A Lever That Won’t Break

The Power of Pull covers a lot of interesting ideas about new ways to look at business and work, but one thing it brought up that I thought was very insightful has to do with levers.

Levers are a very handy tool and we use them all the time without thinking very much about them. If you’ve used scissors, nail clippers, tweezers, a crowbar, a hammer, or a wrench, you’ve used a lever. You push, squeeze, or pull a lever and you can now lift something heavier, cut something tougher, or turn something tighter than you normally could.

Sometimes though, if you push, squeeze, or pull too hard trying to lift something too heavy or cut something too tough, the lever can break. Cut something tough with cheap scissors and they break. Try to lift too heavy a boulder with a cheap or rotting 2×4, and it snaps.

Levers in Business

Debt is a kind of lever for business – with some of your own money and by also taking on debt, you can control more assets than with just your money alone. If you’ve ever put money down on a mortgage you’ve used debt as a financial lever.*

So, businesses use debt as a lever to create more value than they would without the debt. Well, as we’ve seen during this recent economic crisis, financial levers can break, with some pretty nasty consequences.

What if there was another kind of lever we could apply in business that didn’t break? What if it actually became stronger the more you applied it?

The lever that won’t break is Talent. Talent can actually become stronger when it is applied to a challenge, provided the company knows how to turn that challenge into an opportunity for collaboration and development.

Talent is a lever when it collaborates to overcome the challenge. When your talent collaborates, people are gaining the benefits of each others’ knowledge and experience without having to “go it alone” and figure it all out themselves.

As a result, the company creates more value than if people didn’t collaborate. In addition, the collaboration results in more development of the talent than otherwise would have occurred without collaboration.

Collaboration and the “Why”

But the collaboration I’m talking about is not just things like simple process decomposition.  It’s more than just task breakdown, with people performing their particular piece so some larger thing gets done.

It’s also more than people or teams simply exchanging information about facts and figures, plans and forecasts, process steps, etc. – that isn’t what I’m talking about either. You can write that kind of knowledge down and most of the time someone can pick it up and use it without ever having met you or discussed it with you.

The knowledge we’re talking about is the deeper knowledge of “why” – why we are doing something, why something works better one way versus another, and why something is important to consider. This knowledge can only really be exchanged or shared through a deeper level of collaboration.**

Talent, when it collaborates at that deeper level to achieve a shared purpose, provides capability leverage. Because now your company delivers more real value from your employees collaborating than if they had worked alone.

To reiterate, Talent that collaborates is the company’s lever.

And this is a lever that won’t break.

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* (Finance background) Financial leverage in a nutshell is the notion that you can reap larger returns on equity if you borrow at a lower interest rate than what your investment would return normally. You would borrow funds and you use those funds to increase assets (e.g. build a factory) or reduce outstanding equity (e.g. do a stock buyback.) In business, leverage, and its impact on return on equity (ROE), is represented by the (assets/equity) term in the famous Du Pont analysis equation:

(net income/equity) = (net income/sales) * (sales/assets) * (assets/equity)

You can see that increasing the ratio of assets to equity (by increasing debt), increases ROE (net income/equity).

So why not “leverage that sucker to the max”, you ask? That indeed is what financial institutions do – they are typically very highly leveraged. But what’s missing in the Du Pont equation is the notion of Risk. A company’s return on assets, i.e. (net income/assets) is never certain and if it falls below the interest rate far enough, long enough, or for debt levels large enough, the company can go under (i.e. the financial lever snaps.)

** (Epistemology background) This is the difference between “tacit knowledge” vs. “explicit knowledge.” “Tacit knowledge” is very hard to just write down and have somebody else just pick up and really “know” it. For example, designing complex machinery, riding a bike, or making that perfect soufflé all require things such as: time, teaching, practice, or mentoring. You often need a deep level of collaboration to transfer that  knowledge, or at least to make it happen faster. “Explicit knowledge” doesn’t need that collaboration nearly as much. For example, the elevation of Denver, the recommended torque for an engine bolt, and the process steps for turning on the air conditioner are all fairly straightforward facts or processes to communicate to others.

Photo by hans s

The Summertime HR Carnival is up!

Mark Stelzner over at Inflexion point has posted The HR Carnival – Summertime Edition.  Mark has assembled over 25 contributed posts on a huge range of HR topics and written a helpful, brief intro to each, so check it out.

Some notable posts include:

• Gautum Ghosh’s What does social CRM, enterprise 2.0 mean for hr and work?
• Dan McCarthy’s Establishing a culture of distributed leadership.
• Mike VanDervort’s Networking: It’s a small world after all
• Jennifer V. Miller’s Game-changers welcome resistance.

This Carnival of HR offers a terrific opportunity for you to get a great sample of a variety of perspectives, thinking, and just plain good writing. Who knows? Maybe you’ll discover a great blog you never heard of before.

Are your leadership competencies gender biased?

After a recent FWE&E event, I took a moment to meet Deborah Campbell from Catalyst.org and I’m so glad that I did.

She mentioned a study they did of Talent Management systems and how they were gender biased.  To be candid about it, I was a little shocked at the idea.

I can seriously think of few functions more interested in equality, than Talent.

So I took a look at the report myself, and I realized how this could happen, it’s really similar to my own gender bias.  The truth is that, in most organizations, the idea of leadership has a strong masculine undertone.

This comes more from ethnocentrism than from malice.

Today’s reality is, that most senior leaders are men, and when they define the values that feel important to leadership they can’t help but describe themselves.

Those leadership values then shape the measurement of talent (typically through ratings of performance and potential) and those biases lead to the logical end result, a very small population of women senior leaders.

If you find yourself thinking that your pipeline of women leaders feels underrepresented, consider these two suggestions

• Review your leadership competencies to make sure that stereotypically male attributes do not dominate (e.g.,  action oriented, results driven) and that important  stereotypically female attributes are not excluded (e.g., collaborative and visionary).
• Considering doing Talent Reviews with a broader population of the workforce, so that additional hidden talent can be identified earlier for leadership grooming.

I strongly recommend that you give this report a read if you are interested in building a larger and more diverse pipeline to your leadership succession plans.

I’d also like to give my thanks to the Catalyst organization who are doing an amazing job to educate us all.

http://en.wikipedia.org/wiki/Ethnocentrism

Have you done your performance review yet?

Well, folks, we are in the midst of our annual performance review season.  You won’t guess the Number 1 question I get asked (well, maybe you’re smart and you will guess it):  why should I do a performance appraisal?  What’s in it for me?

Sadly, most people take a selfish and purely financial view of the corporate world.  If the performance review doesn’t result an any salary increment, then why do it?  What’s the point?  And that is one possible view of the world.  To those people, I ask:  aren’t you interested in getting any feedback about how well you’ve done over the past year?  Don’t you want to know if you’ve done anything badly?  Or something that you could learn to do better in the year ahead? 

Don’t you want to grow your own skills and competencies?  Or would you rather just sit, like a lump of coal, and do nothing with your career and with your life. 

Since you’re spending at least 40 hours a week at work, and perhaps significantly more, wouldn’t you want to be happy and motivated and fulfilled and flooded with energy every morning as you wake up?  Or would you rather sit around and moan about your manager and your co-workers and let the world wash over you? 

Now, some folks might like to let the world wash over them.  They’re not interested in feedback.  They’re not interested in developing themselves and their careers.  And I say:  good luck to them.  Because it’s pure luck that they have managed to keep their jobs during the GFC and it’s pure luck that their manager still thinks that the employee should stay on.  In fact, what do those employees know anyway?  They’ve never bothered to wonder; they’ve never bothered to ask.

So, look around you, take stock of your world, and get stuck into your performance review.  Don’t make it tedious and boring — make it your chance to shine and your chance to get some realistic feedback about where you are and where you want to go.  Put lots of detailed, specific evidence in about your achievements during the year (you’ve saved all those laudatory emails, remember?).  And ask your manager about how you can go further and take it to the next level.  I bet they’ll be happy that you’ve shown the interest, that you want to be successful and that you want the best for yourself and your career.

In thanks of fathers

I'm the younger one.

In all my research on the rights and progress of women, I have noticed that a key factor is men.  Having strong men, who support women, makes a big impact.

I have been very lucky to have great men supporting me throughout my life.  The most important is, of course, my dad.

I feel very grateful to have had the unique experience of having been raised by a single father.  As I reflect on the men I have known in their mid-twenties, I can think of very few who would be up to such a challenge.  Having such a father, has set the gold standard in my world.

Being raised by a father gives you a very unique set of experiences, being raised by my father even more so.

While not a complete list, here are some experiences and learnings I am pretty sure are uniquely mine.

• How to take seriously the “watch your step” advice, in that there might be nails, tools, paint supplies or various other projects going on in the living room, that could injure life or limb.

• To be convinced that, while I was not keen on the idea of shooting a gun, learning how to remove the magazine and check the chamber for bullets, might be a useful skill.

• How to not only change a tire, but also oil, points, plugs, etc. (and how to get a paying job such that you never have to do any of the above!)

• That roller skates, trikes and bikes are perfectly suitable for use in the house, all you need to do is have a plan to re-do the walls when the children get older.

• It is important to have a couch near the indoor swing and trapeze, so that kids don’t hurt themselves when jumping off mid-flight.

• Sending a daughter out of state for college, should include matching Chilton auto repair manuals, so that you can point out page numbers of import when the car wont start.  Numbered photos of the car engine are also helpful.

• You need not restrict yourself to traditional solutions to problems, instead open your mind to creative options like moving walls in the house, cutting off the feet on the jammies, painting the word “oil” and “transmission” on the respective caps with nail polish, etc.

• Just because you have not been formally trained on something does not mean you cannot learn a new skill.  In most cases a library card and practice can get the job done.

For all of this and more, I would like to send my father’s day wishes to all the daddies out there.  Especially mine, who happens to be one of the only readers of this blog.

With love!

Using your strengths to help others

Last weeks HR Happy Hour featured Dave Ulrich talking about his new book, the Why of Work.

Through our work, we seek a sense of purpose, contribution, connection, value, and hope. When we achieve meaning through our work, we succeed beyond our wildest dreams.

As usual, the show included great conversation, giggles and a fun back channel on Twitter (#HRHappyHour).

I found the discussion about strengths very powerful.  I’m sure this is not surprising to anyone who knows me,  I’m all about leveraging strengths.

Dave gave two solid points about strengths to keep in mind, when looking to create meaning in work .

First: As a leader you need to help your team use their strengths to do their jobs better.

Second: As an individual, you need to build your own strengths, that will strengthen others.  If you work on strengths that are not in pursuit of helping others, it will not be sustainable and you will not be developing meaning.

He then talked about how you need to think in terms of using your strengths to serve the company to build a stronger organizational capability.

Great stuff, I think I’m going to have to add this to my* reading list!  Mark…

__________

*It is well known that most of “my” reading is actually done by Mark… I told you, I’m all about Strengths

What emotional stake do you have in your business?

I’m happy to see that there is an HBR discussion going on about how hating (or loving) HR is not really the point.

Bill Taylor points out that

The real problem is that too many organizations aren’t as demanding, as rigorous, as creative about the human element in business as they are about finance, marketing, and R&D.

and that as leaders we need to

create an environment in which everyone in the organization can share ideas, solve problems, and develop a psychological and emotional stake in the enterprise.

My question to you is what do you do, for yourself and for your team, to create that connection between the business goals of your company and the abilities you represent?

If you don’t have a good answer to this question, I suggest you take some time to work that out.

Two Carnivals of HR are up!

There are two new Carnivals of HR up. The first is last week’s HR Freaks carnival, posted by Erik Samdahl. Erik has assembled 30 contributed posts on a huge range of HR topics and written a helpful, brief intro to each, so check it out. All the posts are great, but we’d like to call out:

• Michael Haid’s How to Hire for Cultural Fit.
• Mary Jo Asmus’ Now, Embrace Your Weaknesses.
• Mark Vickers’ The Crummy State of Talent Management Metrics (and What to Do About It).
• Cathy Missildine-Martin’s Why Does Strategy Puddle Instead of Trickle?

The next Carnival of HR is this week’s Social Media Edition, brought to you by Trish McFarlane. Trish has assembled a bunch of great posts about ways in which people have proven value from social media in their business and provided a great introduction to each. Here are some notable ones:

• Bill Boorman’s Stop the Social Recruiting BS.
• Ben Eubanks’ ‘That Social Media Thing‘.
• Lyn Hoyt’s  Our Slow Move Online and Discovery of Social Media.
• Kevin Grossman’s ‘Don’t Over-think Your Social Media Efforts.  Keep It Simple, Real, and Human.’

Both of these Carnivals of HR offer a terrific opportunity for you to get a great sample of a variety of perspectives, thinking, and just plain good writing. Who knows? Maybe you’ll discover a great blog you never heard of before.

The June Leadership Development Carnival is up!

Chris Young over at The Rainmaker Group has posted the June Leadership Development Carnival. Chris has assembled over 30 contributed posts on a huge range of Leadership topics and has also written a helpful, brief intro to each, so check it out.

Some notable posts include:

• Mark Stelzner’s Twitter 101 for HR.
• Working Girl’s Diversity and good management.
• Jason Seiden’s Seiden’s 16 Rules for Giving Feedback.
• Dan McCarthy’s A View from Inside the Leadership Pipeline.
• Jennifer Miller’s Redemption.

This Leadership Development Carnival offers a terrific opportunity for you to get a great sample of a variety of perspectives, thinking, and just plain good writing. Who knows? Maybe you’ll discover a great blog you never heard of before.