800-CEO-READ Excerpts

Contagious Success - Part VIII

7. Your Employees Can Solve Your Problems

The first thing companies often do when they confront a serious challenge is to hire a team of consultants. While consultants can provide valuable insight from the viewpoint of outsiders, I would suggest that the first thing companies should do is consult their own employees. Because employees know the company well, they usually can figure out how to solve the problem.

For this to work, you first need to offer “amnesty” to employees for telling the truth about what needs to be done. Promise them that they will face no negative consequences for offering their ideas. The reason they don’t come to you in the first place is that they fear they will be at the top of the list when the next downsizing occurs.

I have shared the results of my research on high performance with many audiences around the world. At an event in Japan, a young man came up to me after my presentation and told me the following story. He said that he worked for a manufacturing company that was trying to reduce cycle time. The company had engaged three strategy consulting firms to solve the problem to no avail. Management decided to hold a contest and sent out a “Request for Proposal” to the internal staff. His workgroup responded and got the assignment. The group members were afraid of offending the company’s leaders by challenging some existing practices so they asked a senior-level manager to coach them about how to best approach management. With the coach’s help, they were able to respectfully suggest ways to solve the problem. Senior management listened, and the group accomplished the goal.

While the type of coaching the group received is difficult to find, the bigger problem is that many companies don’t ever turn to their own employees when they need smart thinking.

Contagious Success - Part VII

6. There Is Room to Grow

Even the highest-performing workgroups in our study could do better. In fact, the easiest, most efficient way to increase the overall performance of your company is to increase the performance of those groups already at the top by encouraging group members to speak the unspeakable, pass the ball to the right player, and practice respectful communication.

Ironically, rather than helping high-performing groups do better, companies often force them to do more with less. They say “you did this so well with eight people that we’re going to cut you down to six.” They tamper with these groups until they are no longer high performing.

Another way to increase overall performance is by moving average-performing workgroups into the high-performing category. By instituting a process for high and average-performing groups to collaborate on solving problems and overcoming barriers, you can increase the overall performance of your company.

Contagious Success - Part VI

5. It’s the Workgroup, Not the Individual

Individual performance is important, but it is affected by the environment. You can put your very best workers in the wrong environment, and they will not do their best work.

It is important for companies to develop high-potential individuals by providing training and mentoring and by helping them plan a career path. But if you want to get the biggest return on your human capital investment, make sure these individuals are in a high-performing workgroup. In our study, we found not only that talented individuals thrive in high-performance environments but such environments also increase the likelihood of B players becoming A players.

Even stars need to be able to function well in the workgroup. If you have people in your company who care more about looking good than helping the group look good; if they do only what will advance their own careers; if they define “winning” as beating their teammates, they will destroy the high-performance environment. High-performing workgroups accept that “we are in this together.” They realize that the whole is greater than the sum of its parts.

To maximize performance, the leader needs to leverage the skills of group members by playing to their strengths— not only their functional skills but also their natural abilities. Who is the go-to person for evaluating downside risk? Who is best at seeing upside potential? Who is the one who knows the historical context of a current situation? Taking advantage of differing skills enhances the group’s ability to collaborate effectively.

Contagious Success - Part V

4. It’s the Environment, Not the Leader

Our research demonstrates that the workgroup environment, not the leader, is the most important factor in driving high performance. This is true across industries and geographies. There is no single personality or style that defines an effective leader. What these leaders have in common is the ability to create an environment that values people (treating smart people as if they are smart), optimizes critical thinking (minimizing emotional responses by matching words and actions), and seizes opportunities (creating learning environments that turn challenges into opportunities). They create environments where people want to go to work every day.

Too often, high performance is dependent on a leader who intuitively understands the need for this environment. This leaves high performance to chance. The problem is that when the leader leaves, the group loses its ability to achieve peak performance. Companies can stop dependence on the leader by making the group responsible for creating a high-performance environment.

One way to do this is to conduct a 360-degree feedback process to evaluate the environment, gathering input from the group’s leader, members, and customers, as well as other workgroups with whom it interacts. The group should discuss what it can start, continue, or stop doing to drive business results and make the workgroup something people really want to be a part of.

Contagious Success - Part IV

3. Productivity Plus Innovation Drive High Performance

There is an important difference between productivity and high performance, although the two concepts are often used interchangeably. I suspect that is why 77 percent of the respondents in our study said that they consider their workgroup to be a high-performing unit within their company, when only 10 percent could provide evidence that this was so.

In recent years, some economists have argued that relying on productivity numbers to measure performance is misleading and potentially counterproductive. Based on an industrial model, productivity is still calculated as the number of units produced in a given period of time by a worker. But in a knowledge-based economy in which the service sector employs 80 percent of the workforce, productivity is much more difficult to measure. In addition, the ubiquity of e-mail, cell phones, laptop computers, and other communication technology makes it possible for professional and managerial workers to work from their cars, their homes, and even the beach—and those hours are not captured when measuring productivity.

Managers who solely emphasize productivity tend to drive out the capacity in their workers to engage in innovation and creativity. Knowledge workers, by definition, cannot provide full value to their organization simply through productivity increases. To increase shareholder value and sustain profitability, companies should foster creativity. Innovation combined with productivity leads to high performance.

Contagious Success - Part III

2. The Leader Protects the Group from Company Interference

The Hudson Highland Center for High Performance research found that one of the biggest differentiators between high-performing and nonperforming workgroups is that the leaders of high-performing groups protect the group from the larger company “so that we can do our work.” The research implies that, in too many companies, protection is a necessary condition of high performance. The leader is forced to put time and energy into combating the interference, often in highly imaginative and resourceful ways. One leader I met recently who spends a great deal of time protecting his group calls his behavior “intelligent disobedience.” Imagine if this intelligence, ingenuity, and energy were put into positive pursuits!

When I teach executive education classes at the University of Chicago Graduate School of Business and INSEAD in Fontainebleau, France, I begin my classes with the research results. The students in these classes are handpicked by their companies as high performers. Most are leaders of essential workgroups in their companies. When I talk about how the leader is a buffer between the company and his workgroup, many heads nod in agreement. Inevitably, people come up to me after class to say, “No wonder I am so exhausted, since I spend so much time and energy combating interference.”

Typically, a month or two after class ends, I get a call or an e-mail from one of these students saying he or she has decided to move on. The student usually says something like, “I couldn’t take it anymore. I quit my job and I never felt better.” Recently, I got a call from one of my executive MBA students. She had left the company where she worked for twenty years to start her own business. She saw her former company as shortsighted and risk averse. Management tried to convince her to stay, but more money and a better title didn’t solve her problem. She wanted an environment that fully utilized her brain, and decided to create it on her own.

More often than not, these students don’t quit their jobs because they have another position. They just want out. These are the risk takers—those willing to challenge the status quo to find a better way to do things. They are the leaders most likely to drive high performance. They are exactly the kind of people that companies should develop and nurture, yet the companies are inadvertently driving them out. No senior leadership team deliberately sets out to decrease the performance of its best workgroups. However, that is exactly what is happening. It’s time for top managers to start removing barriers that are forcing leaders to spend more time protecting their high-performing workgroups than making money for the company.

Contagious Success - Part II

1. Short-Term Thinking Kills Performance

The emphasis on quarterly results has never been greater. Ironically, our research shows that the number one inhibitor of high performance is short-term thinking—living for today at the expense of tomorrow. To meet quarterly financial goals, companies are cutting staff and budgets, resulting in overworked, frustrated employees.

On the day they announced their IPO, the founders of Google vowed to concentrate on the long term. “In our opinion, outside pressures too often tempt companies to sacrifice long-term opportunities to meet quarterly market expectations. ...If opportunities arise that might cause us to sacrifice short-term results but are in the best long-term interest of our shareholders, we will take those opportunities. We will have the fortitude to do this. We would request that our shareholders take the long-term view,” wrote Larry Page and Sergey Brin. To spawn the creativity that leads to opportunities, Google encourages employees to spend 20 percent of their time working on whatever they think will most benefit the company in the long run.

Balancing the short and long term is perhaps the single biggest challenge facing companies today. Not all senior leaders have the fortitude to sacrifice short-term results. However, all do have the opportunity to collaborate with their workgroups to attain an intelligent balance. Yet too often senior leaders try to accomplish this difficult task on their own. They make across-the-board cuts without looking at how these decisions affect the individual workgroup. Far too little input comes from outside the executive boardroom.

Senior leaders need to engage members of high-performing workgroups in discussions about the challenges facing the company and the financial targets the company proposes for the workgroup. Are the goals achievable? How will meeting the targets affect future as well as current performance? Once senior management and the workgroup leader agree on realistic targets, the group should decide how to achieve them. There are different ways to get to the same place. Across-the-board cuts may not be the answer.

Contagious Success - Part I

Contagious Success: Spreading High Performace Throughout Your Organization
by Susan Lucia Annunzio
Portfolio - November 2004
246 Pages - ISBN 1591840600






We are going to run an excerpt from the last chapter of the book. Chapter 8 gives ten lessons from the research Annunzio has done. We are going to run the first seven lessons. Here is the opening text to the chapter:

Conventional wisdom isn’t getting companies where they want to be. In this chapter, I will summarize the ten most important lessons I have learned in the course of researching this book. They all defy conventional wisdom. If you embrace these lessons, you will be well on your way to creating a high-performance environment.

No matter where in the world your company is, the drivers of high performance are the same. Knowing your business and meeting your customers’ needs are important, but they are not enough. What drives high performance is valuing people, optimizing critical thinking, and seizing opportunities. Without an environment in which these occur, your company will not be able to develop the new products, services, or markets you need to sustain profitable growth.