Culture’s Influence on Performance—Greater Appreciation Abounds

It was John Bogle, the founder and former chairman of Vanguard, that noted that ‘the most important things in life are often the most difficult to measure’.

How true—especially things like trust. In the work world, culture is another ‘thing’ that is really important but is often difficult to quantify. Culture (which some have characterized as how we think and act) is not only a vague notion for some but one that Is next to impossible to put on a balance sheet. Rest assured though that culture (which is inseparably linked to trust) effects the balance sheet and other facets of organizational performance.

This weekend two articles ran on the East Bay Times (a San Francisco Bay Area paper) editorial page (Sunday edition) that highlighted the dysfunction of two public-sector cultures that have had a significant impact in terms of degrading public trust. In my experience, it’s rare for two investigative reporters (on the same day, on the same editorial page) cite culture as the major culprit of discord in their stories. I was harkened by the two investigative reporters, acting independently, that were speaking forcefully about the pervasive nature of culture. For ‘culture deniers’ (whom I run into somewhat regularly, are prone not to give the influence of culture it’s due) these types of articles help put a ‘real-world’ context to the impact of culture. In other words, the two articles give a hard edge (albeit with imperfect measurement) to a supposedly soft subject.

The first public-sector culture under the microscope in Sunday’s article was Caltrans (California’s transportation department) for their contribution in the new eastern span of the San Francisco Bay Bridge. Daniel Borenstein, the article’s author, refers to Caltrans culture as unprofessional—with senior leaders routinely using heavy-handed intimidation, secrecy, and denial as means to the meet the leaders ends. As the article points out, the costs for the eastern span skyrocketed from $1.4 to $6.4 billion. The project suffered significant construction delays and is now is under scrutiny for safety concerns. Not all of these issues have ‘culture’ as the sole cause, but certainly culture is considered a significant contribution. For the complete story see:
Daniel Borenstein Gov. Brown Must Fix Caltrans Culture

The second culture under scrutiny is the Veterans Association (VA). In the VA’s case, it is believed that the silence and secrecy embedded in the culture led to patient deaths. How sad. As author Kate Scannell’s article points out, the VA culture has other troubling issues as well. See:
Dr. Kate Scannell: VA scandal shows we must speak up about the deadly silences in health care

Both of these examples illustrate the very real consequences of a dysfunctional culture. In both instances, trust is on life support. Plus, key performance targets have failed miserably. In the case of the VA, people died. Edgar Schein, an early pioneer in the field of organizational development, may have put it best: ‘culture is to the organization what character is to the individual.’ Both of these examples have been well chronicled in articles beyond the two highlighted here. It’s clear that both these organization’s cultures were by-products of their leadership—in this case inadequate leadership.

Schein also wrote ‘there is a possibility that the only thing of real importance that leaders do is create and manage culture’. Given the era in which Schein made that statement, it was difficult to justify that point-of-view. Today it’s much easier, especially given these two examples.

Leadership Development – Grading a 14 Billion Dollar Investment

Many of you have heard me rail against so-called training methods that prove ineffective. Long story short, lots of training is a waste of time and money. At least that’s the way I see it.

The January 2014 issue of the McKinsey Quarterly contains an article that echos that sentiment. The article—“Why Leadership Development Programs Fail”— outlines four common mistakes that contribute to the leadership development failure.

One of the four mistakes referenced in the article has to do with ineffectively addressing an individual’s mind-set. In other words, most leadership development programs don’t deal with the root cause of behavior—namely the individual’s mind-set.

While the authors have a slightly different view of ‘mind-set’ than I do….the gist of our views is common enough not to quibble with.

In writing The Power of Professionalism I made a commitment to deal with the root causes of behavior—namely to identify the mind-sets held by trusted professionals. Get the focus on the right mind-sets and a lot of things (behaviorally, for the student) naturally takes care of itself. Get the focus on the right mind-sets and now you’re (managerially speaking) leveraging your training investment.

Apparently one of the world’s premier consultancies now sees it that way too!

Reinforcing One’s Identity As A Professional

Many of you know I teach in the business school of one of San Francisco Bay Area’s local universities.  The course work for one sixteen-week class involves an instructional tag-team approach.  In other words, there are four of us instructors involved. Thus, coordination is important in reinforcing key messages in the course work.  This particular class is comprised of sixteen CEO’s of mid-size companies from all over the United States. 

 Here’s a note I recently sent to my fellow instructors.  I trust you can ‘listen in’ and benefit too.  After all, it’s important for all of us to reinforce our colleagues identity of themselves as a professional.

 Here’s my note.

___________________

“Reinforcing one’s identity of themselves as a professional (one of the key points from my week three work with the students) takes many forms. In some instances, it’s a number of (seemingly) small things, repeated many times.”

 “I’m writing to encourage each of you in reinforcing our current XX students identity of themselves as a professional.  It’s important for us to model (for them, the students) what we’re encouraging them to do (for their people).”

 “Here’s one seemingly simple way to do this: when addressing the students or asking a question, preface your comments or question with  ‘As a professional, …’.”

 “For example, here’s a few samples. As you’ll see, each example is posed in two (slightly) different ways:

“What are you prepared to do to make your change plan come to life?”

“As a professional, what are you prepared to do to make your change plan come to life.”

 

“To what degree do you feel that this work product reflects your best thinking?”

“As a professional, to what degree do you feel this work product reflects your best thinking?”

 

 “What is it that is incumbent on you to make your experience with this course a terrific one for yourself and your fellow XX colleagues?”

 “As a professional, what is it that is incumbent on you to make your experience with this course a terrific one for yourself and your fellow XX colleagues?”

 “The ‘professional preface’, when properly executed, produces a better result.  Sometimes it takes awhile to kick in, but eventually ‘professional’ will become more top-of-mind for the student.  That’s what we want.”

“Of course the ‘preface ahead’ of the salutation suggestion (or method) is not the only way to have ‘professional’ become more top of mind.  But it’s a good one for we educators to start with.”

“This seems like a small thing.  You may have doubts whether it will have impact.  From experience, I can tell you it does.”

 “Small things, repeated many times, can produce surprisingly remarkable results.”

A Sweet Story—Conscious Capitalism Lifting Africans Out of Poverty

The prime minister of the island-nation of Sao Tome and Principe has been reported to have said, “Don’t send us any more aid, send us five more Claudio Corallos’.  The prime minister’s country, lying off the west coast of Africa, was used to receiving financial aid from generous countries in a position to do so.  His country, like many African communities, is quite poor.

Who, you ask, is Claudio Corallo? Claudio produces some of the world’s finest chocolate on the island of Principe. He is a conscious capitalist. Claudio emulates what I wrote about in The Power of Professionalism.  Said another way, he’s a professional. Never mind that he wears open-toed sandals and a Panama hat 99% of the time while traipsing up-and-down the steep jungle terrain of his plantation.

Claudio has aspired to bring to the world the purest form of cocoa production.  Having recently tasted his chocolate at a retail outlet in Berkeley, California, I’d say he has come pretty close.

His story is inspiring.  He pays his workers significantly more than the going (and dismal) wage-rate on Principe. To say he is an employer of choice is an understatement.

The prime minister came to see how capitalism (when done the right way) would lift people out of poverty better than aid ever could.  Aid was fine, but really only proved to be a stop-gap measure. The notion that capitalism should be considered a serious  solution to poverty has gained a lot of steam—especially with the inspiring successes associated with micro-lending. Interestingly, U2’s front man Bono (see National Review article, Capitalisms Triumph, Michael Tanner, 2014 ) came to the same conclusion as the prime minister.

Wanna lift people out of poverty?  It’s hard to beat conscious capitalism. Thanks Claudio for such a sweet example.

Unflattering Trait ≠ Unprofessional

People are sometimes described as unprofessional by their colleagues or associates when they have a trait or characteristic that stands out—-typically in an unflattering way.  Consider:

***the woman with the shrill laugh who seemingly thinks everything is funny (her colleagues initially found this trait to be cute, but over time became repelled by it)   

***the man who is naturally inquisitive and incessantly asks questions. (his peers quickly found this to be aggravating)  

***the supervisor (someone who happened to have a hearing disability) that speaks especially loudly—even when having one-on-one conversations in close quarters. ( even understanding his condition, the staff never quite got used to this and too often felt like they were being yelled at—inappropriately so)

If asked, how would you describe these individuals?  Or what if you were an executive recruiter and one of these people becomes a serious candidate for a position you’re attempting to fill.  As a professional, how do describe (objectively so) the individual to your hiring manager client?  After all, what you say holds sway with the hiring manager.  Say something inappropriate (or misleading) and you could torpedo the candidate. 

Sometimes we’re inclined to describe these types of individuals as unprofessional.  And that inclination is often fueled from our own emotional reaction to them (the importance of mind-set six, once again, raises its head).  From my point of view, when someone has a trait or characteristic that stands out in an unflattering way, it doesn’t make them unprofessional.  ‘Un’ means without or the opposite of.  In effect, in describing someone as unprofessional it suggests that the person has virtually no professionalism.  It would be a rare circumstance in which that would be true.   

Plus, when you suggest someone is unprofessional it suggests that you can’t trust them—whether it be their competence, their judgment, or their character (for more on this see Chapter Four in The Power of Professionalism).  Having a defining personal trait (however annoying) typically doesn’t have much to do with their professionalism and, by default, their trustworthiness.  Simply said, transposing someone’s personality with their character does that person a disservice—and does not reflect well on us as a professional.         

When describing someone who has a trait or characteristic that is unflattering, consider describing  them as a bit unpolished, needing greater refinement, or something analogous which is appropriate to the situation.

Take first impressions.  It’s true that when someone ‘shows up’ disheveled (think: unkept appearance) it invariably creates the wrong impression.  Many will be put off by it. Certainly people don’t initially associate ‘professional’ with that person.  Yet, it’s important to resist the urge to refer to them as unprofessional—for many of the reasons previously stated.    

The point here is not to generalize.  As professionals, it’s important for all of us to be objective. Recall  the woman with the shrill laugh.  Annoying? Sure. Unprofessional? No.

Connecticut Huskies Know ‘It’s All About The Team’

As Richard Kovacevich, former Chairman of Wells Fargo, has stated, “You learn very quickly playing sports that it’s all about the team.  It’s the best five players that win the basketball game, not the five best players.”

On Monday the best team, the University of Connecticut, won the national championship.  Their opponent, the University of Kentucky, had ‘the five best players’.  Actually, they may have had more than five—they’re loaded with half-a-gazillion McDonald’s All-Americans.  Their starting five were all uber-talented freshman.

Yes, Connecticut’s point guard Shabazz Napier may well have been the nation’s best player.  Yet Connecticut’s talent quotient was dramatically lower than Kentucky’s. In many ways Kentucky is an NBA farm club. ‘One-and-done’ describes what their current freshman are expected to do—namely turn pro. Whether they will or not remains to be seen.

On Monday the best team won, not the most talented team.  Connecticut didn’t miss a free throw going 10 for 10 (Kentucky was 13 of 24).  Connecticut, who was at a sizeable height disadvantage, out rebounded Kentucky by one. On paper Connecticut should have never been able to out rebound Kentucky—it just doesn’t equate given Kentucky’s superior height advantage and previous dominating performance on the boards all year.

If talent were the ultimate differentiator, Kentucky should have won. They didn’t.  That’s because talent, as important as it is, is overrated.  At the end of the day, it’s the team that matters most.

Congratulations to the Connecticut Huskies.

Lessons In Professionalism (and Success) From Basketball’s San Antonio Spurs

Last night I caught a few minutes of the San Antonio Spurs/Golden State Warriors game.  For those unaware, these are two National Basketball Association (NBA) teams.  I happen to be a fan of the Warriors—being a native of the San Francisco Bay Area.

The Spurs were impressive in winning the game—their 19th in a row!  If you want to see basketball played at the highest level imaginable—watch the Spurs play sometime. It’s the precision and jaw-dropping impact of Cirque du Soleil in gym shorts. Some have argued the Spurs could field two NBA quality teams from their current fifteen-man roster.

The Spurs have three future Hall of Fame players but that’s not why they’re so impressive. They play within a system—one that’s been carefully honed over the years by coach Gregg Popovich.  When it comes to the Spurs, it’s professionalism on steroids.

I believe that, out of all the modern sports, basketball is the best in illustrating the mind sets in action.

Consider:

***the deadly-shooting point guard who acts as a decoy, enabling them to distribute the ball to open teammates (mind-sets 1,2,6,7 ).

***the player who passes up a good shot so that their teammate will get a better one (mind-sets 1,2,6,7).

***the uber-talented individual players who choose to forgo their individual stats and play as a unified team (mind-sets 1,2).

***the shooting guard who takes a charge from the opponent’s 280 pound power-forward (mind-sets 1,2,3).

***the star player who generously renegotiates their contract, releasing monies for the team to sign a desirable free-agent, and enabling the team to stay under the salary-cap (mind-sets 1,2,4).

Watch the Spurs play sometime—you’ll see these attributes and more.  You’ll see professionals in action.

Is The US Stock Market Rigged?

Author Michael Lewis says it is. 60 Minute’s March 30th expose on the subject may be of interest to you. Lewis’s new book Flash Boys was released on Monday.

What’s the thumb nail version of the story?  Clever traders were manipulating the market by gaining a speed advantage over everyone else—including unsuspecting industry veterans. In the industry it’s called ‘front running’.  The advantage (pennies per trade) times gazillions of trades resulted in some serious money—measured in the billions.  The impact to the average investor was small but still ‘didn’t feel right’ to Brad Katsuyama the hero of the story.

Brad, a former employee of the Royal Bank of Canada, ran the New York trading desk for RBC in Manhattan when he discovered the problem.  Long story short, he eventually started his own exchange to counteract ‘front running’.  Big players in the financial services world are taking notice—with some having invested in the new exchange.

Katsuyama notes, “We’re selling trust.  We’re selling transparency. To think that trust is actually a differentiator in a service business is kind of a crazy thought, right?’  Arguably a number guy, Katsuyama learned first-hand how the absence of trust is like a cancer to an industry that depends on it.

When asked why he left his cushy (and very lucrative) job at RBC to start a risky new exchange, Katsuyama noted, ‘it felt like a sense of obligation” to fix a troubling problem that was negatively impacting millions of unsuspecting people.

Katsuyama is all about doing his part in restoring trust to the financial markets.  I’m really grateful he did. To many he’s a hero.  To me, he’s the consummate professional.  —the ultimate compliment in my book.

 

 

 

Identity As A Predictor of Behavior

We humans incessantly want to know ‘why’.  Children especially.

Why did so-and-so do such-and-such is an especially popular ‘why’ question centered around human behavior.  Given all the seemingly unexplainable things we humans do, it’s certainly a natural.

In The Power of Professionalism I suggested that an especially helpful way to better understand a person’s behavior is to understand how they view themselves. Said another way, understand the identity the individual has assigned to themselves.

It wasn’t until the mega-talented All-Star outfielder Jose Canseco revealed to baseball manager Tony LaRussa that he saw himself as an entertainer (think: identity) that LaRussa finally understood his flamboyant, and often maddening, outfielder (source: full story page 56, The Power of Professionalism). It wasn’t until that acknowledgement on Canseco’s part that LaRussa truly understand why Jose did what he did.

Fast-forward to last Saturday March 8th. A San Francisco Giants beat writer was being interviewed by Marty Lurie.  Marty hosts the Giants pre and post game radio program show on the weekends in the Bay Area.  The subject shifted to steroids and, naturally, Barry Bonds.

Did he or didn’t he?  And if he did use steroids, why? To be clear, Bonds has never  acknowledged he used steroids, although most believe he likely did.  The ‘did he use’ question was also focus of a protracted federal court case.

The beat writer goes on to share an experience he had with Barry (and his entourage) very late in his playing career.  Barry was ‘holding court’ with this tight-knit group out of ear shot of others. It was Barry ‘unplugged’.  He was authentic and unabashedly forthright as he spoke about his career, his reputation, and his station in baseball history.

During the session Barry never acknowledged that he had used steroids but spoke ‘as if’ he had. After all, he reflected, wouldn’t a player get contact lenses if it enhanced their  performance?, wouldn’t a player doctor the ball if it enhanced their performance?  wouldn’t a player use steroids if it enhanced their performance?

Bonds went on to say that he considered himself an entertainer (think: identity)…just as Canseco did!

What’s the principal thing entertainers are expected to do?  Perform!

Did Barry Bonds use steroids?  I don’t know.  But if he (the entertainer) did, now you know why.

 

 

 

 

 

 

 

 

 

Keeping Focus When Things Go Sideways—-Mind-Set Three In Action

Mind-set #3 basically says ‘things get better when I do’.  My extended team holds this mind-set in spades. It allows us to really focus on the work—even when things go side-ways.  Allow me to illustrate.

Many of you know that we’ve been developing artwork in conjunction with the mind-sets that, once framed, clients can hang in their conference room, offices and the like. Without getting into the weeds, the customized images are developed in Vermont, printed in California, and framed in the mid-west.   (Yes, we know there are more efficient production methods than the one we’re currently using.  We do it this way to ensure quality control.)

Ron, my printing guy, calls me on Monday evening indicating that our latest print run looked odd—the artwork had a prominent red tinge throughout it. I went to see for myself and, sure enough, something was clearly wrong.

After about thirty minutes of diagnosing the problem, we eliminated every possible mechanical source associated with the printing mechanism.  From that, I concluded the problem was likely the files we were given.  I told Ron I’d contact the Vermont ‘file’ guys the next morning.  Ron, who was already perturbed by the situation, reluctantly agreed.

As I was departing, Ron says, ‘wait a minute’.  He continued, ‘you know maybe changing the paper option would make a difference’.  Ron went into the software, tinkered with some settings (none of which I understood)…and, viola, ultimately produced some stellar prints.  Problem solved.

Ron is a perfectionist.  His focus the entire time was on things that he might have done improperly that contributed to the problem.  Never once did he do the easy thing—namely point an accusing finger to the Vermont guys who produced the files.  In other words, he believed that he must look inward first to see what his contribution to the problem might be.  Ron epitomizes mind-set three.

Turns out, Ron had done nothing wrong.  Rather, a quirk in the programming software proved to be the culprit.  Yet, Ron’s approach saved all of us a lot of time and unnecessary aggravation.  Boy, isn’t it great  working with people like that?