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.

To view or download a PDF version of this blog click here

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

If you found this article of use or interest please don’t hesitate to share it with others.

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

5 Tips in Changing Your Mindset About Profit

 

Future Profit

A recently published book, Understanding Michael Porter: The essential guide to competition and strategy (Magretta, 2012), compiles and applies the work of management guru, Michael Porter.   Full of useful insights, here are five pearls of wisdom that can, if applied, create a more robust, more profitable and sustainable business.

Tip 1: “Strategy explains how an organization, faced with competition, will achieve superior performance. The definition is deceptively simple”

Performance is not about your competition, it is about achieving superior performance, every day, regardless of what is happening with your competitors or markets.

Tip 2: “Competitive advantage is not about beating rivals; it’s about creating unique value for customers. If you have a competitive advantage, it will show up on your P & L”

To create unique value is not about you beating your competitors, it is about you delivering (through superior performance) the unique value by focusing on your customers’ needs.

Tip 3: “Strategic competition means choosing a path different from that of others”

If you accept that the competitive goal is superior performance, then it makes sense to achieve that performance using methods different to the competitors. You have to be able to differentiate yourself not only in the customer’s eyes, but in how you achieve that differentiation – in how you deliver value to the customer.

Tip 4: “The value proposition is the element of strategy that looks outward at customers, at the demand side of the business. The value chain focuses internally on operations. Strategy is fundamentally integrative, bringing the demand and supply sides together”

Strategy is about achieving a position.  Here it is to achieve superior performance whilst delivering superior value to the customer.  You need to be able to focus on how you will drive that superior performance, and what this means in terms of superior customer value.  In this you need to continuously improve the efficiency of your internal operations.

Tip 5: “There is no honor in size or growth if those are profitless. Competition is about profit, not market share”

This tip serves as a reminder that we need to be the most profitable, not the biggest in top-line revenue or head-count.

Consider these five tips in context of your own organization. What should you do to meet the requirements of all five? Is your current strategy going to work for you in the coming next few years?

What has worked or not worked for you? Share your knowledge, share the wealth!

Share

4 Ways to Manage for Long-Term Results (& Its Not About Profit!)

Managing for profit can be detrimental to your business in the longer-term.  Discover the 4 guidelines to help your business thrive, not just survive.

We are in uncomfortable times.  Europe is facing a myriad of difficulties, China’s growth is looking to slow-down (albeit continuing), competition is more intense and customers are more demanding and better-informed. Yet amongst these difficulties there are companies who are not just surviving but thriving.

How are they managing to do this and what can we learn and apply from them?  Here are four guidelines for thriving, not surviving.

1. Manage for Value, Not For Profit.

You can’t manage profit – profit is an outcome of your revenues and costs.  You can manage your revenues and your costs, but you cannot directly manage your profit..

Successful companies look at managing value – they ascertain whether what they do creates and provides value both to them and their customers, or not.  You need to create value for both parties in order to be able to capture value for yourself.  Too many companies look at their relationship with their customers as a zero-sum game or as a win-lose opportunity i.e. we are dealing with a pie of a set size, so if I want a larger slice of the pie then the other has to have less and vice-versa.  This is a weak mind-set which immediately puts you in conflict with your customer.

Rather, look at your customer relationships as a win-win opportunity – the opportunity to create and grow value with each other.  This mindset allows the size of the pie to be increased, allowing you to capture more value, even if the split remains the same.  This enables you to collaborate with your customers and create long-term opportunities and relationships, rather than short-term gains at the cost of your customer relationships.

As such value is a driver of profit – the greater the value, the greater the opportunity to drive profitable outcomes.

2. Manage for the Long-Term

Too many businesses are driven by short-term considerations and take actions which, although they may provide relief in the short-term, destroy value in the long-term.  For example, investment in R&D may be cut now to save money and improve short-term profit – but it destroys value in the mid-to long-term as those assets which can create future value in the years to come are weakened, undermined or even destroyed.

3. Manage the Development of Your People

Every company claims that “people are our most important asset,” but few mean it. Frequently business’ investment in leadership development is cut during hard times – at exactly the time when it is needed most to enable and empower high-potential managers to lead the business to success and through these hard times.

In a recent survey of leadership globally, it was found that many of those countries with strong supplies of leaders today are facing a shortfall in the future – this includes countries such as the UK, Australia and Canada.  As such, business leadership is an important issue not only now but in the future (for further information see the blog “The Ticking Talent Timebomb”).

4. Manage your Focus – Be Customer-Centric 

Business needs to understand their customers in terms of what they need, what the business can offer, and how this translates into value for both parties.  As such you need to be able to properly address and craft your offerings to meet their needs.

Furthermore, you need to know not only what business you are in – but what business you are not in.  I have seen many companies grow and expand their offerings beyond what is their core business in response to meet their customers’ demands.  However, this has come at a cost.  As a result, management focus and attention is dispersed, scarce resources are allocated ineffectively and inefficiently, the business lacks the necessary skills to operate in these new areas, costs increase and margins reduce, and the business grows in an unstructured and  ad hoc manner which is difficult or impossible to consolidate.  All of which increases the level and range of risks to which the business is exposed, often beyond the gain that they might realise from this unstructured growth.

Summary

Don’t focus on profit – focus on value and you will achieve profit.  However, this requires discipline, courage and the willingness to invest in the long-term and in developing your people to ensure that you deliver what the customer needs and values.

What are you doing to grow your ability to create, share and realise value?  What has been stopping you and how have you overcome these barriers?

Share your thoughts and comments here.

Share the knowledge, share the wealth!

 

Share

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

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.

Share

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

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!

Share

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

Using the Leadership/Management Matrix to Develop Your People

Leadership and management may complement each other, but they are very different

So which is more important, management or leadership? This is not the right question to ask, rather the question to ask what is the balance between management and leadership that you need to have? To answer this, you need to at what role each plays. Management ensures the stability and efficiency necessary to run today’s business reliably. Leadership creates the change needed to take advantage of new opportunities, to avoid serious threats, and to create and execute new strategies. The point is that management and leadership are very different, and when organizations are of any size and exist in environments which are volatile, both are essential to helping them win.

The Leadership/Management Matrix

The management/leadership matrix show what happens when you have weak or strong leadership interacting with weak or strong management.  The four quadrants are:

  • Doomed – weak management, weak leadership.  Here the business is run inefficiently and with no clear direction to guide and align people’s efforts, decisions and the allocation of resources.  People are not inspired or motivated to achieve high-performance, and the business is losing to its competitors.  The business is unlikely to survive beyond the short-term.
  • Innovative – weak management, strong leadership. Here the business is able to adapt quickly and effectively, but there is insufficient management and associated skills in place to drive stability, efficiency and to create the necessary order to manage the resulting complexity and create order from which to build.
  • Well run but bureaucratic – strong management, weak leadership.  Here the business is well-structured and managed; it works efficiently which is good while the status quo exists.  However, in an environment of change it finds itself relatively rigid and inflexible with its existing bureaucracy and organization being unable to adapt effectively.  This can expose the business with existing strengths potentially becoming major liabilities, potential competitors going unrecognized or changes in customer needs going unmet.
  • Well run and innovative – strong management, strong leadership.  Here there is a healthy balance of management and leadership skills and capacity.  The business has a clear direction around which everyone and all actions are aligned, people are inspired and motivated, and as a result they work both efficiently and effectively.  They are competitive, adaptive and have the right mix of skills, capacity enabled by a strong business culture which supports the people in their work.

Look at this matrix and, for you and your team, assess their level of management and their level of leadership.  People do not need to be a manager or a leader per se, nor is it about their position in their hierarchy. Rather it is how good they are at delivering on and exemplifying the attributes got management and leadership (see the table below for ideas).

Score yourself and each of your team members on leadership and management using the following scoring range of 0 (very weak) to 10 (very strong).  The two scorings will give you each individual’s relative positioning and your own.  A good idea is to assess people yourself, then get them to self-assess, and then to share your respective findings and discuss the differences/similarities. This is a good tool to identify where and how an individual needs to develop their management and/or leadership skills. This can then be used in helping put together their personal development plan.

To view or download a PDF version of this blog click here

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

If you found this article of use or interest please don’t hesitate to share it with others.

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

Peter Drucker on Marketing

Peter DruckerLong ago Peter Drucker, the father of business consulting, made a very profound observation that has been lost in the sands of time:

Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

Today, when top management is surveyed, their priorities in order are finance, sales, production, management, legal and people. Missing from the list: marketing and innovation. When one considers the trouble that many of our icons have run into in recent years, it is not easy to surmise that Drucker’s advice would have perhaps helped management to avoid the problems they face today.

Ironically, David Packard of Hewlett-Packard fame once observed that “marketing is too important to be left to the marketing people.” But as the years rolled on, rather than learn about marketing and innovation, executives started to search for role models instead of marketing models.

Tom Peters probably gave this trend a giant boost with the very successful book he co-authored, In Search of Excellence. Excellence, as defined in that book, didn’t equal longevity, however, as many of the role models offered there have since foundered. In retrospect, a better title for the book might have been In Search of Strategy.

A popular method-by-example book has been Built to Last by James Collins and Jerry Porras. In it, they write glowingly about “Big Hairy Audacious Goals” that turned the likes of Boeing, Wal-Mart Stores, General Electric, IBM and others into the successful giants they have become.

The companies that the authors of Built to Last suggest for emulation were founded from 1812 (Citicorp) to 1945 (Wal-Mart). These firms didn’t have to deal with the intense competition in today’s global economy. While there is much you can learn from their success, they had the luxury of growing up when business life was a lot simpler. As a result, these role models are not very useful for companies today.

There is a growing legion of competitors coming at new businesses from every corner of the globe. Technologies are ever changing. The pace of change is faster. It is increasingly difficult for CEOs to digest the flood of information out there and make the right choices.

But a CEO can have a future.

The trick to surviving out there is not to stare at the balance sheet but simply to know where you must go to find success in a market. That’s because no one can follow you (the board, your managers, your employees) if you don’t know where you’re headed.

How do you find the proper direction? To become a great strategist, you have to put your mind in the mud of the marketplace. You have to find your inspiration down at the front, in the ebb and flow of the great marketing battles taking place in the mind of the prospect. Here is a four-step process to pursue:

Step 1: Make Sense in the Context

Arguments are never made in a vacuum. There are always surrounding competitors trying to make arguments of their own. Your message has to make sense in the context of the category. It has to start with what the marketplace has heard and registered from your competition.

What you really want to get is a quick snapshot of the perceptions that exist in the mind, not deep thoughts.

What you’re after are the perceptual strengths and weaknesses of you and your competitors as they exist in the minds of the target group of customers.

Step 2: Find the Differentiating Idea

To be different is to be not the same. To be unique is to be one of its kinds.

So you’re looking for something that separates you from your competitors. The secret to this understands that your difference does not have to be product related.

Consider a horse. Yes, horses are quickly differentiated by their type. There are racehorses, jumpers, ranch horses, wild horses and on and on. But racehorses can be differentiated by breeding, by performance, by stable, by the trainer and so forth.

Step 3: Have the Credentials

There are many ways to set your company or product apart. Let’s just say the trick is to find that difference and then use it to set up a benefit for your customer.

To build a logical argument for your difference, you must have the credentials to support your differentiating idea, to make it real and believable.

If you have a product difference, then you should be able to demonstrate that difference. The demonstration, in turn, becomes your credentials. If you have a leak-proof valve, then you should be able to have a direct comparison with valves that can leak.

Claims of difference without proof are really just claims. For example, a “wide-track” Pontiac must be wider than other cars. British Airways as the “world’s favorite airline” should fly more people than any other airline. Coca-Cola as the “real thing” has to have invented colas.

You can’t differentiate with smoke and mirrors. Consumers are skeptical. They’re thinking, “Oh yeah, Mr. Advertiser? Prove it!” You must be able to support your argument.

It’s not exactly like being in a court of law. It’s more like being in the court of public opinion, especially with the rise of social media.

Step 4: Communicate Your Difference

Just as you can’t keep your light under a basket, you can’t keep your difference under wraps.

If you build a differentiated product, the world will not automatically beat a path to your door. Better products don’t win. Better perceptions tend to be the winners. The truth will not win out unless it has some help along the way.

Every aspect of your communications should reflect your difference. Your advertising. Your brochures. Your web site. Your sales presentations.

The folks who work for or with you don’t need mystical answers on “How do I unlock my true potential?” The question they need answering is, “What makes this company different?”

That answer gives them something to latch onto, and run with.

To view or download a PDF version of this blog click here

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

If you found this article of use or interest please don’t hesitate to share it with others.

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