The mindsets and practices of excellent CEOs

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on augusti 17th, 2022 by admin
The CEO’s job is as difficult as it is important. Here is a guide to how the best CEOs think and act.
Acompany has only one peerless role: chief executive officer. It’s the most powerful and sought-after title in business, more exciting, rewarding, and influential than any other. What the CEO controls—the company’s biggest moves—accounts for 45 percent of a company’s performance. Despite the luster of the role, serving as a CEO can be all-consuming, lonely, and stressful. Just three in five newly appointed CEOs live up to performance expectations in their first 18 months on the job. The high standards and broad expectations of directors, shareholders, customers, and employees create an environment of relentless scrutiny in which one move can dramatically make or derail an accomplished career.For all the scrutiny of the CEO’s role, though, little is solidly understood about what CEOs really do to excel. McKinsey’s longtime leader, Marvin Bower, considered the CEO’s job so specialized that he felt executives could prepare for the post only by holding it. Many of the CEOs we’ve worked with have expressed similar views. In their experience, even asking other CEOs how to approach the job doesn’t help, because suggestions vary greatly once they go beyond high-level advice such as “set the strategy,” “shape the culture,” and “get the right team.” Perhaps that’s not surprising—industry contexts differ, as do leadership preferences—but it illustrates that fellow CEOs don’t necessarily make reliable guides.

Nor has academic and other research on the CEO’s role done much to illuminate how CEOs think and what they do to excel. For example, recent studies that detail how CEOs spend their time don’t show the difference between a good use of time and a bad one. Academic research also demonstrates that traits such as drive, resilience, and risk tolerance make CEOs more successful. This insight is helpful during a search for a new CEO, but it’s hardly one that sitting CEOs can use to improve their performance. Other research has tended to produce such findings as the observation that leaders are effective in some situations and ineffective in others—interesting, but less than instructive.
With this article, we set out to show which mindsets and practices are proven to make CEOs most effective. It is the fruit of a long-running effort to study performance data on thousands of CEOs, revisit our firsthand experience helping CEOs enhance their leadership approaches, and extract a set of empirical, broadly applicable insights on how excellent CEOs think and act. We also offer a self-assessment guide to help CEOs (and CEO watchers, such as boards of directors) determine how closely they adhere to the mindsets and practices that are closely associated with superior CEO performance. Our hope is that all CEOs, new or long-tenured, can use these tools to better apply their scarce time and energy.

A model for CEO excellence

To answer the question, “What are the mindsets and practices of excellent CEOs?,” we started with the six main elements of the CEO’s job—elements touched on in virtually all literature about the role: setting the strategy, aligning the organization, leading the top team, working with the board, being the face of the company to external stakeholders, and managing one’s own time and energy. We then broke those down into 18 specific responsibilities that fall exclusively to the CEO. For example, setting a corporate strategy requires that the CEO make the final call on an overall vision, a set of strategic moves, and the allocation of capital.

Focusing on those 18 responsibilities, we conducted extensive research to determine what mindsets and practices distinguish excellent CEOs. We mined our proprietary database on CEO performance, which is the largest of its kind, containing 25 years’ worth of data on 7,800 CEOs from 3,500 public companies across 70 countries and 24 industries. We also drew on what we’ve learned from helping hundreds of CEOs to excel, from preparing for the job and transitioning into it, through navigating difficult decisions and moments of truth, to handing their responsibilities over to a successor.

The result of these efforts is a model for CEO excellence, which prescribes mindsets and practices that are especially likely to help CEOs succeed at their particular duties. What follows is a detailed look at these mindsets and practices. Although our findings are most relevant to CEOs of large public companies, owing to our research base, many will also apply to CEOs of other bodies, including private companies, public-sector organizations, and not-for-profit institutions.

Corporate strategy: Focus on beating the odds

It’s incumbent on the leader to set the direction for the company—to have a plan in the face of uncertainty. One way that CEOs try to reduce strategic uncertainty is to focus on options with the firmest business cases. Research shows, however, that this approach delivers another sort of outcome: the dreaded “hockey stick” effect, consisting of a projected dip in next year’s budget, followed by a promise of success, which never occurs. A more realistic approach recognizes that 10 percent of companies create 90 percent of the total economic profit (profit after subtracting the cost of capital), and that only one in 12 companies moves from being an average performer to a top-quintile performer over a ten-year period. The odds of making the jump from average to outstanding might be long, but CEOs can greatly increase the probability of beating those odds by adhering to these practices:

Vision: Reframe what winning means. The CEO is the ultimate decision maker when it comes to setting a company’s vision (where do we want to be in five, ten, or 15 years?). Good CEOs do this by considering their mandate and expectations (from the board, investors, employees, and other stakeholders), the relative strengths and purpose of their company, a clear understanding of what enables the business to generate value, opportunities and trends in the marketplace, and their personal aspirations and values. The best go one step further and reframe the reference point for success. For example, instead of a manufacturer aspiring to be number one in the industry, the CEO can broaden the objective to be in the top quartile among all industrials. Such a reframing acknowledges that companies compete for talent, capital, and influence on a bigger stage than their industry. It casts key performance measures such as margin, cash flow, and organizational health in a different light, thereby cutting through the biases and social dynamics that can lead to complacency.

Strategy: Make bold moves early. According to McKinsey research, five bold strategic moves best correlate with success: resource reallocation; programmatic mergers, acquisitions, and divestitures; capital expenditure; productivity improvements; and differentiation improvements (the latter three measured relative to a company’s industry). To move “boldly” is to shift at least 30 percent more than the industry median. Making one or two bold moves more than doubles the likelihood of rising from the middle quintiles of economic profit to the top quintile, and making three or more bold moves makes such a rise six times more likely. Furthermore, CEOs who make these moves earlier in their tenure outperform those who move later, and those who do so multiple times in their tenure avoid an otherwise common decline in performance. Not surprisingly, data also show that externally hired CEOs are more likely to move with boldness and speed than those promoted from within an organization. CEOs who are promoted from internal roles should explicitly ask and answer the question, “What would an outsider do?” as they determine their strategic moves.

Resource allocation: Stay active. Resource reallocation isn’t just a bold strategic move on its own; it’s also an essential enabler of the other strategic moves. Companies that reallocate more than 50 percent of their capital expenditures among business units over ten years create 50 percent more value than companies that reallocate more slowly. The benefit of this approach might seem obvious, yet a third of companies reallocate a mere 1 percent of their capital from year to year. Furthermore, research using our CEO database found that the top decile of high performing CEOs are 35 percent more likely to dynamically reallocate capital than average performers. To ensure that resources are swiftly reallocated to where they will deliver the most value rather than spread thinly across businesses and operations, excellent CEOs institute an ongoing (not annual) stage-gate process. Such a process takes a granular view, makes comparisons using quantitative metrics, prompts when to stop funding and when to continue it, and is backed by the CEO’s personal resolve to continually optimize the company’s allocation of resources.

Organizational alignment: Manage performance and health with equal rigor

Ask successful investors what they look for in portfolio companies, and many will tell you they’d rather put money on an average strategy in the hands of great talent than on a great strategy in the hands of average talent. The best CEOs put equal rigor and discipline into achieving greatness on both strategy and talent. And when it comes to putting great talent in place, almost half of senior leaders say that their biggest regret is taking too long to move lesser performers out of important roles, or out of the organization altogether. The reasons for this are both practical (good leaders provide the CEO with important leverage) and symbolic (CEOs who tolerate poor performance or bad behavior diminish their own influence). Many CEOs also say they regret leaving adequate performers in key positions and failing to realize the full potential of their roles. The best CEOs think systematically about their people: which roles they play, what they can achieve, and how the company should operate to increase people’s impact.

Talent: Match talent to value. Many CEOs have confided to us that they worry about asking the same few overstretched “usual suspects” to take extra assignments because they can’t trust the people who would otherwise perform them. The best CEOs take a methodical approach to matching talent with roles that create the most value. A crucial first step is discovering which roles matter most. Careful analysis typically produces findings that surprise even the savviest CEOs. Of the 50 most value-creating roles in any given organization, only 10 percent normally report to the CEO directly. Sixty percent are two levels below, and 20 percent sit farther down. Most surprising of all is that the remaining 10 percent are roles that don’t even exist. Once these roles are identified, the CEO can work with other executives to see that these roles are managed with increased rigor and are occupied by the right people. Robust talent pipelines can also be developed so that important roles remain well staffed. The best CEOs ensure that their own role is included so that the board has viable, well-prepared internal candidates to consider for succession.

Culture: Go beyond employee engagement. Vendors of workforce surveys like to say that employee engagement is the best measure of “soft stuff.” It’s not. While employee engagement indeed correlates with financial performance, a typical engagement survey covers less than 20 percent of the organizational-health elements that are proven to correlate with value creation. A proper assessment of organizational health takes in everything from alignment on direction and quality of execution to the ability to learn and adapt. In the largest research effort of its kind, McKinsey found that CEOs who insist on rigorously measuring and managing all cultural elements that drive performance more than double the odds that their strategies will be executed. And over the long term, they deliver triple the total return to shareholders that other companies deliver. Doing this well involves thoughtful approaches to role modeling, storytelling, aligning of formal reinforcements (such as incentives), and investing in skill building.

Organizational design: Combine speed with stability. “Agility” is one of most widely used and misunderstood management buzzwords of the past decade. For many leaders, agility evokes speed in decision making and execution, as opposed to the deliberate pace dictated by the stable, standardized routines of large organizations. The facts show that agility requires no such trade-off: on the contrary, companies that are both fast and stable are nearly three times more likely to rank in the top quartile of organizational health than companies that are fast but lack stable operating disciplines. Excellent CEOs increase their companies’ agility by determining which features of their organizational design will be stable and unchanging (such features might include a primary axis of organization, a few signature processes, and shared values) and by creating dynamic elements that adapt quickly to new challenges and opportunities (such elements might include temporary performance cells, flow-to-work staffing models, and minimum-viable-product iterations). A services company CEO, for example, better enabled her “one company” strategy by shifting the profit-and-loss axis from products to geographies, reorganizing the back office according to an agile flow-to-work model, and creating a new agile product development group.

Source: McKinsey.com, October 2018
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How to be a great 21st-century CEO

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on juni 8th, 2022 by admin

What do CEOs do? Why do they do it that way? And what matters most?

To answer those questions, we identified 200 highly successful CEOs and conducted in-depth interviews with 67 of them. We found that there is no simple recipe for success, but there is virtue in simplicity. Indeed, the CEOs we interviewed could describe their business strategy in an elevator ride up Shanghai Tower.We also found that, in a sense, all CEOs have the same responsibilities, such as working with the board, engaging stakeholders, setting direction, and creating a positive culture. What separates the best from the rest is how they approach these tasks. All excelled at some, were good at the rest—and knew the difference. All are world-class integrators. And all applied a distinctive set of mindsets against these responsibilities. In our own effort at simplicity, we identified the six mindsets that characterize great CEOs.
Be bold. In times of uncertainty, it can be tempting to minimize the downside. However, that all but guarantees either mediocrity or decline. Successful CEOs want to avoid making mistakes, of course, but they also act boldly, actively seeking significant opportunities. They raise the aspirations of the company, and they look for intersections where the business and the market meet. In effect, they are excellent futurists and thus can define the right vision. While they will cut their losses if a move is a dud, they stick to the strategy. The vision comes first; financial performance flows from that.
Treat the soft stuff as the hard stuff. Only one in three strategies is successfully implemented—in large part because change generates resistance. That is why the “soft stuff”—that is, matters related to people and culture—can be the hardest stuff of all to get right. Research has found that companies that solve the soft stuff are more than twice as likely (from 30 to 79 percent) to execute a strategy successfully. To carry their organization with them, leaders need to make the case for change, and then keep track of results.
Solve for the team’s psychology. To build high-performing leadership teams, the best CEOs start with roles, not people, asking what the most important jobs are and then finding people who can do those jobs. And they design for overall functionality, bringing in a wide range of expertise. CEOs must engage with each individual while keeping some distance. And, again, the soft stuff counts.
Help directors help the business. The board is the CEO’s boss, but an awkward one—a lot of people, infrequently seen. Like any relationship, the bedrock is trust. That means being open, honest, and prompt about plans and problems. Bad news is, well, bad, but delivering it is also a chance for the board to help, which is its function. CEOs should establish a strong relationship with the lead director and check in with other directors once or twice a year. Finally, introduce the board to the company by connecting the board to managers. As Piyush Gupta, the longtime CEO of Singapore’s DBS Group, put it: “The board, to me, is a partner, and they can talk to anyone in my management team. I believe the free flow of information is helpful for complete alignment.
Start with “Why?” Purpose can be difficult to define. At the very least, it should be powerful enough to inspire people, simple enough to be readily understood, and make business sense. And purpose matters: companies with a clear social purpose have significantly outperformed the S&P 500 over the past 20 years. The best CEOs ask themselves why their company exists, then make purpose an intrinsic part of the business model, knowing that testing strategy against purpose can open up new areas of growth. Leading with purpose can also enhance employee well-being and build loyalty.
Do what only you can do. Being a CEO is a 24/7 job, but no one can work that way. Great CEOs make it a priority to manage themselves to ensure that they are not being pulled apart. That is obviously personal, but we did find some commonalities. The most important is self-discipline, particularly regarding the use of time. Old-school techniques such as lists, stars, and color coding crop up often as time-management techniques. At the same time, the CEOs we spoke with also build flexibility into their schedule—to respond to the unexpected or simply to think. Many combine high-intensity work with recovery periods, whether that is a ten-minute break between meetings or playing the piano. Ultimately, managing personal effectiveness is about developing a sense of perspective, and then using that to see into the future.


No book can create a great CEO, any more than a boxing manual can produce a Manny Pacquiao. But in business, as in boxing, there is such a thing as good technique. CEOs matter: we calculated that the 200 CEOs we identified created additional economic value of about $5 trillion. By identifying the mindsets that characterize great leadership, we believe that excellence can be cultivated—now and in the future.

This article originally appeared in Bloomberg on May 4, 2022, and is reprinted here by permission.

 

 

Source: McKinsey.com, 3 June 2022
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Bringing coaching skills into your organization

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on maj 10th, 2022 by admin
Organizations are counting on their managers to help with two of the biggest challenges in today’s work environment—keeping people engaged and keeping them productive. It’s a results and people approach that coaching expert Madeleine Homan Blanchard is very familiar with. As the chief coaching architect for The Ken Blanchard Companies, Madeleine is regularly brought in when a client requests to improve the coaching skills of an organization’s managers.

“People have to show up at work every day as their best possible selves, firing on all cylinders. At the same time, organizations are looking to their managers to keep people engaged and growing. Managers need coaching skills to rise to that challenge.

“A manager with good coaching skills can help direct reports think through problems that don’t have an obvious solution. These managers learn how to create a safe environment where a person can look at the whole landscape of their work and prioritize what needs to be done. Managers also learn how to stay quiet, ask good questions, and help people hear their own voice and find their own answers. Sometimes that’s the best thing you can do as a leader.”

But before Blanchard moves to that step, she always asks an important fundamental question.

“When people come to us and say, “We want our people to be coaches,” or “We want a coaching culture,” my first question is, “How are you managing performance now?”

Blanchard asks that question to make sure the organization already has a system in place for setting clear goals and providing feedback on basic performance.

“Many times, when an organization brings us in to create what they call a ‘coaching culture,’ what they are really envisioning is a culture where managers make sure people have clear goals they are held accountable for, people understand what a good job looks like, and people get what they need when they need it.

“That’s extremely important, but that’s not coaching—it’s performance management.”

If performance management is what a client really needs, Blanchard recommends they start with a proven performance management process such as her company’s SLII® performance management model. SLII® teaches the basics: goal setting, diagnosing development level, and providing a matching leadership style.

“Goal setting, diagnosing, and matching are the foundation of effective performance management. From there, you can layer on the skills of coaching.”

For Blanchard, the coach approach includes how to create an environment where people will be eager to grow. To do this, managers need a different mindset, a foolproof process, and some upgraded skills.

“The number one coaching skill no one talks about is self-regulation: understanding one’s own natural tendencies and how they get in the way of building trust. From there, almost everyone can improve their listening skills, learn to ask better questions, and get more courageous in talking about reality.

“These are advanced skills that assume a performance management foundation is already in place. I didn’t understand this until I was a couple of years into teaching coaching skills. I kept getting questions such as: ‘What do I do when I have an employee who wears white socks with a navy blue suit?’

“That doesn’t require advanced coaching skills; it just requires being able to give clear direction.

“Managers are skittish about giving direct, timely feedback—but we have found they can earn the right to do it by listening carefully and asking good questions. When employees are performing to expectation, the manager can put on their coach hat and create an environment where people feel safe to reveal themselves, experiment, push themselves, and maybe fail.

“That’s the modality a manager can use to get innovation. That’s how you get the highest and best out of each person on your team. But you’re not going to do that unless the basic performance is there and the person is actually doing the job the way it needs to be done.”

For clients who are ready, Blanchard first introduces the importance of shifting to a coaching mindset, which includes demonstrating that you have the coachee’s best interests at heart. Then she shares a coaching conversation process that works every time. The coaching conversation consists of four steps: how to ConnectFocusActivate, and Review.

Connect requires the manager to be fully present in the here and now—truly paying attention to the person being coached,” Blanchard explains. “Focus means clarifying and putting in order the topics to be discussed. Activate means identifying action steps—what will we do next? Review, a step which is often skipped, ensures crystal clear agreement on what was decided, what actions will be taken, and in what time frame.”

From there, Blanchard shares the four LITE skills of Listen to LearnInquire for InsightTell Your Truth, and Express Confidence.

Listen to Learn is a refined way of listening that is subtle but powerful. It teaches managers to listen for the heart of the matter—something that is easy to miss. We remind managers that you can’t listen if you are talking, and we give them a memorable acronym: W.A.I.T. – Why Am I Talking? It’s about quieting your mind so you can really hear what the other person is sharing.

Inquire for Insight challenges managers to ask better questions. There is a big distinction between asking decent questions and asking the best question. For example, instead of asking ‘Why did you do it that way?’ or ‘Tell me what you were thinking,’ which deals with the past and asks you to defend your actions, a manager will learn to ask ‘How could you have done it differently?’ or ‘How might you approach it differently in the future?’ This looks ahead at new possibilities and responses.

Tell Your Truth is all about having the courage to say what needs to be said, which often means giving feedback. We teach managers to examine their motive and intention for saying something. Is this something the person needs to hear or something you just feel the need to say? This skill teaches managers how to make better decisions about what to share and what not to share. Intentions are often murky. We have managers ask themselves: Am I sharing an observation I think will be helpful, am I making a request for a behavior change that needs to happen, or is this a hard-core demand? We help managers navigate the ins and outs of this tricky skill.

Express Confidence is all about maintaining the distinction between people and their performance. ‘As a person, you are innately brilliant and valuable. Your recent behavior, on the other hand—’ It’s all about creating a strong, trusting relationship.”

Blanchard sometimes hears comments about how basic these skills seem.

“On the surface these skills may seem basic, but when they are actually applied, they are surprisingly powerful.

“We strive for simplicity so the skill is doable—so managers can do it! This approach to developing coaching skills provides managers with a proven way to explore. How am I developing this person for the next role? How are they growing? What are their concerns? What is this person most interested in and most passionate about? These are the types of questions people are asking themselves today.

“The Great Resignation has caused people everywhere to think hard about where they are going and how their current organization is helping them get there. Managers who develop coaching skills on top of good performance management skills have an advantage. They know how to have conversations so they can get insight into where someone might want go in the organization even if it has nothing to do with the role they have now.”

“A coaching mindset earns you the right to coach and to be the person who makes a difference—the person your people can trust—where they can be vulnerable, where they can tell the truth about themselves, and where they can have conversations that will get them where they need to go.”

Source:Kenblanchard.com, April 2022
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High-performing teams: A timeless leadership topic

Posted in Aktuellt, Executive Coaching, Executive Team / Ledningsgruppsarbete, Leadership / Ledarskap on april 18th, 2022 by admin
The value of a high-performing team has long been recognized. It’s why savvy investors in start-ups often value the quality of the team and the interaction of the founding members more than the idea itself. It’s why 90 percent of investors think the quality of the management team is the single most important nonfinancial factor when evaluating an IPO. And it’s why there is a 1.9 times increased likelihood of having above-median financial performance when the top team is working together toward a common vision.“No matter how brilliant your mind or strategy, if you’re playing a solo game, you’ll always lose out to a team,” is the way Reid Hoffman, LinkedIn cofounder, sums it up. Basketball legend Michael Jordan slam dunks the same point: “Talent wins games, but teamwork and intelligence win championships.”
The topic’s importance is not about to diminish as digital technology reshapes the notion of the workplace and how work gets done. On the contrary, the leadership role becomes increasingly demanding as more work is conducted remotely, traditional company boundaries become more porous, freelancers more commonplace, and partnerships more necessary. And while technology will solve a number of the resulting operational issues, technological capabilities soon become commoditized.

Cutting through the clutter of management advice

Building a team remains as tough as ever. Energetic, ambitious, and capable people are always a plus, but they often represent different functions, products, lines of business, or geographies and can vie for influence, resources, and promotion. Not surprisingly then, top-team performance is a timeless business preoccupation.

Amid the myriad sources of advice on how to build a top team, here are some ideas around team composition and team dynamics that, in our experience, have long proved their worth.

Team composition

Team composition is the starting point. The team needs to be kept small—but not too small—and it’s important that the structure of the organization doesn’t dictate the team’s membership. A small top team—fewer than six, say—is likely to result in poorer decisions because of a lack of diversity, and slower decision making because of a lack of bandwidth. A small team also hampers succession planning, as there are fewer people to choose from and arguably more internal competition. Research also suggests that the team’s effectiveness starts to diminish if there are more than ten people on it. Sub-teams start to form, encouraging divisive behavior. Although a congenial, “here for the team” face is presented in team meetings, outside of them there will likely be much maneuvering. Bigger teams also undermine ownership of group decisions, as there isn’t time for everyone to be heard.

Beyond team size, CEOs should consider what complementary skills and attitudes each team member brings to the table. Do they recognize the improvement opportunities? Do they feel accountable for the entire company’s success, not just their own business area? Do they have the energy to persevere if the going gets tough? Are they good role models? When CEOs ask these questions, they often realize how they’ve allowed themselves to be held hostage by individual stars who aren’t team players, how they’ve become overly inclusive to avoid conflict, or how they’ve been saddled with team members who once were good enough but now don’t make the grade. Slighting some senior executives who aren’t selected may be unavoidable if the goal is better, faster decisions, executed with commitment.

Of course, large organizations often can’t limit the top team to just ten or fewer members. There is too much complexity to manage and too much work to be done. The CEO of a global insurance company found himself with 18 direct reports spread around the globe who, on their videoconference meetings, could rarely discuss any single subject for more than 30 minutes because of the size of the agenda. He therefore formed three top teams, one that focused on strategy and the long-term health of the company, another that handled shorter-term performance and operational issues, and a third that tended to a number of governance, policy, and people-related issues. Some executives, including the CEO, sat on each. Others were only on one. And some team members chosen weren’t even direct reports but from the next level of management down, as the CEO recognized the importance of having the right expertise in the room, introducing new people with new ideas, and coaching the next generation of leaders.

Team dynamics

It’s one thing to get the right team composition. But only when people start working together does the character of the team itself begin to be revealed, shaped by team dynamics that enable it to achieve either great things or, more commonly, mediocrity.

Consider the 1992 roster of the US men’s Olympic basketball team, which had some of the greatest players in the history of the sport, among them Charles Barkley, Larry Bird, Patrick Ewing, Magic Johnson, Michael Jordan, Karl Malone, and Scottie Pippen. Merely bringing together these players didn’t guarantee success. During their first month of practice, indeed, the “Dream Team” lost to a group of college players by eight points in a scrimmage. “We didn’t know how to play with each other,” Scottie Pippen said after the defeat. They adjusted, and the rest is history. The team not only won the 1992 Olympic gold but also dominated the competition, scoring over 100 points in every game.

What is it that makes the difference between a team of all stars and an all-star team? Over the past decade, we’ve asked more than 5,000 executives to think about their “peak experience” as a team member and to write down the word or words that describe that environment. The results are remarkably consistent and reveal three key dimensions of great teamwork. The first is alignment on direction, where there is a shared belief about what the company is striving toward and the role of the team in getting there. The second is high-quality interaction, characterized by trust, open communication, and a willingness to embrace conflict. The third is a strong sense of renewal, meaning an environment in which team members are energized because they feel they can take risks, innovate, learn from outside ideas, and achieve something that matters—often against the odds.

So the next question is, how can you re-create these same conditions in every top team?

Getting started

The starting point is to gauge where the team stands on these three dimensions, typically through a combination of surveys and interviews with the team, those who report to it, and other relevant stakeholders. Such objectivity is critical because team members often fail to recognize the role they themselves might be playing in a dysfunctional team.

While some teams have more work to do than others, most will benefit from a program that purposefully mixes offsite workshops with on-the-job practice. Offsite workshops typically take place over two or more days. They build the team first by doing real work together and making important business decisions, then taking the time to reflect on team dynamics.

The choice of which problems to tackle is important. One of the most common complaints voiced by members of low-performing teams is that too much time is spent in meetings. In our experience, however, the real issue is not the time but the content of meetings. Top-team meetings should address only those topics that need the team’s collective, cross-boundary expertise, such as corporate strategy, enterprise-resource allocation, or how to capture synergies across business units. They need to steer clear of anything that can be handled by individual businesses or functions, not only to use the top team’s time well but to foster a sense of purpose too.

The reflective sessions concentrate not on the business problem per se, but on how the team worked together to address it. For example, did team members feel aligned on what they were trying to achieve? Did they feel excited about the conclusions reached? If not, why? Did they feel as if they brought out the best in one another? Trust deepens regardless of the answers. It is the openness that matters. Team members often become aware of the unintended consequences of their behavior. And appreciation builds of each team member’s value to the team, and of how diversity of opinion need not end in conflict. Rather, it can lead to better decisions.

Many teams benefit from having an impartial observer in their initial sessions to help identify and improve team dynamics. An observer can, for example, point out when discussion in the working session strays into low-value territory. We’ve seen top teams spend more time deciding what should be served for breakfast at an upcoming conference than the real substance of the agenda (see sidebar “The ‘bike-shed effect,’ a common pitfall for team effectiveness”). One CEO, speaking for five times longer than other team members, was shocked to be told he was blocking discussion. And one team of nine that professed to being aligned with the company’s top 3 priorities listed no fewer than 15 between them when challenged to write them down.

Back in the office

Periodic offsite sessions will not permanently reset a team’s dynamics. Rather, they help build the mind-sets and habits that team members need to first observe then to regulate their behavior when back in the office. Committing to a handful of practices can help. For example, one Latin American mining company we know agreed to the following:

  • A “yellow card,” which everyone carried and which could be produced to safely call out one another on unproductive behavior and provide constructive feedback, for example, if someone was putting the needs of his or her business unit over those of the company, or if dialogue was being shut down. Some team members feared the system would become annoying, but soon recognized its power to check unhelpful behavior.
  • An electronic polling system during discussions to gauge the pulse of the room efficiently (or, as one team member put it, “to let us all speak at once”), and to avoid group thinking. It also proved useful in halting overly detailed conversations and refocusing the group on the decision at hand.
  • A rule that no more than three PowerPoint slides could be shared in the room so as to maximize discussion time. (Brief pre-reads were permitted.)

After a few months of consciously practicing the new behavior in the workplace, a team typically reconvenes offsite to hold another round of work and reflection sessions. The format and content will differ depending on progress made. For example, one North American industrial company that felt it was lacking a sense of renewal convened its second offsite in Silicon Valley, where the team immersed itself in learning about innovation from start-ups and other cutting-edge companies. How frequently these offsites are needed will differ from team to team. But over time, the new behavior will take root, and team members will become aware of team dynamics in their everyday work and address them as required.

In our experience, those who make a concerted effort to build a high-performing team can do so well within a year, even when starting from a low base. The initial assessment of team dynamics at an Australian bank revealed that team members had resorted to avoiding one another as much as possible to avoid confrontation, though unsurprisingly the consequences of the unspoken friction were highly visible. Other employees perceived team members as insecure, sometimes even encouraging a view that their division was under siege. Nine months later, team dynamics were unrecognizable. “We’ve come light years in a matter of months. I can’t imaging going back to the way things were,” was the CEO’s verdict. The biggest difference? “We now speak with one voice.”


Hard as you might try at the outset to compose the best team with the right mix of skills and attitudes, creating an environment in which the team can excel will likely mean changes in composition as the dynamics of the team develop. CEOs and other senior executives may find that some of those they felt were sure bets at the beginning are those who have to go. Other less certain candidates might blossom during the journey.

There is no avoiding the time and energy required to build a high-performing team. Yet our research suggests that executives are five times more productive when working in one than they are in an average one. CEOs and other senior executives should feel reassured, therefore, that the investment will be worth the effort. The business case for building a dream team is strong, and the techniques for building one proven.

Source: McKinsey.com
Link

From strategy to execution

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on mars 11th, 2022 by admin

Shifting mindsets and driving behaviors.

The ability to execute is a principal quality of organizations that become and remain great.
As increasingly volatile environments pressure executive teams to adjust their strategies
more frequently, successful execution is more critical than ever.
Based on more than 30 years of experience working with executives leading strategy
implementation, there are three typical barriers that prevent execution: speed, siloes, and
the struggle to understand what a new strategy really looks like. We also uncovered three
key elements that make the greatest impact on employees’ ability to connect strategy and
execution: alignment, mindset, and capability.
In this paper, we’ll explore the three main challenges organizations face and the three critical
elements organizations need to ensure great execution.

The strategy execution challenge
Strategy execution has never been easy. Research shows that 67% of well-formulated
strategies fail in execution.
Still, strategy execution remains a top priority and key challenge
for executives. Based on our work with executives, there are three common roadblocks that
executives encounter:
• Speed – execution is slow. People spend too long planning instead of shifting to
implementation.
• Siloes – people are disconnected and often misaligned. This makes strategy
implementation nearly impossible.
• The struggle – implementation is painful, especially when people can’t fully grasp its
effects on their individual roles.

Speed is the first issue. Strategy execution is slow because leaders get stuck in the
formulation stage, which is often seen as fun and gratifying, rather than moving to
implementation, which is perceived as more difficult and frustrating. This transition
demands that leaders substantially shift their mindsets, a hurdle that most strategies fail to
overcome.

Discussions about execution are commonly drowned out by operational
concerns, “Can we deploy strategy without breaking the operational
model?”; process concerns, “Do we have the right processes and systems in
place to reflect how we do things now?”; and finance concerns, “How do we
know we’re driving value?”

While legitimate, these questions miss the point, which leads us to siloes.
Strategy execution is as much of a people issue as it is a business one, as
the most critical element of its success is a strong, shared sense of direction
amongst the people responsible for executing the strategy. People tend
to work in siloes, struggling to reconcile individual goals with those of the
overall enterprise. With pressure to attain department-specific goals,
employees and leaders alike need a higher level of business acumen and
strong leadership to remain both connected and focused while executing
the strategy in their daily work.

Lastly, the struggle. It is often difficult for employees to fully grasp what
a new strategy means for them, which makes its execution painful. While
executives may benefit from the analytical boardroom debates that led to a
new strategy, employees not privy to those conversations will pay the price.
Successfully bringing a strategy from the boardroom to the front line
requires meeting these common challenges with the right alignment,
mindset, and capability to drive success.

Keys to successful execution
Alignment and capability are two of the most well-known and well-regarded
drivers of strategy execution.
1. Alignment accounts for employees’ understanding of the strategy itself.
To achieve alignment, regardless of their role, each employee must
understand how they can contribute to executing the new strategy.
They must also understand the impact of different trade-offs they will
face while executing strategy and organization-wide consequences.
This strategic foresight allows for cross-functional empathy and a more
intentional approach to collaboration driven by the understanding of
how a decision’s impact goes beyond one’s function thus driving stronger
alignment.
2. Capability, in this context, refers to the skills required to implement
strategy at all levels in the organization. Most organizations typically
regard capability development as the clearest path towards short-term
strategy execution.
Take, for example, a financial institution seeking to integrate a new
strategy. Firstly, the organization’s leaders needed to develop alignment
by better understanding how their decision-making impacted other business
units. To do so, leaders experienced a customized business simulation during
which they practiced making decisions in an environment directly modelled after
the business. This allowed them to develop stronger business acumen capabilities
and better comprehend the organization as a whole, thus accelerating strategy
integration.
However, capability development is more than just a short-term solution; it can also
support strategy execution in the long term.
In the case of a leading food-industry organization, capability development was
instrumental to strengthening value creation. After experiencing a customized executive
development program, focused on both leadership behaviors and strategy by using a
tailored, context-rich business simulation, the organization’s leaders developed a deeper
understanding of their end-to-end value creation. The leaders gained clarity around the
interdependencies of their differing functions and how decisions made by other parts of
the organization would impact the business overall.
In terms of strategy execution, alignment and capability development receive plenty
of attention. Leaders know that their strategic initiatives are futile without strong
organizational alignment, and many even go so far as to say that alignment is their
top priority.
This makes sense, as misalignment of senior teams has been proven to
negatively impact organization and employee performance. Similarly, capability
development is critical to organizations, whether in executing new strategies marking
a departure from past ways of working, or in stable strategies where the criticality
is around having a strong command of the value creation process across the entire
organization.
The final component of effective strategy execution is just as critical as alignment and
capability, but often overlooked: mindset.

Mindset for execution
Mindset describes an individual’s worldview; it is their beliefs, attitudes, and physiology.
Mindset also plays a pivotal role in how one thinks, learns, and behaves.
Surveyed executives agree that mindset has the largest potential to impact an organization’s ability to execute strategy successfully. Therefore, shifting mindsets is an incredibly powerful way to
strengthen leaders for times of change.

At the organizational level, outcomes are shaped by the company’s collective mindset.
Adopting a shared mindset helps employees better understand the existing business and its
future direction, as well as buy-in to the collective momentum of the strategic shift.
For example, a global financial institution adopted an Agile way of working to support
its strategy of becoming more customer centric. This required a consistent, systematic
mindset shift from people at all levels within the organization. After identifying new ways to
contribute, employees brought the strategy to life through ownership, empowerment, and
self-organization.

While shared mindsets are critical at the organizational level, it is ultimately up to each
employee to shift their individual mindset to make a collective shift a reality. In the context of
executing strategy, a single person’s unique blind spots, experiences, personal worldviews, or
attitudes and beliefs can make or break a strategy. This is because each individual must buy
in to the collective mindset to implement the strategic shift.

For instance, imagine an engineer eager to devise more advanced and technically rich
product. The engineer’s sole focus is on the product and its features, rather than the
outcomes for the end-user. Therefore, the engineer struggles to adopt a customercentric mindset because they fail to put the customer first. Executing strategy requires a
corresponding mindset shift at both an individual and organizational level.

A shared mindset, when aligned with strategy, makes execution faster, better connected,
and less painful. In summary:
Strategy execution is….

So, how do the world’s leading organizations build the right strategy execution capabilities from the C-suite to the front line? And how do they do it in a way that both caters to their

organization’s specific challenges and drives tangible changes?
Safe and relevant interventions that target leaders and provide them with a powerful
coaching platform are key. Immersing leaders in a realistic environment that reflects board
room tensions and trade-offs, while allowing them to safely practice their new strategy, will
ultimately lay the foundation for the mindset shifts required by transformation.
Strategy execution is a complex, multi-faceted challenge that most organizations struggle to
enact. However, by focusing on people, developing the proper alignment and capabilities, and
integrating the required mindset, any organization can achieve strategy execution

Source: bts.com, March 2022
Author: Ignacio Vaccaro, Head of Strategy Execution and Business
Alignment for BTS Europe, Senior Director
Link

If we’re all so busy, why isn’t anything getting done?

Posted in Aktuellt, Allmänt, Executive Coaching, Leadership / Ledarskap on januari 12th, 2022 by admin

With endless meetings, incessant emails, and casts of thousands, companies have mastered the art of unnecessary interactions. Winning in the next normal requires much more focus on true collaboration.

Have you ever asked why it’s so difficult to get things done in business today—despite seemingly endless meetings and emails? Why it takes so long to make decisions—and even then not necessarily the right ones? You’re not the first to think there must be a better way. Many organizations address these problems by redesigning boxes and lines: who does what and who reports to whom. This exercise tends to focus almost obsessively on vertical command relationships and rarely solves for what, in our experience, is the underlying disease: the poor design and execution of collaborative interactions.

In our efforts to connect across our organizations, we’re drowning in real-time virtual interaction technology, from Zoom to Slack to Teams, plus group texting, WeChat, WhatsApp, and everything in between. There’s seemingly no excuse to not collaborate. The problem? Interacting is easier than ever, but true, productive, value-creating collaboration is not. And what’s more, where engagement is occurring, its quality is deteriorating. This wastes valuable resources, because every minute spent on a low-value interaction eats into time that could be used for important, creative, and powerful activities.

It’s no wonder a recent McKinsey survey found 80 percent of executives were considering or already implementing changes in meeting structure and cadence in response to the evolution in how people work due to the COVID-19 pandemic. Indeed, most executives say they frequently find themselves spending way too much time on pointless interactions that drain their energy and produce information overload.

Three critical collaborative interactions

What can be done? We’ve found it’s possible to quickly improve collaborative interactions by categorizing them by type and making a few shifts accordingly. We’ve observed three broad categories of collaborative interactions:

  • Decision making, including complex or uncertain decisions (for example, investment decisions) and cross-cutting routine decisions (such as quarterly business reviews)
  • Creative solutions and coordination, including innovation sessions (for example, developing new products) and routine working sessions (such as daily check-ins)
  • Information sharing, including one-way communication (video, for instance) and two-way communication (such as town halls with Q&As)

Below we describe the key shifts required to improve each category of collaborative interaction, as well as tools you can use to pinpoint problems in the moment and take corrective action.

Decision making: Determining decision rights

When you’re told you’re “responsible” for a decision, does that mean you get to decide? What if you’re told you’re “accountable”? Do you cast the deciding vote, or does the person responsible? What about those who must be “consulted”? Sometimes they are told their input will be reflected in the final answer—can they veto a decision if they feel their input was not fully considered?

It’s no wonder one of the key factors for fast, high-quality decisions is to clarify exactly who makes them. Consider a success story at a renewable-energy company. To foster accountability and transparency, the company developed a 30-minute “role card” conversation for managers to have with their direct reports. As part of this conversation, managers explicitly laid out the decision rights and accountability metrics for each direct report. The result? Role clarity enabled easier navigation for employees, sped up decision making, and resulted in decisions that were much more customer focused.

To make this shift, ensure everyone is crystal clear about who has a voice but no vote or veto. Our research indicates while it is often helpful to involve more people in decision making, not all of them should be deciders—in many cases, just one individual should be the decider (see sidebar “How to define decision rights”). Don’t underestimate the difficulty of implementing this. It often goes against our risk-averse instinct to ensure everyone is “happy” with a decision, particularly our superiors and major stakeholders. Executing and sustaining this change takes real courage and leadership.

Creative solutions and coordination: Open innovation

Routine working sessions are fairly straightforward. What many organizations struggle with is finding innovative ways to identify and drive toward solutions. How often do you tell your teams what to do versus empowering them to come up with solutions? While they may solve the immediate need to “get stuff done,” bureaucracies and micromanagement are a recipe for disaster. They slow down the organizational response to the market and customers, prevent leaders from focusing on strategic priorities, and harm employee engagement. Our research suggests key success factors in winning organizations are empowering employees and spending more time on high-quality coaching interactions.

Take Haier. The Chinese appliance maker divided itself into more than 4,000 microenterprises with ten to 15 employees each, organized in an open ecosystem of users, inventors, and partners (see sidebar “How microenterprises empower employees to drive innovative solutions”). This shift turned employees into energetic entrepreneurs who were directly accountable for customers. Haier’s microenterprises are free to form and evolve with little central direction, but they share the same approach to target setting, internal contracting, and cross-unit coordination. Empowering employees to drive innovative solutions has taken the company from innovation-phobic to entrepreneurial at scale. Since 2015, revenue from Haier Smart Home, the company’s listed home-appliance business, has grown by more than 18 percent a year, topping 209 billion renminbi ($32 billion) in 2020. The company has also made a string of acquisitions, including the 2016 purchase of GE Appliances, with new ventures creating more than $2 billion in market value.

Empowering others doesn’t mean leaving them alone. Successful empowerment, counterintuitively, doesn’t mean leaving employees alone. Empowerment requires leaders to give employees both the tools and the right level of guidance and involvement. Leaders should play what we call the coach role: coaches don’t tell people what to do but instead provide guidance and guardrails and ensure accountability, while stepping back and allowing others to come up with solutions.

Haier was able to use a variety of tools—including objectives and key results (OKRs) and common problem statements—to foster an agile way of working across the enterprise that focuses innovative organizational energy on the most important topics. Not all companies can do this, and some will never be ready for enterprise agility. But every organization can take steps to improve the speed and quality of decisions made by empowered individuals.

Managers who are great coaches, for example, have typically benefited from years of investment by mentors, sponsors, and organizations. We think all organizations should do more to improve the coaching skills of managers and help them to create the space and time to coach teams, as opposed to filling out reports, presenting in meetings, and other activities that take time away from driving impact through the work of their teams.

But while great coaches take time to develop, something as simple as a daily stand-up or check-in can drive horizontal connectivity, creating the space for teams to understand what others are doing and where they need help to drive work forward without having to specifically task anyone in a hierarchical way. You may also consider how you are driving a focus on outcomes over activities on a near-term and long-term basis. Whether it’s OKRs or something else, how is your organization proactively communicating a focus on impact and results over tasks and activities? What do you measure? How is it tracked? How is the performance of your people and your teams managed against it? Over what time horizons?

The importance of psychological safety. As you start this journey, be sure to take a close look at psychological safety. If employees don’t feel psychologically safe, it will be nearly impossible for leaders and managers to break through disempowering behaviors like constant escalation, hiding problems or risks, and being afraid to ask questions—no matter how skilled they are as coaches.

Employers should be on the lookout for common problems indicating that significant challenges to psychological safety lurk underneath the surface. Consider asking yourself and your teams questions to test the degree of psychological safety you have cultivated: Do employees have space to bring up concerns or dissent? Do they feel that if they make a mistake it will be held against them? Do they feel they can take risks or ask for help? Do they feel others may undermine them? Do employees feel valued for their unique skills and talents? If the answer to any of these is not a clear-cut “yes,” the organization likely has room for improvement on psychological safety and relatedness as a foundation to high-quality interactions within and between teams.

Information sharing: Fit-for-purpose interactions

Do any of these scenarios sound familiar? You spend a significant amount of time in meetings every day but feel like nothing has been accomplished. You jump from one meeting to another and don’t get to think on your own until 7 p.m. You wonder why you need to attend a series of meetings where the same materials are presented over and over again. You’re exhausted.

An increasing number of organizations have begun to realize the urgency of driving ruthless meeting efficiency and of questioning whether meetings are truly required at all to share information. Live interactions can be useful for information sharing, particularly when there is an interpretive lens required to understand the information, when that information is particularly sensitive, or when leaders want to ensure there’s ample time to process it and ask questions. That said, most of us would say that most meetings are not particularly useful and often don’t accomplish their intended objective.

We have observed that many companies are moving to shorter meetings (15 to 30 minutes) rather than the standard default of one-hour meetings in an effort to drive focus and productivity. For example, Netflix launched a redesign effort to drastically improve meeting efficiency, resulting in a tightly controlled meeting protocol. Meetings cannot go beyond 30 minutes. Meetings for one-way information sharing must be canceled in favor of other mechanisms such as a memo, podcast, or vlog. Two-way information sharing during meetings is limited by having attendees review materials in advance, replacing presentations with Q&As. Early data show Netflix has been able to reduce the number of meetings by more than 65 percent, and more than 85 percent of employees favor the approach.

Making meeting time a scarce resource is another strategy organizations are using to improve the quality of information sharing and other types of interactions occurring in a meeting setting. Some companies have implemented no-meeting days. In Japan, Microsoft’s “Work Life Choice Challenge” adopted a four-day workweek, reduced the time employees spend in meetings—and boosted productivity by 40 percent.1 Similarly, Shopify uses “No Meeting Wednesdays” to enable employees to devote time to projects they are passionate about and to promote creative thinking. And Moveline’s product team dedicates every Tuesday to “Maker Day,” an opportunity to create and solve complex problems without the distraction of meetings.

Finally, no meeting could be considered well scoped without considering who should participate, as there are real financial and transaction costs to meeting participation. Leaders should treat time spent in meetings as seriously as companies treat financial capital. Every leader in every organization should ask the following questions before attending any meeting: What’s this meeting for? What’s my role? Can I shorten this meeting by limiting live information sharing and focusing on discussion and decision making? We encourage you to excuse yourself from meetings if you don’t have a role in influencing the outcome and to instead get a quick update over email. If you are not essential, the meeting will still be successful (possibly more so!) without your presence. Try it and see what happens.

 

Source: McKinsey.com, 10 January 2022
Link

New year new team? Seven tips for getting started successfully with your new team

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on januari 4th, 2022 by admin

Your promotion to ​​leading a new team or function is simultaneously exciting and just a little bit nerve-wracking. The great news is that your boss has faith in your abilities and is betting her credibility that you’re the right person for the job. The butterflies-in-the-stomach part comes from knowing you’ve got a whole new set of challenges, including establishing yourself as a credible leader in the eyes of your team members.

By setting aside fears or excitement and instead focusing on some basic strategies, chances for success will be greatly improved.

Preparation

Spend time with your manager reviewing your team’s needs and expectations. Ask:

  • How does this team fit with the firm’s overall strategy and key goals?
  • How is the team’s performance evaluated, and what do recent measures/evaluations say about how the team has performed?
  • Where are the strengths of the group?
  • What are the perceived weaknesses?
  • What are your manager’s expectations for you in this new role?
  • What are the three most important things you can do to support your manager’s agenda during your first quarter?
  • How deep is the talent on the team? Where are the gaps?

Engaging With Peers

Once your promotion has been made public, do your homework and solicit input from your new peers across the organization. Ask for their perspective on your team’s performance, strengths, and gaps. Focus on the interaction points between the groups and ask them to identify strengths and areas for improvement. Take great notes and strive to identify opportunities for early victories. It’s important to have your peers on your side.

Making It About Them

Too often, new managers step into a role and make a poor first impression by waxing poetically or nauseatingly about their own backgrounds and achievements. Resist the urge to make yourself the focal point. After a brief introduction, ask questions designed to help you better understand the team’s culture:

  • What are you proud of that this group does particularly well?
  • What have been the major accomplishments over the last year?
  • What are the current goals of the team?
  • What are the activities you would like to pursue that you haven’t found the time for?

Soliciting Input

This takes a bit of courage, but the feedback you gain will say a lot about your team’s situation and needs. Ask: “At the end of my time as manager of this group, what will you say that I did?” It’s a good question that will help your team members focus on identifying developmental and organizational needs. Listen and take notes without commenting or judging. ​

One-on-One Meetings

Pre-publish this simple agenda outlining just 3 questions:

  • What’s working?
  • What’s not?
  • What do you need me to do to help you succeed at your job?

Ideally, conduct the meetings face-to-face. However, telephone or video conferencing work great for your remote colleagues. Take notes, strive to identify and offer immediate help with tactical problems such as not having the proper tools.

Sharing Input

Remember to ensure anonymity. These meetings offer great opportunities to hear from team members and to get to know them, and learn about their ideas, interests, and needs. They also offer you and the group ideas on opportunities to collaborate in pursuit of early improvements and needed changes.

Establishing Protocols

As part of your early assessment, review the existence of regular status or operations meetings. If there are regular, timely scheduled sessions, consider sitting in and listening. If the prior manager ran these sessions, rotate the meeting leadership among team members. Once you have a feeling for the effectiveness of the operating routine, you can make adjustments. Unless the team is in crisis, there’s nothing to be gained by immediately asserting your own agenda. Of course, if there is no regular routine, you have ample opportunity to create. Ask your team members for input.

As for your communications protocol, let your team members know how to reach you. Help them to understand your desired level of involvement. Develop a sense of their communication needs—some individuals prefer daily or frequent interaction and others prefer to engage with their manager infrequently or when guidance is required. Be flexible and adapt to their needs.

Work with team members to refresh group and individual goals during the first 30 to 45 days. If the team is in a crisis or turnaround situation, accelerate this timetable.

The Bottom Line

The point in time when you assume responsibility for a new team should be a period rich in relationship building and collaboration. Resist the urge to assert that you’re the “new sheriff in town,” and use questions to gain context on talent, operations, and opportunities. You need your team’s help to succeed and the right way to start out is by making all of your team members a valuable part of the process. You’ll have ample time to make changes as you gain context and credibility. In the beginning, it’s a good practice to observe and ask without judging.

 

 

Source: thebalancecareers.com
Link

Create a durable, giving culture

Posted in Aktuellt, Allmänt, Executive Coaching, Leadership / Ledarskap on december 6th, 2021 by admin

Take a lesson from the NBA: a recent study shows that team players add 60 percent more value than selfish ball hogs (or, in organizational psychologist Adam Grant’s terms, takers).

At work, generous colleagues, or givers, not only have an outsize impact on their own teams’ effectiveness but also help their organizations perform better on virtually every metric, from profits and costs to satisfaction and retention of both employees and customers. But does generosity at work come at a cost? Grant’s research shows that givers represent an organization’s best and worst performers—a sign that those who are overly generous, those who consistently go the extra mile, may be experiencing burnout. But the answer isn’t to give in to a culture of takers. Rather, leaders should do the opposite, weeding out takers and creating an equilibrium between givers and “matchers”—those who tend to subscribe to quid pro quo thinking. How can leaders find the right balance? First, lead by example, playing the role of “chief help seeker” so others feel comfortable asking for the help they need. Next, encourage givers to set boundaries and find small ways to make an impact, including five-minute favors or more efficient ways to share knowledge and resources. Want to find out where you fall on the giver–taker spectrum?

Source: McKinsey.com, December 6 , 2021
Link

Executives reported being five times more productive …

Posted in Aktuellt, Allmänt, Executive Coaching on november 29th, 2021 by admin

… when in a state of “flow,” according to our ten-year study of more than 5,000 leaders. The late Hungarian–American psychologist Mihaly Csikszentmihalyi described flow as a special state of mind that arises from being so engaged in an activity that time and ego seem to melt away. In short, whether playing a musical instrument, solving a problem, or running a race, it’s a state of peak

performance. Csikszentmihalyi discovered that people who regularly achieve flow are more productive and satisfied in their work. Leaders seeking to generate flow in the workplace should focus on three elements: clearly understanding roles and objectives, having trusted and respectful colleagues, and performing work that matters.

Source: McKinsey.com, November 2021
Link

Three keys to faster and better decisions

Posted in Aktuellt, Executive Coaching, Leadership / Ledarskap on september 5th, 2021 by admin
Decision makers fed up with slow or subpar results take heart. Three practices can help improve decision making and convince skeptical business leaders that there is life after death by committee.
Two years ago, we wrote about how it was simultaneously the best and worst of times for decision makers in senior management. Best because of more data, better analytics, and clearer understanding of how to mitigate the cognitive biases that often undermine corporate decision processes. Worst because organizational dynamics and digital decision-making dysfunctions were causing growing levels of frustration among senior leaders we knew.Since then, we’ve conducted research to more clearly understand this balance, and the results have been disquieting. A survey we conducted recently with more than 1,200 managers across a range of global companies gave strong signs of growing levels of frustration with broken decision-making processes, with the slow pace of decision-making deliberations, and with the uneven quality of decision-making outcomes. Fewer than half of the survey respondents say that decisions are timely, and 61 percent say that at least half the time spent making them is ineffective. The opportunity costs of this are staggering: about 530,000 days of managers’ time potentially squandered each year for a typical Fortune 500 company, equivalent to some $250 million in wages annually. Managers at a typical Fortune 500 company may waste more than 500,000 days a year on ineffective decision making.The reasons for the dissatisfaction are manifold: decision makers complain about everything from lack of real debate, convoluted processes, and an overreliance on consensus and death by committee, to unclear organizational roles, information overload (and the resulting inability to separate signal from noise), and company cultures that lack empowerment. One healthcare executive told us he sat through the same 90-minute proposal three times on separate committees because no one knew who was authorized to approve the decision. A pharma company hesitated so long over whether to pounce on an acquisition target that it lost the deal to a competitor. And a chemicals company CEO we know found himself devoting precious time to making hiring decisions four levels down the organization.In our previous article, we proposed solutions that centered around categorizing decision types and organizing quite different processes against them. Our latest research confirms the importance of this approach, and it also highlights for each major decision category a noteworthy practice—sometimes stimulating debate, for example, while in other cases empowering employees—that can yield outsize improvements in effectiveness. When improvements in these areas are coupled with an organizational commitment to implement decisions—embracing not undercutting them—companies can achieve lasting improvements in both decision quality and speed. Indeed, faster decisions are often a happy outcome of these efforts. Our survey showed a strong correlation between quick decisions and good ones, suggesting that a commonly held assumption among executives—namely, “We can have good decisions or fast ones, but not both”—is flawed.

Three fixes that make a difference

Of the four decision categories we identified two years ago, three matter most to senior leaders. Big-bet decisions (such as a possible acquisition) are infrequent but high risk and have the potential to shape the future of the company; these are generally the domain of the top team and the board. Cross-cutting decisions (such as a pricing decision), which can be high risk, happen frequently and are made in cross-functional forums as part of a collaborative, end-to-end process. Delegated decisions are frequent but low risk and are effectively handled by an individual or working team, with limited input from others. (The fourth category, ad hoc decisions, which are infrequent and low stakes, is not addressed in this article.) Clearly, it is important that these types of decisions happen at the appropriate level of the company (CEOs, for example, shouldn’t make decisions that are best delegated). And yet, just as clearly, many decisions rise up much higher in the company than they should (see sidebar, “Avoiding life on the bubble”).

Even those businesses that do make decisions at the right level, however, complain about slow and bad outcomes. The evidence of our survey—and our experience watching executives grapple with this—suggests that while the best practices for making better decisions are interrelated, there’s nonetheless one standout practice that makes the biggest difference for each type of decision (exhibit).

Big bets—facilitate productive debate

Big-bet decisions can be future-shapers for a company, the most important decisions leaders make. And they often receive much less scrutiny than they should.

The dynamic inside many decision meetings doesn’t help. It’s as if there is an unspoken understanding that the meeting should proceed like a short, three-act play. In the first act, the proposal is delivered in a snappy PowerPoint presentation that summarizes the relevant information; in the second, a few tough yet perfunctory questions are asked of the presenter and answered well; in the final act, resolution arrives in the form of an undramatic “yes” that may seem preordained. Little substantive discussion takes place.

In a global agricultural company, for example, the members of the executive committee tended to speak up only if their particular area of the business was being discussed. The tacit assumption was that people wouldn’t intrude on colleagues’ area of responsibility. Consequently, when the top team moved to decide on a proposed new initiative in Europe, the leaders from the US business stayed silent, even though they had years of hard-won experience in marketing and cross-selling similar agricultural products to those new ones under discussion. Nonetheless, the decision was made, the products launched—and sales lagged expectations. Later, the European sales force was frustrated to learn their US counterparts had relevant experience that would have helped.

Whether the cause of such dynamics is siloed thinking or a consensus-driven culture (of which, more later), the effect on decision making is decidedly negative. Bet-the-company decisions require productive interactions and healthy debate that balance inquiry and advocacy. In fact, the presence of high-quality interactions and debate was the factor most predictive of whether a respondent in our survey also said their company made good, fast big-bet decisions.

Leaders can encourage debate by helping overcome the “conspiracy of approval” approach to group discussion. Simple behavior changes can help. For example, consider starting the decision meeting by reminding participants of the overall organizational goals the meeting supports, in order to reframe the subsequent discussions. Then assign someone to argue the case for, and against, a potential decision or the various options under consideration. Similarly, ask the leaders of business units, regions, or functions to examine the decision from outside their own point of view. A rotating devil’s advocate role can bolster critical thinking, while premortem exercises (in which you start by assuming the initiative in question turned out to be a failure, and then work back for likely explanations) can pressure test for weak spots in an argument or plan.

The objective should be to explore assumptions and alternatives beyond what’s been presented and actively seek information that might disconfirm the group’s initial hypotheses. Creating a safe space for this is vital; at first it can be helpful for the most senior participants to ask questions instead of expressing opinions and to actively encourage dissenting views. Productive debate is essentially a form of conflict—a healthy form—so senior executives will need to devote time to building trust and giving permission to dissent, irrespective of the organizational hierarchy in the room.

A final note of caution: minimizing the number of debate participants to speed up decision making could harm decision quality. As many studies show, greater diversity brings greater collective wisdom and expertise, along with better performance. This is also true in decision making. To ensure a faster process, companies should manage the expectations of debate participants by limiting their voting rights and sticking to other agreed-upon processes, as we explore next.

Cross-cutting decisions—understand the power of process

An executive we know joked during a meeting that “a committee is born every day in this organization.” Just then, another executive nearby looked up from his computer to announce he had just been invited to join a new committee. The comedic timing of the line was perfect, but it wasn’t a joke.

Or perhaps the joke is on the rest of us? We often find companies maintaining a dozen or more senior-executive-level committees and related support committees, all of which recycle the same members in different configurations. The impetus for this is understandable—cross-cutting decisions, in particular, are the culmination of smaller decisions taking place elsewhere in the company. And cross-cutting decisions were the ones that executives in our survey had the most exposure to, regardless of their seniority.

Yet when it comes to cross-cutting decisions (involving, for example, pricing, sales, and operations planning processes or new-product launches), only 34 percent of respondents said that their organization made decisions that were both good and timely.

There are many reasons cross-cutting decisions go crosswise. Leaders may not have visibility on who is—or should be—involved; silos make it fiendishly hard to see how smaller decisions aggregate into bigger ones; there may be no process at all, or one that’s poorly understood.

Solving for cross-cutting decisions, therefore, starts with commitment to a well-coordinated process that helps clarify objectives, measures, targets, and roles. In practical terms, this might mean drawing a bright line between the portion of a meeting dedicated to decisions from the parts of a meeting meant to inform or discuss. Any recurring meetings (particularly topic-focused ones) where the nature of the decision isn’t clear are ripe for a rethink—and quite possibly for elimination.

Good meeting discipline is also a must. For example, a mining company realized that its poor decision making was related to the lack of rigor with which executives ran important meetings. As a result, the top team developed a “meeting manifesto” that spelled out required behaviors, starting with punctuality. The new rules also required leaders to clarify their decision rights in advance, and to be more deliberate about managing the number of participants so that meetings wouldn’t become bloated, on the one hand, or lack diverse views, on the other.

The manifesto was printed on laminated posters that were put in all meeting rooms, and when the CEO was seen personally reinforcing the new rules, the news spread quickly that there was a new game afoot. As the new practices took hold, the benefits became apparent. In pulse-check surveys conducted over the course of the following year, the company’s measures of meeting effectiveness and efficiency went up by almost 50 percent.

A social-network analysis, meanwhile, allowed a global consumer company to identify time wasting around decision making on a heroic scale—as many as 45 percent of interactions were found to be potentially inefficient, and 23 percent of the individuals involved in an average interaction added no value. In response, the company broke down complex processes into key decisions, clarified roles and responsibilities for each one, defined inputs and outputs for each process, and made one person accountable for each outcome. After conducting pilots in several countries, executives used two-day workshops to roll out the process redesign. The resulting benefits included a significant financial boost (as employees used the freed-up time in higher-value ways), as well as an arguably more important boost in employees’ morale and sense of work–life balance, which in turn has helped the company attract and retain talent.

Delegated decisions—make empowerment real

Delegated decisions are generally far narrower in scope than big-bet decisions or cross-cutting ones. They are frequent and relatively routine elements of day-to-day management. But given the multiplier effect, there is a lot of value at stake here, and when the organization’s approach is flawed it’s costly.

In our experience, ensuring that responsibility for delegated decisions is firmly in the hands of those closest to the work typically delivers faster, better, and more efficiently executed outcomes, while also enhancing engagement and accountability.

Our research supports this view. Survey respondents who report that employees at their company are empowered to make decisions and receive sufficient coaching from leaders were 3.2 times more likely than other respondents to also say their company’s delegated decisions were both high quality and speedy.

A vital aspect of empowerment, we find, involves creating an environment where employees can “fail safely.” For example, a European financial-services company we know started a series of monthly, after-work gatherings where leaders could meet over drinks to discuss failure stories and the lessons they’d learned from them. The meetings were purposely kept informal, but top management nonetheless established ground rules to ensure that the stories would be meaningful (not trivial) and that employees telling the stories would be protected. The meetings started small but became popular quickly. Today, a typical session includes 40 to 50 of the company’s top 150 leaders. The climate of trust and openness the sessions encourage has translated into better ideas, including practical lessons that have helped the company speed up its release of new products.

As this example suggests, empowerment means not only giving employees a strong sense of ownership and accountability but also fostering a bias for action, especially in situations where time is of the essence. That’s easier said than done if there’s no penalty for avoiding a decision or sanction for escalating issues unnecessarily.

Executives who get delegated decisions right are clear about the boundaries of delegation (including what’s off-limits and how and where to escalate what’s beyond an individual’s competence), ensure that those they entrust with decision-making authority have the relevant skills and knowledge to act (and if not, provide them with the opportunity to acquire those capabilities), and explicitly make people accountable for their areas of decision-making responsibility (including spelling out the consequences for those who fail to respond to the challenge). This often means senior leaders engaging in conversations and dialogue, encouraging those newly empowered to seek help, and in the early days subtly and invisibly monitoring the performance of those participating in “delegated” forums so as not to appear to be taking over. Leaders might want to start mentoring their reports with a small “box” of accountability, slowly expanding it as more junior executives grow in confidence.

For leaders looking to become better delegators, it’s not a question of choosing between a style that is “hands-on” or “hands-off,” or between one that is “controlling” or “empowering.” There’s a balance to be struck. Root out micromanagers who are both hands-on and controlling, as well as “helicopter autocrats” who are hands-off and controlling, occasionally swooping in, barking orders, and disappearing again. But the laissez-faire executive—generally too hands-off, delegating but leaving those with the responsibility too much to their own devices (sometimes with disastrous results)—is also a danger. The ideal in our experience are hands-on and delegating leaders who coach, challenge, and inspire their reports, are there to help those who need help, and stay well clear of actually making the decision.

After the decision: Seek commitment, not unanimous agreement

In his April 2017 letter to Amazon shareholders, CEO Jeff Bezos introduced the concept of “disagree and commit” with respect to decision making. It’s good advice that often goes overlooked. Too frequently, executives charged with making decisions at the three levels discussed earlier leave the meeting assuming that once there’s been a show of hands—or nods of agreement—the job is done. Far from it.

Indeed, any agreement voiced in the absence of a strong sense of collective responsibility can prove ephemeral. This was true at a US-based global financial-services company, where a business-unit leader initially agreed during a committee meeting not to change the fee structure for a key product but later reversed course. The temptation was too great: the fee changes helped the leader’s own business unit—albeit ultimately at the expense of other units whose revenues were cannibalized.

One of the most important characteristics of a good decision is that it’s made in such a way that it will be fully and effectively implemented. That requires commitment, something that is not always straightforward in companies where consensus is a strong part of the culture (and key players acquiesce reluctantly) or after big-bet situations where the vigorous debate we recommended earlier has taken place. At a mining company, real commitment proved difficult because the culture valued “firefighting” behavior. In staff meetings, company executives would quickly agree to take on new tasks because it made them look good in front of the CEO, but they weren’t truly committed to following through. It was only when the leadership team changed this dynamic by focusing on follow-up, execution risks, and bandwidth constraints that execution improved.

While it’s important to devote enough resources to help propel follow-through, and it’s also important to assign accountability for getting things done to an individual or at most a small group of individuals, the biggest challenge is to foster an “all-in” culture that encourages everyone to pull together. That often means involving as many people as possible in the outcome—something that, paradoxically, in the end will enable the decision to be implemented more speedily.

Follow the value

There are many keys to better decision making, but in our experience focusing on the three practices discussed here—and on the commitment to implement decisions once taken—can reap early and substantial dividends. This presupposes, of course, that the decisions leaders make at all levels of the organization reflect the company’s strategy and its value-creation agenda. That may seem obvious, but it bears repeating because all too often it simply doesn’t happen. Take the manufacturing company whose operations managers, faced with calls from the sales team to raise production in response to anticipated customer demand, had to consider whether they should spend unbudgeted money on overtime and hiring extra staff. With their bonuses linked exclusively to cost targets, they faced a dilemma. If they took the decision to increase costs and new orders failed to materialize, their remuneration would suffer; if the sales team managed to win new business, the sales representatives would get the kudos, but the operations team would receive no additional credit and no additional reward. Not surprisingly, the operations managers, in their weekly planning meeting, opted not to take the risk, rejected a proposal to set up a new production line, and thereby hindered (albeit inadvertently) the group’s higher growth ambitions. This poor-quality—and in our view avoidable—outcome was the direct result of siloed thinking and a set of narrow incentives in conflict with the group’s broader strategy and value-creation agenda. The underlying management challenge is part of a dynamic we see repeated again and again: when senior executives fail to explore—and then explain—the context and underlying strategic intentions associated with various targets and directives they set, they make unintended consequences inevitable. Worse, the lack of clarity makes it very difficult for colleagues further down in the organization to use their judgment to see past the silos and remedy the situation.

Designing an organization to deliver its strategic objectives—setting a clear mission, aligning incentives—is a big topic and outside the scope of this article. But if different functions and teams do not feel a connection to the bigger picture, the likelihood of executives making good decisions, whether or not they adopt the ideas discussed earlier, is significantly diminished.

Source: McKinsey.com, May 2021
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