, look at it in terms of the extra revenue you need to achieve just to stand still – assuming your net profit is 10%, then that is a further $2.5m of revenue required!

Practically, I think this heuristic is conservative.  Once you take into account the corporate knowledge, experience, expertise and insights that have been developed over a number of years you are looking at the loss of a very valuable contributor.  Furthermore, to recruit someone who is an equivalent is both difficult and expensive to do.

Causes of Mid-Management Stress

Middle management is under increasing stress for a number of reasons.  They are the people who have to lay off staff when the company downsizes (or more cynically “right-sizes”), in an environment of poor morale, having to do more with less, with little or no increase in salary or benefits whilst being responsible for more, a reduced opportunity for career progression, dealing with people who like them are worried and scared, and frequently being seen as an “unwanted layer” and at a high risk of being laid off themselves (often having had to lay off others first).

So what do we do?

Dealing with the Problem

In challenging times we need to maintain our middle management.  In economies which are struggling the senior executives need to work with and engage with their middle management even more closely.  It is at the mid-levels that the most important projects are, and reducing their resourcing is nigh on suicidal.  If the level of responsibility for middle management is extended, and their capacity and resources is limited or reduced, then you need to invest in their developing the necessary capabilities.  If this is not done then senior management will be faced with a “frozen” middle management compounded by cycles of low morale and low engagement.

Companies need to be resilient – leaders need to provide clear direction, they need engage the middle management and rebuild trust, and in doing so enable them to engage with their reports and teams in turn.  If you cut out the middle, then you are just left with the head and tail of the business – unable to do the necessary work effectively, and a corpse all but in name.

It may seem counter-intuitive but now is the time to invest in your middle management – this will pay off in terms of loyalty, results and longer-term growth.  Treat your key people as an investment, not a cost to be cut but people to be valued, developed and through whom you can achieve leverage and significant returns.

So what are you going to do?

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How Trust Drives Results

What do high-performing organizations focus on as opposed from low-performing organizations, and what differentiates how they do it?

Businesses are under pressure, there is no doubt about that – but what are businesses focusing on and why in these difficult times?  A recent report from Interaction Associates (Building Trust in 2012) found the top 3 priorities for business to be:

  1. Top line/revenue growth
  2. Profit growth
  3. Improvements to Productivity and Efficiency

No surprise here – but what is interesting is the way in which high performing organizations (those whose net profit grew more than 5% over the last year) and low-performing organizations (those under 5% over the last year or shrank) approached this.

High performing organizations focused on achieving this by focusing on the people aspects of the business, these include:

  • Customer loyalty and retention
  • Attraction, deployment, and development of talent
  • Business agility (speed, flexibility, adaptability to change)

Low-performing organizations focused on:

  • Improvements to productivity & efficiency
  • Cost reduction/becoming more efficient
  • Business agility (speed, flexibility, adaptability to change)

The focus here is more on the systems and processes to drive results and create agility, rather than having the right customers and right people to drive both revenue and profit growth (as with high performers).

So what does this mean?  Greater growth and profitability is driven by people. Systems, process improvements, and cost reductions can contribute towards growth – the only problem is that there is only so many times that you can cut the lawn before it starts to die off.  Conversely, focusing your attention on business and resources on the right customers and talent, rather than squandering it in a shotgun approach, enables you to grow the business with no limit on the upside.  For this, you need to inspire trust.

The key question then is this: are you trustworthy?  More to the point do your customers and staff think you are trustworthy?  What do you think you are – honestly?  And how would you assess how trustworthy you are? Share your thoughts here.

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How to Bait Your Hook

What do good anglers know which we can use in driving stronger business growth and results?

Fishing is one of the most popular leisure time pursuits in the world.  There is something about going out there, rod in hand, to capture that ever elusive fish.  This takes time, patience, skill and – let’s be honest – a bit of luck.

One thing that experienced anglers do is that they don’t waste time in an unproductive location.  You can try a few casts, change the bait, but if the fish are not biting then it is time to move on to a new spot.

We need to be like good anglers – if the fish do not bite quickly, then be prepared to move on and try elsewhere.  You might try for the same fish in another location, or using different bait or lures, or even go after another type of fish.  You want to be in a market where you will get a positive reaction as early as possible.

Doing this will save you time, money and embarrassment – it will also allow you to learn from the experience, and to apply it in future fishing spots.  What we do or how good we think something is not important.  There is only one judge out there and that is the market, and the market only cares if what you’ve done meets its needs.

The lesson here is that business is not about us, it is about our customers.  The question I like to ask to illustrate is this: “Why do people buy a quarter-inch drill?

I get a lot of answers – to hang a picture, for home improvements, to replace my old hand-drill etcetera.  They are all wrong.

The answer is simple: “To drill a quarter-inch hole!”

Customers are not interested in the features of the drill – such as its colour, whether it is turbo-charged, the special safety grip it has etcetera – they are only interested in the outcome from using it.

So if your product or service is not getting traction or garnering the sales you want then you need to do three things:

  1. Check that your product or service provides the outcomes that the customers/market need (have your hook properly baited);
  2. Be prepared to change fishing holes if the fish aren’t biting
  3. Continually learn from your experience so that you can:
  • produce a product/service that better meets the needs of the market (don’t confuse this with a better product which has more features but still fails to address the needs) and;
  • find and locate better fishing holes more quickly.

What do you do to find the right fishing holes?  How long do you wait before you move to a different location?  Are you really focused on delivering the outcomes a customer needs or delivering the product or service itself?

Share your ideas, insights and experience!  Share the knowledge, share the wealth!

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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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