I’ll get to that question in a minute, but first let me share a personal story.  I continue to be surprised by some of the misconceptions that people have about flying.  This past weekend I was in a conversation with a man who had a friend that was a pilot of a small plane.  This man’s friend took off on a trip cross country and not too far along he had an instrument failure.  The plane did not crash, but the man who told me about it obviously felt some dire anxiety for his friend and his “close call”.  I mentioned to the man that I was a pilot and that about half of all pilots do not have an instrument rating.  Even those who do don’t always choose to file an instrument flight plan, especially if they don’t plan to fly through clouds or in bad weather.

The majority of flying in small planes takes place under what are called visual flight rules:  the pilot is responsible to stay clear of clouds and to see and avoid other traffic–any other planes, helicopters, gliders or balloons that share the skies.  In fact, a competent, well-trained pilot of small planes should be able to fly their plane safely without ever having to look at the instruments.

If that’s the case, why do planes have instruments?  In a word: options.  Instruments (or other measurement systems) give us more options, and usually they offer greater accuracy.

Let’s continue our lesson from flying planes.  When a pilot receives flight training in flying by instruments, one of the first things an instructor will do is demonstrate how easy it is to trick or disorient a pilot once you remove visual cues.  Every pilot must face the humbling lesson that they are not the exception to the rule: disorientation can happen pretty easily, and if you fly in clouds or fog or at night in the mountains in a fairly short amount of time you will lose your way and get yourself in a position you don’t want to be in.  Flying by the seat of your pants, or gut instinct may sound macho or reasonable, but it’s not going to keep you alive in bad weather or when visual references are gone.

When you’re responsible for running an organization (or even a division or large team), the same rules apply.  Through years of experience you may have developed pretty good instincts or a seat-of-the-pants intuitive feel for making decisions and exercising leadership.  But what happens when the external environment suddenly changes, or a new generation with different expectations joins the workforce (and your organization), or a game-changing technology threatens your market space?  The old familiar references are gone or obscured, and if you don’t have instruments, measures or a backup system…a happy outcome is NOT very likely.

Let’s deal with another misconception here.  Any non-pilot who has looked in on a cockpit has probably been overwhelmed by the amount of instruments, dials, levers and buttons they see there.  An airliner is the extreme case, but even a small plane cockpit is daunting or mysterious to the non-pilot.  The truth is, even inexperienced pilots get overwhelmed or transfixed by the instruments in the cockpit until they develop some discipline.  There are a few primary instruments that you must use, and the rest give you additional information or other options if you need them.  The most basic–and essential, or useful–flight instruments are a compass, a clock, and your engine gauges.  A compass tells you direction and warns of drift; it is an underrated instrument.  A clock allows you to keep from running out of fuel (more predictably than fuel gauges!), make time/distance/fuel calculations, and time turns (which is important if you get into bad weather).  Engine gauges indicate engine health and performance; they give you warnings of when your plane is about to become a glider (an extremely useful piece of information).

Think about your business.  What metric/measurement helps you stay oriented the right direction?  Which metric/measurement gives the most useful information about performance, telling you you’re making good progress or warning you that you’re running out of gas?  How do you measure and keep time in your business?  Every good manager knows their three critical numbers and the other numbers that give more accuracy and specialized information.

Leaders also have a backup system for when the game suddenly changes.  Being clear on your own vision and values is the essential first step.  A well-considered strategic plan is the next step.  If these are clear, your judgment and decision making in stressful situations will be much better.  Backup systems anticipate contingencies or emergencies:  scenario planning, disaster recovery plans, succession planning, risk management plans and systems, leadership development and employee training are some of the best examples of ways to be prepared when the ground shifts underneath you and taking the right action is critical.

Flying an airplane and running a business or leading a team are not overly complex, though we can certainly make the task more complicated than it needs to be.  With the right orientation, measures and backup systems in place, these can be enjoyable and fulfilling endeavors.

‘The Irrational Side of Change Management’

Let people write their own story

Employees are what they think and believe in

Yesterday  John Mack, Chairman and CEO of Morgan Stanley told his shareholders that he has to pay employees well to keep top talent and grow the business, but he doesn’t see the ability to sustain that into the future.  The average bonus paid per employee in 2008 at Morgan Stanley was $143,000.  They have seen this as the cost of attracting top talent to the firm. 

The problem is that this is expensive and difficult to sustain, especially for huge companies the size of Morgan Stanley.  Mack referred to a phone call he had with a hedge fund manager who told him:  “I can hire anyone from you (Morgan Stanley) or Goldman Sachs…”, to which Mr. Mack had no real answer.  The chairman and CEO of a Fortune 100 company admits that he has no real clue about how to keep top talent when faced with an extension of his own strategy, which amounts to a bidding war. 

Here’s an idea:  pay people fairly for their talent, but don’t try to flatter their egos with excessive money.  That attracts the wrong kind of people.  Instead, focus on developing a team of people who embrace deeply what the company is about and are trained or equipped to deliver on that core mission.  Developing top talent is not really a money game unless you have deep pockets and are looking for mercenaries; it’s actually a discipline that top managers pursue and hone over time to produce sustainable results.

I found it interesting that Goldman Sachs wanted to quickly return some of the government money it took last fall, partly so they would not be limited by government meddling in their compensation/bonus policies.  CEO Lloyd Blankfein knows that Goldman’s business model is based on generous financial rewards to top performers.  Other investment banks have said compensation caps will cause a flight of top talent.  Maybe multi-million dollar compensation only buys temporary rather than enduring loyalty.   They don’t call it a “money culture” without reason, and when the money isn’t flowing, the talent may not stick around.

Contrast that with the approach taken by Zappos.  The online retailer has quietly grown to $1billion in sales and in the process has built a culture that looks a lot like the exuberant workplaces of the dotcom era.  Zappos CEO Tony Hsieh has focused on building a culture devoted to customer service and employee engagement.  Zappos gives a lot of attention to recruitment and training-hallmarks of firms that are committed to truly developing top talent.  Employees have some degree of latitude in making sure customers are satisfied, and Zappos has a very high number of repeat customers and they are still growing, even in a serious economic downturn. 

Developing a culture and keeping top talent doesn’t happen automatically and it’s not something that is simply fixed with money.  Oh, if only it were that easy.  But it is doable and companies like Zappos are showing it may be one of the few paths to competitive and strategic distinction.

I won’t go into all the background here about aikido (*see the footnote below if you’re interested).  Since we don’t have competitions or tournaments in aikido, testing (and the training that leads up to that) is one of the times when we are able to assess what we have learned and how much more there is to learn.  Besides demonstrating specific techniques that are called out early on, the last part of the test involves multiple attackers coming at you from all directions and you have to effectively deal with each attack without injuring yourself or anyone else.  It is a true test of poise under pressure.

What does this have to do with talent?  Aikido emphasizes constant development over time through practice.  You learn about your own fears and limits and abilities by practicing with many different partners of different ability levels.    Since I’ve been practicing for over 10 years, I’ve seen a lot of people come through the various dojos where I’ve studied.  Some people are naturally gifted.  Others clearly are not.  Both benefit greatly through regular practice. 

It is the same with talent in organizations.  Some people are more talented than others, but if there is no real contest then there is nothing to prove.  The emphasis can shift from competitive ”games” and politics to learning and development.  We are all on a path, we will all face a test and the real question is how will you perform under pressure?   I believe that organizations whose cultures resemble a dojo more than an alley are going to do a much better job of attracting and retaining the right kind of talent to be truly competitive and productive over time.  What do you think?

*aikido is a Japanese martial art that emphasizes a non-violent and peaceful resolution of conflict; it’s also a rigorous practice that works on multiple levels-physically, emotionally, spiritually-depending on what a practitioner is looking for.  For more information you can google “aikido” and finds lots of information (and lots of misinformation) on the web.  I recommend you watch a class or demonstration if you ever get the chance.

From the employee side, there is a natural concern about fairness and favoritism; will Talent Management (TM) be administered fairly and give everyone an equal chance to succeed?  Will it be a cover for leaders who are championing/grooming/promoting their own favorites?

Also, most TM efforts or programs have some kind of measurement included with them.  Some of those include personal profiles or talent assessments.  Some people have a natural fear about how those will be viewed or used by management.  Other measurements are more tied to performance management or productivity or contribution to the company.  Some employees don’t like the additional scrutiny that comes with measurement–period.

Honestly, a lot of “talent management” efforts are really HR-sponsored drives that are modest in their goals/design and don’t have real staying power.  Employees have a legitimate right to question if TM is a “flavor of the year” hobby that will be eventually abandoned in 12-24 months.  That often seems to be what happens unless management is fully committed to it and is willing to make it a robust, long-lasting change in how the organization thinks about and practices talent management.

Of course, I encourage leaders who are committed to developing top talent to exercise some empathy and think first about how their efforts are going to be received by employees.  It can avoid a lot of pain and waste later on.

MPG Instrument

I recently bought a new car and it has a sensitive gauge that tells you how many miles-per-gallon you are getting at the present time.  I’m already paying more attention to this gauge and it has helped me in changing my driving habits for the better (to be more fuel-efficient).

Apply this to people in an organization–even a small one–and it becomes obvious that equipping people with a new tool is much more likely to yield change than talking about change, management lectures or internal communication initiatiaves.  These other activities are useful too, but I’ve seen too many leaders and companies rely on them and end up with very little meaningful change.

Like any new tool, you have to learn to use it properly.  When I took training to be a pilot, I initially spent too much time looking at the instruments-I assumed that’s how you fly the plane.  My instructor had to emphasize to get my head up and look outside the airplane.  The great majority of pilots of small planes fly visually by looking out the window 90% of the time.  Only instrument-rated pilots and airline captains fly solely by reference to the instruments, which is a much more mentally taxing activity that requires extra training, practice and licensing.  So here’s my caveat: when you get an instrument for measuring real-time performance, beware the tendency to stare at it and miss the other information and contextual clues about what is going on around you.  If you can learn to do that (and it is possible), you will be much better positioned to build a high-performing organization and drive results and accountability further down to the individuals that actually do the work.

I like fresh and innovative thinkers, especially in the field of management.  Steve Byrum is one of those guys, and his book From the Neck Up:  The Recovery and Sustaining of the Human Element in Organizations (2006) is a refreshing read.  In it he looks at the work of Frederick Taylor (the father of Scientific Management) and Robert Hartman (the father of Formal Axiology) and draws some very interesting comparisons and contrasts.

Taylor was concerned about finding the one right way to do things, and the focus was on efficiency.  Under Taylorism the human element too often has gotten reduced to just a “cog in the wheel” of the system.  Human beings were best replaced by automation and robots wherever possible.  That may be oversimplifying, but it captures the essence.

Hartman was a philosopher concerned with defining what exactly “goodness” is.  His discoveries led to the founding of a new field called value science.  Hartman placed great importance on the human element in organizations.  He affirmed this through promoting the practice of profit sharing and through his consulting with several large corporations in the 1950′s and 60′s.  Hartman was interested in organizing goodness; the modern term of “adding value” (in all dimensions) has many deep resonances with Hartman’s ideas.   He saw it as possible and desirable to align people, processes and materials in a way that was effective, efficient and ultimately affirming of the people involved in the enterprise.

There are many insights in this 150 page book that would reward a few hours of reading.  The only drawback is that the book is not readily available (either in bookstores or online).  You can reach Steve Byrum directly and order a copy from the Byrum Consulting Group at (423) 886-5587.