How to Avoid Leading in the State of Denial

Leading in the state of denial is the biggest cause of business failure in the New Economy. Why!

The NewGlobal Economy

How to Avoid Leading in the State of Denial

Because the business owner never saw failure coming. They zigged when the market zagged. The warning signs were there they just didn’t see them. Are you leading in the state of denial?

In the New Economy you can’t afford to lead by looking in the rear view mirror and doing more of what you’ve always done. (How did that work for Kodak, RIM, and Hostess to name a few?) Instead stay focused on your vision and the road ahead. As a business owner you must leave the state of denial and wake up to the reality it’s not going to be business as usual…even if it may seem like it now. Shift happens and things can change in a hurry.

One of the biggest challenges many CEOs and business owners face is that there is no one to answer to. There is no boss or supervisor looking over their shoulder to make sure they have followed through. There is no one pushing them to set higher goals and take action to attain those goals. It’s lonely at the top. That’s why many successful leaders turn to outside resources to help them manage their way. Whether it’s stalled growth or translating their strategy into an operating plan, they have challenges related to their role as the company’s leader – challenges that cannot be delegated to a member of your management team.

Leaders have Blind Spots

The harsh reality all leaders have blind spots and in most small to mid-size companies the management team often doesn’t have the time or the expertise to uncover the root cause of a problem and/or to devise and implement a viable solution.

Steve Hennegan, President and CEO of San Antonio Credit Union had this to say about blind spots; “I’ve learned all my blind spots that I knew at the time. I’ve also learned that I’m always going to have new ones. I would just say this is: “I don’t know where my blind spots are, that’s why they’re called blind spots. I can tell you some of the ones that got me in the past. I can also say that, in each role that I’ve taken and the variety of roles that I’ve had getting up to this point, I uncovered blind spots at that point that I didn’t know I had and I wouldn’t have actually seen it until I got in that situation.”

The key here is admitting that you can’t do it all by yourself and that they don’t give prizes for reinventing the wheel. Find and hire outside resources that can give you the insights to move you’re your current limitations. Once you’ve made this decision, you need to decide what type of resource best compliments your leadership and your management team. The most commonly used approaches are:
• Mentors
• Coaches
• Consultants
• Advisory Board
• Peer Advisory Groups
• Mastermind Groups

Let’s examine each one.

Mentors

If you’re navigating tricky new territory in the marketplace, chances are that your mentor has probably had to navigate a similar situation at some point in their past. They can share their advice on how best to maneuver through a challenging situation, and lessons they’ve learned through similar experiences from their past.

A mentor’s primary role is to provide you with counsel in the execution of your responsibilities. A business owner or CEO’s job is all about doing the right things and doing them effectively. A mentor’s job is to ensure that you focus on the most important aspects of the job, and that you do them well.

Justin Norman CEO of JD Norman Industries started a manufacturing business without any operating experience before. To compensate for his lack of experience Justin developed relationships with mentors with either sitting CEOs or retired CEOs who are in a phase of their life where they enjoy mentoring and answering questions. Norman explains, “The stuff that I’ve seen for the first time in my life others have seen it 7 times before. So I’ve gained a lot of insight from that because it’s clearly a blind spot of mine going through the growth and the operations of the company for the first time.”

Mentors can also help you set career and personal goals, hold you accountable, expand your network of contacts and provide insights into the “little things” that can make a big difference in growing your business and in developing your leadership skills.

When selecting mentors you should choose a mentor who is working or worked in a similar industry as yours. Your mentor should be someone who inspires you with the success of their career and whose professional achievements you hope to emulate. Because they’ve learned a lot and developed many skills in their career, they’ll be able to guide you towards the best ways to learn the skills you’ll need to achieve similar success.

Coaching and Consulting

“Coaching” and “consulting” are often confused. Both coaching and consulting involve a skilled professional that assists a client in achieving his or her goals. The differences lie in how they support the client. A coach usually works one-on-one with a client to facilitate personal or professional change. The coach listens, give feedback, asks questions, and holds the client accountable. At the end of the day, it’s the client who does all the work implementing the plan of action.

Companies hire consultants to access a capability or expertise not available within the company. They are also brought in to give an outside, objective perspective on an existing problem. Consultant’s role can vary considerably. Depending on the contracted work, consultants can provide analysis on a specific problem, offer advice, make recommendations, teach new skills or develop an action plan. Sometimes, the consultant may implement the solution for the company or find and manage outside contractors to complete the work.

John Foley, CEO Grow Socially and Interlink ONE

used a consultant to help build a critical system for his business. “We’re not a very process oriented organization. When we bring a new customer or project on and we assign different employees to it, we don’t do that very well. So for us to get to the next level we need to build a system for how we run projects. We need everyone, not just management, to understand how we run projects through the company. That was my blind spot and I needed some help with getting that done. So we brought in a consultant here to help build our Knowledge Management System and to make sure we have our processes in place.” Having the system in place allowed John and his staff to, “start working on our business versus in the business.”

Which is best for your company a coach or consultant? The answer depends on what your goal is. If you have a specific business-related problem and don’t have the required skills or capacity to fix it, hiring a consultant is your best bet. If you have high-level goals such as deciding on the direction to take your company, how to lead or facilitate change, developing your leadership skills or how to maintain work-life balance, you might consider hiring a coach.

Advisory Boards

Advisory boards are different from boards of directors because they don’t have a vote, legal say or other control over your business decisions. Their role is to offer advice and recommendations. The most effective advisory boards are comprised of people who bring talent that covers the classic business spectrum of human resources, marketing, operations, administration, legal, finance and in some cases, technology.

The selection of advisory board members should be based on what your greatest needs are and to supplement the resources on your management team. For instance, if the management team is strong in sales and engineering, you might look to fill the board with people with human resources, technology and marketing backgrounds. Some business owners like having a business peer in a non-competing industry serve on their board to give “pragmatic” perspective.
Boards of this nature generally are most effective if they meet with regularly, like quarterly. They usually aren’t expected to do significant work on the business between meetings.
Because board members are professional they should be compensated for their time. Compensation for advisory board members is generally in the range of $150 to $300 per hour for meeting time.

One of the biggest benefits of having an advisory board is the impact the advisory board meeting has on a Company’s management team. The upcoming meeting often serves as a rallying point to bring the management team’s planning efforts into focus because CEO’s and business owners often have their management team make formal presentations to the board. These presentations add new perspectives and add a level of accountability.

Merissa Levin CEO of Information Experts and Successful Culture uses an Advisory Board for guidance and accountability. Levin explains, “I have an Advisory Board and the thing about an Advisory Board is that it doesn’t just stop with the CEO. Smart companies use their Advisory Board as education and mentorship and coaching for the rest of their company. Our Advisory Board is very integrated into our organization and their relationship doesn’t just stop with me.”

Peer Group Advisory Groups

A Peer Advisory Group serves as a reciprocal advisory board. It allows its members to have a team of advisers who are invested in achieving group goals without the fiduciary liability or governance authority associated with a corporate board.

Peer advisory groups are typically made up of eight to ten CEOs or business owners who are not direct competitors and don’t have a conflict of interest. Their purpose is to help group members overcome the problems and issues that most companies face. Most peer advisory groups meet quarterly or semiannually, although a few, meet monthly. Much depends on the proximity of the members and the length of the meetings. The groups that meet less frequently usually have periodic conference calls between face-to-face meetings and password protected websites for online interactions. The following are just a few of the advantages a peer group can offer:
• Management team members frequently view issues from the same vantage point, even if they don’t think alike. Plus, some issues never get discussed because of potential risk and a desire to maintain harmony. This creates blind spots and limits objectivity.

• Owners and CEOs need a sounding board for their ideas. They want to make sure that they haven’t missed anything and that their plan is sound.
• Peer advisory groups can provide feedback on plans and ideas, explore “what if” questions, and provide greater insight and objectivity.
• Within a group, people will have different talents and experiences. Peer groups can be an effective way to overcome weaknesses and complement strengths.
• Succeeding in the new economy requires both vision and candid insights. Peer advisory groups can help executives step away from the day-to-day routine long enough to focus on the big picture.
• When you are managing a growing business, your friends and family may not understand the issues you face. However, every business owner and CEO in a peer group has the same sense of isolation and can offer support and understanding in a way that no one else can.
• Peer advisory groups can provide access to the collective membership’s network of contacts, sources of information, resources, and expertise. The expanded network can also help in identifying new markets, supply sources, potential employees, and business opportunities..

The first prerequisite to a peer advisory group’s success is a commitment to openness, trust, confidentiality, and mutual respect for each other’s ideas, opinions, and suggestions, even if everyone doesn’t agree with them. The group’s real value occurs because people don’t see things the same way or think alike. Keep in mind that it’s often the things you don’t want to hear that you need to hear most.

To be successful, peer advisory groups need:
• Ground rules
• Planned agendas to keep discussions on target and for everyone’s benefit
• Members who are able to both give and take. People who can’t accept criticism or who can’t admit they are wrong are not good candidates. The same is true for people who only take and don’t contribute.
• Procedures for removing members when there isn’t the right fit or chemistry. It’s best to get everyone’s agreement up front so you can have an amicable separation.
• A confidentiality agreement, so that all members, even those who leave the group, are professional enough to respect the rights of the other members.
• A clearly defined objective or purpose.
• In almost every case, a peer advisory group is led by a professional facilitator who functions as a mediator between participants.

Like marriages, partnerships, and business mergers, a match that looks great on the surface doesn’t always work. The right chemistry and a common vision and values are critical. You won’t really know until you start working together. With anything new, there is always a learning curve. Sometimes you have to recognize that you have the right idea but the wrong people and start over or change the makeup of the group.

To gain a better understanding of and appreciation for individual differences, many groups use personality inventory tests such as Myers-Briggs, Reiss Profile or the DISC. Using instruments like these helps to improve communication and working relationships while facilitating more effective group interaction.
There are several organizations that create and manage peer advisory groups including:
CEO Focus
Vistage

Mastermind Groups

The concept of the “mastermind alliance” was formally introduced by Napoleon Hill in his timeless classic, “Think and Grow Rich,” though mastermind groups have been around since the beginning of time.
Napoleon Hill wrote about the mastermind group principle as:
“The coordination of knowledge and effort of two or more people, who work toward a definite purpose, in the spirit of harmony.”
He continues…
“No two minds ever come together without thereby creating a third, invisible intangible force, which may be likened to a third mind [the master mind].”

Mastermind groups provide business owners and CEOs a combination of brainstorming, peer accountability and support in a group setting to sharpen their business and personal skills. A mastermind group helps both you and your mastermind group members achieve success.

When you’re in a mastermind group participants challenge each other to set important goals, and more importantly, to accomplish them. The group requires commitment, confidentiality, willingness to be creative and brainstorm ideas/solutions. You also need to support each other with total honesty, respect and compassion. Mastermind group members act as catalysts for growth; they play devil’s advocates and provide emotional support for their colleagues.

In a mastermind group, the agenda belongs to the group and each person must be committed to their own success. Your mastermind partners give you feedback, help you brainstorm new possibilities, and set up accountability structures that keep you focused and on track. You create a community of supportive colleagues who brainstorm together to move the members to new heights.

A mastermind group is similar to a peer advisory group but mastermind groups tend to be less formal with the focus being more on setting and achieving goals. There are several types of mastermind groups including:
• Virtual or in person (or a combination)
• Group led or facilitated
• Paid or free
• Industry based or interest based
• Small (3 people)or large (100+)
• Ongoing or one time only (before or after an event or conference)

Mastermind groups can provide motivation, inspiration and accountability. They can also be a drain on your time and energy. The key is to make sure that the group’s purpose, values and expectations are aligned with yours. If a group isn’t the right fit for you and your business disengage quickly and professionally.

Don’t join if you’re not willing to support your group members the way you want to be supported. You’ll get what you give in most mastermind groups.

Which outside resources is best for you?

The answer to that question is: it depends. It depends on your needs, resources, time availability and personality. Many CEOs use multiple outside resources. Melissa Levin of Successful Culture and Information Experts uses advisory boards, coaches and belongs to a mastermind group.

 

Grow Your Business with the Right People

grow your businessDo you want to grow your business? If you do then you must have the right people. In Jim Collins book “Good to Great” he says you have to make sure that “the right people are on the bus”. This means that you as a leader must know the strengths and motivation of each person on your team, as well as how the individual impacts the performance of the team. Recognizing a person’s talent and then managing it creates a motivated and engaged workforce. Failure to hire the right people for the jobs and not putting people in positions where their talent can soar is a waste of a company’s resources. Southwest Airlines set itself apart from the industry by hiring and developing people who are a natural fit for the company and the jobs they were hired for. The result has been an engaged workforce, low turnover and great customer loyalty.

Let’s look at how having the wrong people in place can cost your company dearly even at entry level positions. I was with a friend waiting in line at Starbucks as he was paying for his $8.00 grand latte supreme. The young woman at the cash register said, “That”ll be $8.00 please. Boy that’s expensive!” In that moment of truth my friend looked at me and said with a chuckle, “She’s right.” He paid and left with his prized coffee. But he stopped going there deciding his coffee money was better spent at 7-11 at $2.00 a pop. Situations like this are as preventable as they are unfortunate. The right person with the right training would never have made this comment. The right people will help you grow your business while the wrong people will sink it.

Marissa Levin, CEO of Information Experts has grown her $15 million award winning business through hiring the right people. Levin explains her company secret to hiring , “When we look at employees, there are three things that we have to look at. And this is a rule of thumb pretty much for everybody, any organization. It’s called the GWC Principle. Do they get it? Do they want it? And do they have the capacity to do it? So as we look not only at new hires, but at the existing people as we shuffle them around and reorganize and grow, we have to look at people and say, “Do they get it? Do they really get what they’re supposed to be doing? Do they want it? Do they have the passion for it? And do they have the capacity? Do they have the physical capacity, the intellectual capacity, and the emotional capacity? Whatever the capacity may be, do they have the capacity to do it?” And not all employees in every position are going to have the get it, want it and have the capacity to do it factor.” Use the GWC Principle to grow your business.

To grow his cloud hosting business Matthew Porter, CEO of Contegix pays a finders fee to employees of $20,000. He puts his money where his mouth is because he understands that without the right talent his company won’t grow. How much is the right employee worth to help you grow your business?

In a competitive marketplace having the right human capital is critical to surviving and ultimately thriving. Make sure that you spend the needed time, energy and thought to hire and develop the right people to grow your business.

Corporate Culture and Leadership: Lessons Learned from Goldman Sachs

The corporate culture and leadership at Goldman Sachs was put into an unflattering light by one of it’s own executives. Greg Smith retired from leadership and culturethe his position at the financial services company where he was executive director and head of the firm’s equity derivatives business in Europe. His parting gift to the firm was a March 14th op-ed in the New York Times, “Why I left Goldman Sachs.” He took unflinching shots at the company’s corporate culture and leadership by outlining “a decline in the firm’s moral fiber.” Smith wrote “Today many of these leaders display a Goldman Sachs cultural quotient of exactly zero percent. …Integrity? It’s eroding.”

Smith’s action brings to mind two key questions. First is Goldman Sachs really that bad? Second why would an executive take such drastic action against his former employer?

Let’s address the first question. Although executives at the Goldman Sachs have been disputing Smith’s claims the firm’s shares dropped 3.4 percent on the day of the op-ed. This suggests that there are shareholders who suspect that there may be some truth to the allegations.

Why did Smith write the piece? He said he did it as “a wake-up call” to the board “(to) make the client focal point (of its) business again.” The firm said he was a disgruntled employee. Only time will tell who is right. There is probably merit for both sides.

What’s the lesson to be learned?

These are stories told at the water cooler, at a lunch table or in the ladies or men’s room. These aren’t the glowing stories created by a PR firm or ad agency. These are the stories that reveal the true DNA of an organization.

If culture defines “how we do things around here” then the stories employees tell are the way it’s conveyed. In many organizations there are the SOPs and then “the way we really do things.” In other organizations they are one in the same. Which one are you?

Great companies have employees who tell great stories that are aligned with the direction set by their leaders. When negative issues surface great companies listen, discern and take appropriate action. They do this because they know failing to do so is the first step down a slippery slope towards a dysfunctional culture.

The challenge for you is to know what stories your employees are sharing. If your employees were to write an op-ed in the New York Times about your organization would it be glowing or scathing?

Corporate culture and leadership must be developed and cultivated over time. It’s based on what you say and the extent your actions support your words.  The by-product is the stories employees tell. Make sure your actions cultivate the stories you’d want to appear in the New York Times.

To get a better picture of your culture take the Growth Positioning Survey.

Leadership Makes the Difference

leadership makes the differenceIn spite of all the doom and gloom on the news many companies large and small are thriving in the same market spaces that are  claiming former industry leaders. Apple, Michael’s, Ulta, ITW, Honest Tea, Contegix, Convergint Technologies, Information Experts, JD Norman Industries and Foursquare are a few of those that come to mind. What are these companies doing that allows them to step out from the pack? One word: Leadership.

It’s easy to lead when times are great and your company grows based on the market you’re in and not by the ability to execute business fundamentals. A bad economy doesn’t cause good leadership to become bad, it simply reveals deficiencies that were shielded by the robust economy. These deficiencies are now exposed so that they can be exploited by the marketplace and competitors alike. If you don’t understand the difference between being lucky (being in a good market) and being effective you’ll become a quick casualty in a tough economy.

The New Economy is similar to the playoff season in the NFL. The competition intensifies and stakes become higher. Each team enters the playoff game armed with knowledge of their competitor’s strengths, weaknesses and tendencies. This information is used to develop a game plan designed to leverage their own strengths and exploit the weaknesses of the competition. The team with the best game plan and execution of that plan wins the game and advances to the next round. The team that fails to plan well or execute effectively is left to ponder what went wrong and what could have been. In sports they say, “Wait until next year”. In business there may not be a next year especially for the CEO or president.

I’ll guarantee that the CEOs of the struggling companies like Kodak, RIM, HP and BOA don’t wake up every morning thinking; “What can I do today to lose more shareholder value, de-motivate my employees while making more customers choose our competition?” Even if the results suggest that they did. The truth is that they just weren’t prepared as leaders to navigate in the New Economy.

What can your company do to ensure success in the NEW ECONOMY?

During every economic downturn there have always been winners and losers. Companies with great leadership take market share from those that don’t. In the Great Depression companies like Campbell’s, Coca- Cola, Kellogg and others prospered during and afterwards because of their leadership and commitment to customers, brand and employees.

Research conducted by the Harvard Business Review on how companies responded to the downturn in 2000 indicates that a combination of selective cost reductions and strategic investments in new business opportunities allowed businesses to not just combat the downturn but laid the foundation for continued success when the downturn ended.(Harvard Business Review)

Michael’s, the craft store chain, is embarking on this path as they have a strategy of using 50% of their cash flow to pay off debt and 50% to invest in growth. According to CEO John Menzer, “Reducing debt reduces our business risk, yet we continue to invest and grow stores and invest in technology, especially in the promotional side”.

Menzer’s three suggestions for leading in this economy include:

  • First of all, adjust your business to economic conditions. Make sure you know where your expenses are going to be as well as where your cash flow is going to be.
  • Make sure you have a very strong program if you want to grow. Because, if you want growth you’re going to have to drive your business. But you do it in a way that minimizes business risk.
  • And if you’re going to continue to grow, then you better have people ready and you better be communicating to your team.

Michael’s strategy is paying off. Through the third quarter they are realizing record sales due to new approaches to marketing and increased earnings generated by improved operational efficiencies.

Companies who are thriving now share many things in common including:  having a clear sense of who they are, knowing who their customer is (and isn’t), understanding the market they compete in, and then aligning their sales and marketing efforts to uniquely communicate and deliver their solution. Simply put they have “Right Sized” their organization to deliver the right solution, to the right customer, at the right time and at the right price… and they do it in a way that ensures bottom line results and grows customer loyalty.

Is your business positioned to thrive or stumble in the New Economy. Find out by taking the Growth Positioning Survey.

Welcome to the New Economy!!!

If you own or run a business today you know we’re experiencing an economy that is different than anyone has seen in the past. Our current business landscape is filled with one crisis after another. Like waves on a beach they just keep pounding away. Here are a few of the economic “challenges’ we’re facing:Welcome to the New Economy

  • Unemployment and underemployment is impacting 20-25% of the workforce and recovery is expected to be both slow and painful
  • 11 million homeowners are upside down on their mortgages with little or no options on the horizon
  • The Baby Boomers lost 30-40% of their wealth over the past few years
  • Our debt ceiling/budget crisis is hopelessly deadlocked in DC
  • Local and state budget deficits are becoming more common
  • Financial uncertainty in Europe is spreading as nine countries saw their Standard & Poor’s credit rating downgraded in January 2012.
  • The economy in China is slowing down and prices are increasing on imported goods.
  • Consumer confidence continues to be low

Welcome to the New Economy. What do I mean by the New Economy? In the past, periods of economic slowdowns were followed by calm seas and long periods of steep recovery. Today recoveries still occur but they’re more fragmented, shorter and less steep. Unfortunately the economy and business aren’t going to return to “the good old days any time soon, if ever. What we see is what we’ll be getting for the foreseeable future. For up to a decade or longer volatility, uncertainty, complexity and ambiguity (VUCA) will be our constant companions. The choice is to embrace the New Economy or surrender to it.

For many businesses the New Economy represents a real and present danger. To others it represents tremendous opportunity.

Which one are you?

As a business leader there are several options available to you for navigating this tough economy including:

  • Ignoring the economic mine fields and continue “business as usual”.
  • Taking a defensive approach by cutting costs and reducing spending until the crisis is over.
  • Taking advantage of the uncertainty in the marketplace and growing aggressively.

Which approach is best for your business? It depends. There is no “cookie cutter”, textbook response for surviving or thriving in the New Economy. We can look back at how businesses thrived in the Great Depression and in the down turns in the 1980s and 2000. You can also observe and learn from what thriving companies are doing now. These approaches can give clues but no approach will work unless you have a clear understanding of where your business is right now and where you see it going in the future. From those two perspectives you can begin assessing your marketplace, competitors, customers, employees and business operations to craft a strategic business plan. Your plan, strong leadership and effective execution are what you’ll need to survive and hopefully thrive in the New Economy.

Are You Committed to Leading Change?

leading changeA critical measure of success in leading change is your commitment.  Once you’ve weighed the options, given others a chance for input and settled on the best course of action.  You must be resolute, even passionate about your determination to follow through.  If you can’t be excited about where the organization is going, how can you expect your people to be.

Don’t try to reduce resistance by softening your position.  This is taken as a sign of weakness and becomes a rallying point for resisters. Keep in mind that in times of uncertainty, actions speak louder than words.  If pushed to the limit, you make have to make an example of someone who resists.  When this happens, make it a high profile person and make it public.  Your objective is to send a message to the others to get on board.

Change often has casualties.  This may seem heartless but it’s true. Resisters resist because they choose to do so.  They are the ones who put you in a position to choose them or the change effort.  If your change effort is worthy, the choice is an easy one.

In times of change, people gravitate to the people who have the most conviction about the future. Don’t initiate change you yourself aren’t committed to.  People will look to you for answers and to show them how to act.  If you’re certain, confident and act with congruence, they will follow.  If you lack those qualities, they will seek those that do.

Remember, you can’t manage change, you can only lead it.  When you lead change, people will follow.  So, if you’re in charge of change, lead it.  The resisters will either join the parade or voluntarily drop out.

Leading Organizational Change

leading organizational changeDue to the demands of the New Economy  organizational change is running ram­pant in corporate America.

Unfortunately, most of it isn’t working, or at least, not as well as it’s sup­posed to. Success of formal change programs in Fortune 1000 companies is rare. Reports indicate that more than half   are      disappointments or outright failures. Whether the change initiative is called, “reorganization,” “downsiz­ing,”or “re-engi­neering,” the results are the same.

The process usually starts with an enthusiastic top management push delivered to a skeptical group of employees. Then, meetings are scheduled, training conducted, until everyone is in­volved in the process. Unfortunately, the inevitable eventually hap­pens, commu­nications break down; mile­stones are missed; results don’t meet expectations; and manage­ment is left wondering what happened.

A Matter of Perspective

One of the core problems in leading organizational change is a simple matter of perspective. Management and em­ployees often view change differently. Management sees change as a challenge and an opportunity to strengthen the organization for the long haul.
For many employees, change is seen as disruptive and intrusive.  They didn’t seek it so they rarely welcome it. Change to them is threatening.

This difference of perspective is compounded by management misjudging the effort required to win acceptance of change. To avoid this problem, manag­ers at all levels must learn to view change through the eyes of their employees. This insight can give man­agement the leverage needed to move the change process forward.

New Rules

Resistance to change is rooted in a lack of under­stand­ing and in a loss of empowerment. Change means the rules have changed. Most people withhold support until they’ve figured out how the new game is going to be played. This usually occurs when people know the rules of the game and how the score is kept. Most people know how to win in the existing culture, but aren’t sure in the emerging culture. The quicker management can explain the new rules and show their people how to win, the sooner they’ll embrace the change.

The key here is understanding. For employees to under­stand the new rules, manage­ment must be prepared to answer several critical ques­tions. When change occurs, the first thing people want to know is “What’s going to happen to me?” This is a natural extension of a person’s self-preservation. People want answers when they feel threatened or unsure of their future. Even if its bad
news, people deserve answers. Keeping people in the dark only compounds the problem and increases their resistance.

Be committed to resolving the “WGTHTM” questions as quickly as possible. Giving people closure on these issues helps them move past resistance and begin focusing on the future.

Once the general issue of “What’s going to happen to me?” is resolved, management must answer the following questions more specifically:

  • What’s my job? (What am I supposed to do?)
  • What resources do I have? (What support can I expect?)
  • How will my job be evaluated? (What are the standards
    and how will I get feedback?)
  • How will I be compensated? (What financial rewards, recognition,
    and personal satisfaction will I receive?)
  • How hard will I really have to work and are the rewards
    worth it? (What’s needed to survive and thrive?)
  • Is this a place where I belong? (Are my values aligned
    with the organizations?)

These questions provide the explicit rules for winning in the new culture. Answering them resolves a lot of fears and anxiety that employees are apt to feel.  However, it usually takes some time for people to fully trust the new rules. That’s why most employees don’t fall in line until the unspoken rules of the game become clear and management answers the final question, “How do you really get things done?” Like teenagers testing a curfew, employees will test the stated rules until they know that they are real. Once this is accom­plished, people can start focusing on results instead of the rules. Even the best planned change effort can experi­ence resistance. And, manage­ment must be prepared to lead it.

Resistance is the most common side effect of change. Resistance is the organization’s way of main­taining the status quo. It’s a good barometer for mea­suring the impact of change, but it is not an appropriate gauge for measuring the appropriateness of change.  Just be­cause people resist change doesn’t make it bad.  When you initiate change, you will encounter resis­tance. Keeping this in mind, you’re able to handle resistance better as it occurs.

Remember, the 20%50%30% Rule

When change occurs, most people fall into one of three camps.

The first camp is those that embrace change and see it as an opportunity for growth. This group represents about 20 percent of the people.

The second camp is those people who are unde­cided about change. They try to be neutral until they figure which side of the fence they’re on. This group makes up about 50 percent of an organization.

The third camp is people who resist change. They fight it and often try to ensure that the change fails.  This group represents
about 30 percent of a group. Resisters are often responsible for holding the whole organization back because they usually
get the most attention from management. Unfortunately, paying undue attention to resisters only reinforces their nega­tive behavior. The more attention they get the more compelled they feel to justify their position. This often makes it even more difficult for an organization to move forward.

The key to leading organizational change is to focus on results. You may never get 100 percent buy-in from all people. For some, the buy-in can only come after they see results and have proof that the change was appropriate and successful.

Casey Stengel, the former manager of the New York Yankees, once said, “The secret to managing is to keep the guys who hate you away from the guys who are undecided.” This applies to business as well. A manager must decide to “win with their winners and not lose with their losers”.

Help People Understand Change

Education and communication are your first steps in defeating resistance. Give people the information and rationale that’s driving change. Also, relate the change to the organization’s mission and core values. Finally, help people see it from their perspective. It should make sense from where they sit.

Even when you explain it, everybody may not accept it. Some resisters reject anything that they don’t agree with. For these people, the goal is understanding, not necessarily agreement. If they understand, they can eventually accept it.  Some people won’t get it even after you’ve explained it several times. Don’t give up. ..keep communicating until they do get it. Remember, your job isn’t just to explain change, but to help people understand it.

Change Should Have A Purpose You’re Committed To

A clear mission and goals can be a good antidote for the fear that causes resis­tance. The clear­er and more compelling the future seems, the easier it is for people to leave their doubts behind. Aimless mis­ery is a tough sell. Make your change goals easy to see and provide a destination that makes the change seem worthwhile.

Once people realize that change is a done deal, their resistance usually fades away. When people realize you’re not just “giving change a try” they generally accept it.

Remember, it takes very little to keep the hope alive in the hearts of resisters. They continuously look for an opportunity to believe that the change isn’t for real.  Resisters won’t become believers until they see tangi­ble evidence that you mean what you say.

A critical measure of success in leading change is your commitment. Once you’ve weighed the options, given others a chance for input and settled on the best course of action. You must be resolute, even passion­ate about your determination to follow through.  If you can’t be excited about where the organization is going, how can you expect your people to be?

Don’t try to reduce resistance by softening your posi­tion. This is taken as a sign of weakness and becomes a rallying point for resisters. Keep in mind that in times of uncertainty, actions speak louder than words. If pushed to the limit, you may have to make an
example of someone who resists. When this happens, make it a high profile person and make it public. Your objective is to send a message to the others to get on board.

Change often has casualties. This may seem heart­less but it’s true. Resister resist because they choose to do so. They are the ones who put you in a position to choose them or the change effort. If your change effort is worthy, the choice is an easy one.

Be a Role Model

In times of change, people gravitate to the people who have the most conviction about the future. Certain­ty usually outweighs desirability. This is why resisters can win the hearts of the 50 percenters. Resisters often have more conviction to the resistance to change than managers have to the change effort.

Don’t initiate change you yourself aren’t committed to. People will look to you for answers and to show them how to act. If you’re certain, confident and act with congruence, they will follow. If you lack those qualities, they will seek those that do.

Remember, you can’t manage change, you can only lead it.  When you lead change, people will follow.  So, if you’re in charge of change, lead it. The resisters will either join the parade or voluntarily drop out.

Why Mistakes are Essential in Training Salespeople

As a trainer, you help your salespeople identify and work on skills that need strengthening.  You set up training programs because it is your responsibility to provide opportunities where salespeople try new behaviors and feel comfortable to fail.  That is, you encourage salespeople explore new techniques and skills in a neutral setting where mistakes are expected (even encouraged) and used as learning experiences.  Keep the formula below in mind when working with your people.

        MISTAKES + INSIGHT = LEARNING

Keeping the training focused is another way to insure successful training.  If you have salespeople work on too many skills at a time, they can become frustrated and de-motivated.  It’s usually a good idea to allow salespeople to master one skill before having them tackle another one.

To use the baseball analogy again, your interest as a manager lies not in the training but in how the training affects the overall ability of each player and of the team as a whole to perform.  You will initially select low-risk situations for the players to try new skills.  In this way, the chances for success and building confidence are high.  For example, you allow the pitcher to try a new pitch against the team in last place or against hitters with low batting averages or if his team has a comfortable lead in a game.  You would not let your pitcher try a new pitch in the ninth inning of a tied game in the World Series.

As a manager, your interest lies in how the new skill enhances the overall performance of the salespeople.  Once outside the training program, it is your responsibility to help salespeople initially selects opportunities where the risk of failure in using the new skill is relatively low.  This allows salespeople to achieve some immediate, initial success and builds their confidence.  Letting salespeople try new skills that are not fully developed on large accounts invites failure and a loss of confidence.