June 2009

Three Ways to Avoid Becoming a Turnover Statistic

June 26, 2009 by Marshall Goldsmith   Comments (0)

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leadership, career


I was recently asked this question about high turnover among executives:
image"While moving up the organization, I've noticed a high turnover in the senior ranks. It seems like a lot of talented people who were once successful fail to make the grade. How can I increase the likelihood that I will not end up like these casualties?"
This is a significant challenge for executives today. How can you avoid being another turnover casualty? Nat Stoddard and Claire Wyckoff recently wrote about this in their new book The Right Leader: Selecting Executives that Fit. I asked them to give us their take on this question.
Nat and Claire: Your reader's observation is absolutely correct. Over 64 percent of new CEOs (whose data is most readily available) fail to make it through their fourth year in the job, while 40 percent are gone in 18 months. Turnover rates for all senior executives have increased significantly during the past decade — in excess of 50 percent. In fact, they're up over three times the rate that they were throughout most of the 1990s.
The problem is not that executives can't do their jobs. The problem often lies in the fact that they may not fit the situation well enough to deliver the changes expected of them. By "fit" we mean how well an executives' character (especially their values and beliefs) aligns with the culture of the company where the necessary and expected changes must be delivered. If the character of the leader is not closely aligned with that of the organization, then, as Peter Drucker originally pointed out, followership will not occur — people won't trust a leader who doesn't share their values, and, without trust, they will not follow him or her. It is this lack of proper "fit" that causes so many senior executives to fail.

When you're considering a promotion or a move, the key is to ensure not only that your skills and abilities match up with the needs of the organization, but that you fit well with the organization's culture. There are three things to consider: the culture of the organization at large, that of the team of which you will be a member, and that of the team you'll be expected to lead.
The following are a few suggestions for reducing the risks of becoming a casualty of cultural conflict:
1. Know thyself. We encourage candidates to take a number of psychological and behavioral assessments. It is vital to understand yourself as fully as possible — especially your business-related beliefs and decision-making processes. It's also helpful to identify those aspects of different cultures that you relate to and those you don't. Write them down and refer to them as you gather data about the opportunities under consideration.

2. Inquire about the cultures at hand.
Do the people you are interviewing treat culture as "that soft 'people' stuff?" That in itself tells you a great deal about the relative importance of culture in this organization, and its members' understanding of the challenges facing newly appointed leaders like yourself.
3. Use your network to verify what you have observed about the company's cultures. Former employees, suppliers, or consultants can shed light on what you will actually encounter. You can also ask to obtain permission to talk to a few potential peers, direct reports, your boss's boss, and members of the board. Think through the questions you want to ask about "how things get done around here" to get a sense of how much agreement there is about the makeup of the organization's culture.
Remember, while a new situation may seem like the perfect match, failing to fit adequately with the company cultures you encounter will increase your chances of becoming a turnover statistic. What's more, the higher up you go in any organization, the more important fit becomes — and the more difficult it is to recover from a situation that "just didn't work out."
Thank you, Nat and Claire! Readers, I'd love your comments on culture, fit, and turnover.
Life is good.
Marshall
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How to Manage Anger During Stress

June 24, 2009 by Marshall Goldsmith   Comments (0)

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relationship, leadership

I recently was asked about how to control anger, especially in the workplace with all the stress people feel from the economic crisis.

Anger can distort our self-perceptions and do harm to the relationships with people important to imageus, both inside and outside of work. Handling our emotions is a tricky process if we don't have the proper self-management skills. I've asked Mark Maraia, a relationship development coach and trainer who works with people, specifically partners in large law firms, on just such issues as yours. Here's his response:

MM: I'm often asked, "How do I stop from getting angry?" And the answer I give is, "You don't. What you need to learn is a process for releasing the emotion."

Most people are trying to control or manage their anger. It never occurs to them that they can release it--completely! Stifling our feelings or our urges to act out in anger doesn't work. People can read us sometimes better than we can ourselves. Stifling our feelings will work against us because when we deny or suppress anger, we end up projecting it. Either we turn it inward, which leads to depression or disease, or we turn it outward, which leads to many of the annoying habits Marshall discusses in his book, What Got You Here Won't Get You There.

My own path of self-discovery led me to a startling conclusion: We don't get angry at facts; we get angry at our interpretation of facts. This means, that we have a choice about how we respond to an event or person that triggers our anger. We're going to get angry - this is a perfectly natural emotion. The problem isn't our anger; it's our attempt to justify it rather than release it. Let's be clear: if you put energy into justifying your anger you CAN'T release it. However, most people find anger or intense rage unpleasant and are highly motivated to rid themselves of it.

When people are hijacked by their anger, I ask them: What process do you have (in the moment) for dealing with negative emotions like anger? Most people don't have an answer. Some have coping mechanisms, such as stifling or projecting; some use physical exercise, which is useful, but not so much in the moment.

I've learned a thought process for dealing with negative emotions that I have practiced for more than 20 years. Anyone can use this tool to deal with negative emotions "in the moment" and later if the negative feeling resurfaces. This is a process of rejecting the negative emotion and it actually interrupts this "doom loop." Rejecting negative emotions can be used in many situations, both personal and business, in the moment -- without anyone knowing you're doing it!

Here's how it works. The next time you are overcome with a negative emotion, ask yourself this question: "What am I feeling at this moment?" Get in touch with the feeling or emotion first. Once you've done that, make a silent declaration to yourself that you don't want it anymore! For instance, when someone dangerously cuts you off on the freeway, your thought might be: "I do not want this anger" (or "rage," if it's that bad).

Then, replace the feeling with a constructive thought. In this way you make a conscious choice to have a positive state of mind. Your thought might be: "I do not want this anger. I choose to be at peace instead."

This new skill will take practice. It will probably feel awkward at first. But with enough practice iimaget will become a habit and you will find yourself working through negative emotions in minutes or hours rather than obsessing for days, weeks, or years!

Readers - Do you have difficulties releasing negative emotions? If so, please try this thought process and send your comments on how it works for you! If you would like to ask Mark a question, he can be reached at mark@markmaraia.com. I know that it is tough out there for many people today. Many of you have a right to feel angry. My advice is simple - change what you can - and do your best to 'make peace' with what you cannot change.

Surviving in Turbulent Times

June 14, 2009 by Marshall Goldsmith   Comments (0)

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leadership, career

I was recently asked the following question: "The economy will always have its ups and downs. That's why our company has two playbooks: one for running the company in an up period and another in a down period. If we enter a down period, we immediately switch to the down period playbook with its set of well-defined behaviors. Is this a good idea? And can a company still make money during bad times?"

facing changeTo answer your question, I decided to turn to Philip Kotler, the well-known marketing guru at the Kellogg School of Management, Northwestern University. Phillip has just recently published a book with John Caslione called Chaotics: The Business of Managing and Marketing in the Age of Turbulence. Here's his advice:

PK: Having two playbooks, one for good times and one for bad times, is a good start but far from sufficient. For example, at the start of a downturn, companies tend to cut their hiring, advertising, and new product development. But to do this mechanically without addressing the causes of the downturn, the actions of their competitors, and the perceived length and depth of the crisis doesn't make sense. I am against robot responses.

A company can make money in bad times. Some companies will be favored because they are known to offer good value for a low price, such as Wal-Mart and McDonald's. Their sales will increase and although their profits might be lower than in good times, they will do fairly well.

Other companies have a number of options:

  • Lower your prices to create a better ratio of value to price. You can lower your list prices or initiate more sale promotions (discounts, two for the price of one, etc.)
  • Introduce a lower-cost version of your offering where you have removed some features or benefits. It will probably cannibalize your higher priced offer, but it is better to cannibalize yourself than to have competitors do this to you.
  • Add some additional benefits to your standard offer. Offer free shipment, extend your guarantee, or create a more generous return policy. In the latter case, Hyundai recently offered to take back a purchased car if the buyer loses his or her job. GM and Ford have offered to make the laid-off car-buyer's payments for them.

In taking any of these steps, make sure that your company doesn't dent the favorable aspects that have drawn customers to prefer and respect it. For example, a company that is admired for its level of service should never cut its service quality and risk losing this point of differentiation and preference. The key is to understand your customers' new problems and to consider how you can help them solve or resolve these problems. You have to coach your customer about possible solutions.

These are some ways to respond to the current downturn. But what about anticipating the next one? Every company is vulnerable not only to an economic downturn but to other disruptions that may come from technological change or from new global competitors. So the question becomes: how can companies do a better job of anticipating disruption? Companies generally do a poor job of monitoring the environment for clues to these threats. They lack an early warning system that might pick up weak signals of change. An early warning system would greatly reduce the level of surprise and chaos felt by a company that was too naïve.

The company then has to go further and imagine additional possibilities even before there is a sign that they might be taking place. For example, General Motors might ask: "What if China finds a way to make a battery that can hold a charge for 200 miles instead of the 90 miles that we are hoping to get out of our new battery?" A company must imagine new surprises.

Business is now exposed to continuous turbulence, not occasional turbulence. We aren't going back to normal times. The "new normality" is one of turbulence coming from two big forces, namely technological advances and globalization. All this spells higher risk and vulnerability.

There is a little rainbow in all of this. Change presents opportunity as well as vulnerability. The companies that succeed are those who look more at the opportunity side than the vulnerability side. If your company is having trouble, so are your competitors. If you are better funded, you can initiate lower prices or better benefits that they can't match. You can end up buying some of your competitors or putting them out of business.

Your customers, suppliers, and distributors are all suffering. Think about how to help them. Think about developing a new business model, a new product or service, a lower cost distribution channel, a lower cost supply chain. Rather than just relying on a rulebook, be more robust, resilient, and responsive to changing conditions.

MG: Thank you for Philip! Readers, for more on responding to the challenges of increased turbulence, please go to www.chaoticsstrategy.com. Please send in your comments about how your company is making money in today's economy.