Why it’s critical to establish transferable value in your business

The largest asset on a business owner’s personal financial statement is typically their company. At some point in time, however, they’re going to want to monetize the value of that asset — in a sale, succession or private-equity driven liquidity event. To do that, the business must have transferable value.

“Transferable value is not what the value is to you, the business owner,” says Vistage International Chair and Focus CFO Area President Jeff Semple. “It’s what it’s going to be worth to somebody else.”

Smart Business spoke with Semple about how business owners can create transferable value in their company.

Why should an owner be concerned with transferable value?

Business owners typically build a business based on what it can do for them. But at some point, they’re going to want to be able to monetize all the hard work that they’ve done over the years. That requires transferable value, which is built through business processes that are repeatable and predictable. It requires a team capable of carrying on the company’s critical functions — sales, operations, etc. — without the founder.

If those aren’t in place, few buyers are willing to write an owner a sizable check for what essentially is a job. A strategic buyer may be interested in acquiring a competitor’s gross margin and customer base, but they may close the place down and roll the valuable assets into their own facility, which likely compromises the jobs of anyone working in the company.

How is transferable value built?

Transferable value is built through systems and processes that enable someone else to make the decisions that the owner had made without directly tapping the owner’s experience, knowledge and expertise. It means having proper reporting, cash flow improvements, weekly operating rhythms, management reports — a flow of information that’s considered foundational to the business. That gives the new owner the ability to make proactive decisions based on where they want to take the business. On top of that foundational reporting, there are elements that contribute to the health of the business such as gross margin, budgeting, forecasting, cash flow analysis, metrics and KPIs. Those combined are part of the equation that can provide a path to proactively increase company value.

Buyers are also looking for a team with the ability to make proactive decisions without relying on the business owner. The more dependent the business is on the owner-operator, the less value it has to the person buying it.

When should the process of building transferable value begin?

In a perfect world, building transferable value starts from the day the business begins. However, owners commonly put off building transferable value because the day-to-day grind always seems stand in the way. But the day to day is never going to go away — owners will always have a fire to put out and there will never be a perfect time. Every business owner is busy dealing with challenges. By putting off the work of creating transferable value, business leaders introduce risk into the enterprise because the business is too dependent on them and they aren’t able to predict how or when they’ll exit the business.

They could have a plan, but that plan could be disrupted by a disagreement with partners, a death, disability or an accident in the family, something that’s going to essentially force the transfer or sale of the business well before anticipated. If the biggest asset on an owner’s personal financial statement is unprotected because there’s no certainty of when and how an exit could occur, it’s a risk that should be mitigated. Further, not being deliberate about creating transferable value often means owners will likely stay where they are while others who make time for these activities achieve the success that everybody is trying to get to.

Business owners don’t have to do it all by themselves. It’s about leadership development and building a team with relentless execution because transferable value isn’t an event, it is a journey.

Insights Leadership is brought to you by Vistage International and Focus CFO

How to be successful in the era of artificial intelligence

Artificial intelligence (AI) is becoming pervasive — Deloitte reports more than two-thirds of smartphone users already use AI or machine learning. And experts say this is just the beginning.

Dale Carnegie asked more than 3,500 employees, across a range of industries and company sizes and 11 countries, how they feel about AI and what they expect from it. 

While optimism mostly prevails, the increase of workplace monitoring can send the message that the company doesn’t trust its employees. In fact, 64 percent of respondents at the level of director or above were at least moderately worried about the potential impact of AI on their organization’s culture. These leaders recognize that gains from AI could be offset by losses, at least in part, if the resulting impact has the effect of disengaging employees.

Smart Business spoke with John Glaneman, president of Dale Carnegie Training of Western PA and NE Ohio, about three things that would make people feel more positive about AI.

In the AI era, why is trust so important?

Building and maintaining trust in leadership requires all leaders be honest and consistent in what they say and do. But AI brings its own pitfalls, as employees wonder about the true purpose of deploying AI and have privacy and security concerns. 

The survey uncovered that employees’ trust in their senior leadership to make the right decisions about AI implementation has an inverse relationship with the respondent’s hierarchal position. Only a quarter of employees with no direct reports have a high level of trust in leadership, compared to just under half of managers. 

If there is a trust issue, implementing AI — or any strategic initiative perceived as threatening — carries an additional risk of failure. Companies should assess the existing trust level through engagement assessments, apps for sentiment analysis, pulse surveys and exit interviews. Leaders also must live the stated values, adhere to principles, be consistent in their words, decisions and actions, and make building trust a priority.

How can transparency reassure employees?

While people don’t expect to understand every technical detail, they do demand that decision-making by AI be at least moderately explainable if they are to accept that the underlying process is fair. In the survey, 63 percent of respondents are at least moderately concerned about human biases built into AI systems or legal issues related to responsibility for problems with AI. 

The continuing role of human leaders in AI oversight is critical, and organizations must be prepared to provide satisfactory explanations of AI algorithms.

What skills do employees need to feel confident about new roles in an AI world?

Trust and transparency will go a long way toward helping employees approach AI with a positive attitude, particularly when they can make decisions in an information-rich, agile environment. If they also feel confident that they’ll develop the skills to adapt to new roles, organizations can maintain their engagement. The overwhelming majority of respondents expect and prefer their employers give them this additional training.

However, to manage the technology and perform nonroutine tasks that require high levels of social and creative intelligence, soft skills are essential. Nearly 70 percent of respondents, vice president level or higher, consider communication skills to be particularly important in an organization using AI.

Yet, only four in 10 respondents at all levels have received communications skills training the past three years. Other gaps include creativity, critical thinking and leadership skills. A smaller percentage of company leaders believe teamwork will be important in an AI workplace, but that’s where respondents had the most training.

Achieving the full potential of AI depends on a successful partnership between humans and machines. Of the survey respondents who trust their leadership, feel they have a solid understanding of AI and have received soft skills training the last three years, 68 percent are extremely positive about the changes AI will bring, compared to 21 percent of all others.

For organizations that see AI as vital to their success, the value of having employees who are willing to embrace the technology, as well as their changing roles, can’t be overstated. They will be the advocates who help build momentum for success with AI projects.

Insights Leadership is brought to you by Dale Carnegie

Developing a strong corporate culture through your attitudes and actions

If culture is so important, why aren’t more companies getting it right? Creating and maintaining a positive, unifying culture in the face of a fast-moving business environment is difficult. Even when leaders achieve a comprehensive, objective view of their company’s culture, it’s far from simple to effect change when needed.

In fact, culture is embedded in nearly everything — how employees see themselves, how they relate to customers, how they interact with authority, their approach to problem-solving and strategic decisions, how they describe the company’s purpose and more. Plus, the elements of corporate culture that helped an organization thrive can become liabilities as the business environment evolves.

Smart Business spoke with Marilee MacAskill, area manager at Dale Carnegie Training of Northeast Ohio, about how senior leaders can help create successful workplace cultures.

What are some challenges to maintaining an effective corporate culture?

A recent Dale Carnegie survey across India, Germany, Indonesia and the U.S. uncovered commonalities among senior leaders of companies with a strong corporate culture. These ‘culture champions’ cited pressure to increase productivity as the leading challenge to creating and maintaining a positive company culture, followed by workplace transparency, increasing employee mobility and more demanding employees. 

How does the attitude of senior leaders impact corporate culture?

While nearly all executives believe culture is a priority, culture champions are more likely to believe culture has a high impact on financial performance, is critical to reaching financial goals or makes a difference when it comes to engaging employees.

Nearly half of the culture champions surveyed said that middle managers or direct supervisors have the greatest impact on their company’s culture — as opposed to senior leaders or frontline employees. In addition, more than one-third believe they have room for improvement.

What actions are culture champions taking to improve their already strong culture?

Effective culture champions look for ways to continuously reinforce the elements that are helping the organization succeed, and to change those that are no longer productive as the competitive environment shifts. 

They are more likely to provide employee training, help create a strong customer focus, convey clear strategy and goals, and encourage strong relationships between employees and their managers. Their organizations more often succeed in establishing the necessary supportive processes and procedures that enable their people to affect these key areas in their daily work.

Some of the most valuable measures include providing developmental training, improving workplace conditions, offering more competitive pay and benefits, creating paths to career advancement and offering flexible work hours.

However, one area that even the best-in-class companies struggle with is creating and maintaining trust in senior leadership. It’s not unusual for well-intentioned companies to profess one set of values, while overlooking inconsistencies in their senior leaders’ decisions and behaviors.

What else should employers remember about corporate culture?

Even with attitudes in place, actions planned and involvement by leaders at every level, change efforts fail when companies overlook the importance of measuring their progress. Without tracking HR metrics or employee survey results to gauge progress, leaders can be misled into assuming that activity will bring the desired results.

If creating a high-performing and engaging corporate culture were easy, the business world would have tired long ago of its obsession with the topic. Given its impact on strategy, employee engagement and financial performance, corporate culture cannot be left unattended by senior leaders. Organizations are well-served to make it a priority, and while each company must navigate its own path toward cultural excellence, there is much to be gained by embracing the right attitudes and studying the successful actions of those who demonstrate an ability to get it right.

Insights Leadership is brought to you by Dale Carnegie

Make engagement a daily priority, with the right training to back it up

It’s rare to find an executive who says employee engagement is not a priority. Yet most recent studies show the average level of engagement is essentially unchanged. 

The business case for continuing to pursue employee engagement, however, has only become stronger. Engaged employees are a competitive advantage, and the impact on the bottom line is indisputable.

Smart Business spoke with Marilee MacAskill, area manager at Dale Carnegie Training of Northeast Ohio, and John Glaneman, president of Dale Carnegie Training of Pennsylvania and Ohio, about how to go all-in on employee engagement.

Why do companies struggle with achieving engagement?

Engagement is complex, organizations approach it differently, and too many simply pay lip service to the idea. One Dale Carnegie study found lower-level leaders are disillusioned, with 22 percent believing their organizations spend too much time and money trying to engage employees, and 26 percent saying efforts to engage employees are a distraction from real work.

How can employers change this perception?

Employee engagement needs to be treated like any other strategic priority and worked on daily, rather than occasionally or frequently. Organizations also must provide practical knowledge and skills. Even though increasing engagement has been front and center for some time, there are still leaders who lack the basics of how to do it. 

What’s an example of the impact of training?

Hyland recently hired Dale Carnegie to help R&D and technical services leaders engage their teams and develop their leadership skills. Dale Carnegie worked with 200 managers from around the world. A blended learning approach worked well with this tech-savvy audience, to ensure time-spaced learning, application time in between the sessions, and accountability reports during the sessions.

The results: numerous breakthroughs and improved morale with more unstructured time with their boss; ‘innerview’ sessions where the leaders were able to learn more about what motivates their people; and even some innovative new product ideas and engagement-enhancing programs.

What are some practical steps to help leaders at every level improve engagement?

Companies can begin by:

  •   Focusing. While all parts of the employee experience impact engagement, leadership wields outsized influence on engagement levels. Immediate supervisors still matter a great deal, and with growing workplace transparency, the words and behaviors of leaders don’t just impact those they regularly work with face-to-face.
  •   Honestly examining top priorities. Do senior leaders truly believe engagement is a competitive advantage? Is employee engagement treated like other top priorities? Does every leader know they share responsibility for it? Have senior leaders somehow been exempted?
  •   Opening a dialogue with managers and truly listening to their beliefs and frustrations regarding engagement. When prior experiences have been negative, it will take more than cheerleading to change minds. Highlight early successes and use examples to bring awareness to the personal benefits of engaged employees. Assess, too, whether managers believe they have the right knowledge and skills. Leaders told to ‘engage’ and left to their own devices are put in a tough spot. Organizations should scrutinize how they spend resources on training managers to engage employees and emphasize practical skills that matter.
  •   Aligning policies with the intent. If engagement is a top priority, does the way in which progress is measured allow for accurate assessment? Are reward and recognition programs aligned? Are processes and procedures working alongside engagement efforts? If not, change them. However, these barrier removal projects won’t be enough without a strong focus enabling leaders to make engagement a daily priority.

When executives want to improve engagement, the leadership is the best starting point. While saying yes to engagement may mean saying no to another priority, if organizations hope to realize the benefits of an engaged workforce, it’s time to go all-in.

Insights Leadership is brought to you by Dale Carnegie

How peer groups help CEOs make meaningful change in their companies

“Former GE Chairman and CEO Jack Welch once said, ‘When the rate of change on the outside of a company exceeds the rate of change inside, the end is near,’” says Jim Jelinek, a chair at Vistage.

Today, companies are facing major forces of change that are generational, economic and technological. CEOs must position their companies, and just as importantly, themselves, to embrace those changes. They must effectively answer the question: What must we do differently?

“It takes unbiased thinking, and open and honest discussions with peers, to dig in and find solutions that keep a company on top,” he says.

Smart Business spoke with Jelinek about how peer groups can help CEOs break out of long-held ideas and institute meaningful change in their companies.

What are some examples of challenges facing companies today?

The way to go about hiring has changed completely, yet some companies believe they can successfully recruit today’s talent with ads. They risk missing out on bringing the best people into their organizations.

How companies bring a product to market has also changed, and yet there are still companies that use dated methods for this critical function.

CEOs can be insulated, often without knowing it. They lack the perspective that would otherwise help them realize they’re not keeping pace with changes in the market. Sometimes it’s the case that CEOs don’t believe their company is getting left behind until they start to feel the pain. Then they think they can just work harder and fix it, but that’s not the case. Pretty soon their company is in crisis.

What challenges come with instituting organizational change?

Denial is a powerful force and it commonly manifests in thoughts such as, ‘My industry is different. We don’t change as fast.’ CEOs need a push to get through that denial. And that, as is the case with most change and challenges to closely held beliefs, is painful. But CEOs have to face that pain and work their way through it.

Another issue is that CEOs often think change can happen fast. They’re good with the initial push, but tend to give up too easily when momentum stalls. Depending on the type of change, it can often take a while for the initiative to be realized at the bottom of the organization. CEOs often don’t take the time to ensure everyone in the organization understands why change is necessary and why they should embrace it.

Every change is behavior change, and it’s tough. If the leader isn’t progressing and growing and thinking differently about what an organization can do, it stunts a company’s growth.

How can CEOs become less insular?

It’s helpful to meet with other CEOs in a peer group. It allows a person to share his or her plans and get honest feedback. This interaction can help those who may not realize a problem exists come to understand that they need to change.

A peer group can ask CEOs tough questions. Finding the answer leads the CEO to dig deeper, challenge his or her initial thoughts, and that typically leads to greater awareness and understanding.

Having their ideas challenged is just one aspect of a peer group. The other is discovering new options and perspectives that come from the group that may not have been considered. Really tough issues need tough questions and tough evaluations. In a peer environment, CEOs can test drive ideas. They may hear others say they’ve tried an approach and learn the outcome — it worked, it didn’t work — and offer support or an alternative.

There’s also the benefit of working with CEOs in different industries, which helps to avoid industry-think. It’s a chance to see how others do it.

Behind every business problem is a personal challenge. And every change means a loss of something, even if it’s just familiarity. CEOs who don’t deal with the emotional side of change and understand the difficulty of dealing with the associated fear of loss often fail to change. A high-performing group can identify and unpack that and help a CEO confront his or her issues to get past them and bring about change in his or her company.

Insights Leadership is brought to you by Vistage

How the company you keep drives leadership, growth and success

While thousands of CEOs will say that being part of a CEO peer advisory group has transformed their lives and their companies, too few of them ever join one. Most CEOs don’t experience what’s called “peer advantage.” By giving language to this powerful resource, the hope is that more CEOs and business leaders will discover how much they can benefit from it.

Smart Business spoke with Leo Bottary, vice president of peer influence for Vistage, about how participating in a peer group can benefit executives.

What is peer advantage and how can it help CEOs and other leaders who struggle with isolation?

As CEOs, presidents and business owners, we all at times face ‘make or break’ decisions that will have great impact on our business and personal lives. The peer advantages are being able to make these decisions with the benefit of having the wisdom, experience and expertise of peers who have been in similar situations and been successful.

Feedback from staff is most often tempered by agenda, biases and fears. Even advisers such as accountants and lawyers may be afraid to offer their honest opinions for fear of being fired. Without a peer group, an executive can wind up with groupthink, reinforcing what the CEO thinks and not challenging his or her ideas. But pulling a punch in the idea phase can get a company beat up in the market.

What are some other key reasons a CEO might consider joining a peer group?

CEOs join peer groups because they want better results and better lives. Executives can benefit from an empathetic, impartial sounding board. They offer CEOs both the insights to make the best decisions and the increased confidence to act on them.

Another benefit is diversity of perspective. By engaging with CEOs from a broad range of industries, executives discover best practices that can be applied to their businesses that they would not likely have discovered by working with leaders within their own industry sector.

Why is vulnerability a necessary element for a successful peer group experience?

Executives’ peers can’t give solid advice if executives are unwilling or afraid to share everything about what they’re facing. That includes being open about thoughts and feelings that may be difficult to share. The outcome will only be as good as the input.

CEOs can be hesitant to say what they don’t know. They may be guarded out of the fear of being exploited or perceived as weak for not knowing. Being among a group of people that can be trusted in a setting that is safe, confidential and free of judgment, not only helps in meeting a particular challenge, but also serves to build an enduring trust among group members.

How can peer advantage benefit and accelerate business growth?

An unbiased peer group operates with the best interest of the members involved. It challenges them, supports them and holds them accountable to what’s most important to their role as an executive.

A peer group gives members an opportunity to talk openly about strategies they’re considering and get honest, direct feedback that will help determine if those strategies will make a positive impact in the market. It affords CEOs the opportunity to work on their business rather than in their business. Given the myriad activities executives must deal with that can be a distraction, talking with a peer group helps CEOs recalibrate and focus their attention on strategically positioning their company for the future.

A peer group environment is free of agenda and bias. It’s safe and confidential, and a place where each member can question the most important parts of a leader’s life and decisions. The feedback from such groups can provide options to the CEO that will help them become better leaders, which can only improve their company’s results.

The results are ultimately what matter. Dun & Bradstreet surveys have shown that companies that are members of peer advisory boards significantly outperform companies that are not in terms of compound annual growth rates.

Insights Leadership is brought to you by Vistage International Inc.

Multigenerational workforces require attentive leadership

Today’s workforce comprises workers from multiple generations, each of which is characterized by unique skills, traits and motivators.

That can be troublesome for business leaders who try to manage each employee the same. To achieve a high level of productivity, company leaders must learn how to harness each individual’s talents without displacing workers from any of the other three generations.

Dennis Sabol, Vistage Chair at Vistage International, says with the larger baby boomer population receding from the workplace, millenials will be the dominant generation in the workforce by 2020.

“Unless employers address this unique generation, they will not be able to attract and retain a workforce,” he says.

Smart Business spoke with Sabol about leading a multigenerational workforce and understanding the tendencies of millenials.

Why should leaders be aware of the tendencies of each generation?

One reason business leaders should be mindful of generational differences is because each generation has unique motivators. For example, those within Generation X are concerned with work/life balance; millennials want schedule flexibility because technology allows work to happen anytime, which makes the typical 9-5 shift too rigid; and boomers will work more than 40 hours to show their superiors that they’re willing to put in the time.

Millennials believe that their performance should be measured on results, not time.

They’re typically not motivated by money and they may have 12 jobs before they’re 35.

Boomers, on the other hand, tend to gauge performance based on hours worked. This generation is motivated by money and often work at the expense of time with their families to get money and status.

Workers from Generation X have a tendency to work hard during their scheduled hours but are put off if they’re asked to work overtime because they need a work/life balance.
Given these motivational differences, employers must create a work environment that’s productive while accommodating the tendencies of multiple generations.

What can be done to ensure generational differences are respected?

To appreciate the difference between the workers from each generation, have an open dialogue with employees to understand their unique needs. That can go a long way toward getting everyone to appreciate everyone else’s value.

There may, for example, be a perception by boomers that millennials are slackers. It may instead be the case that these workers have found better ways to get their jobs done and they don’t care to sit at their desk until after the boss leaves to show how hard they work.

Business leaders may need to rethink the perks and benefits they offer employees. For example, companies traditionally don’t offer a lot of vacation time for someone in their first year of employment. To appeal to the generations that are more interested in personal time than money, consider offering them one week of vacation with pay and one week without pay to start if two weeks paid vacation is not part of your policy.

What are some management techniques that generate a high level of productivity while respecting generational differences?

Most people stay at a job because they like their manager. Managers, then, need to relate to their employees better, get to know more about them and not treat them like a number.

Employees who feel they have a great boss that respects and values them are more likely to stick around.

Have flexibility in your management techniques so you can cater your style to the personalities that exist in your company. But that flexibility must be coupled with accountability. Employees need to know what’s expected of them and what their responsibilities are regardless of their generation.

As generational diversity increases in the workplace it’s important to understand that each person working at your company has their own motivators and tendencies. You can’t change their personalities, but you can shape their behaviors by steering their talents into opportunities for growth for them and the company.

Align the strengths of your company and your management with those of your employees for mutually beneficial outcomes. ●

Insights Leadership is brought to you by Vistage International Inc.

Cleared for takeoff

When leaving the runway for a
first-ever solo flight, nervous and
excited flying students can only trust that their instructor provided all of
the skills and knowledge required to fly
the pattern. But even if you hired the best
candidates, if you’re not willing to be “in
the plane” with them, teaching them
everything they need to be successful,
there’s a good chance they’re going to be
in for a bumpy landing.

“When you hire peak performers, the
tendency is to share with them what they
need to do, and then leave them alone to
go do it,” says Dr. Victoria Halsey, vice
president, Applied Learning, The Ken
Blanchard Companies®. “This has an
incredibly negative impact on new hires.”

Smart Business recently spoke with
Halsey to learn more about how to accelerate the productivity of new hires
through coaching, creating effective relationships, and understanding how they
best learn.

What early steps can help set up new hires
to succeed more quickly?

What people don’t realize is that new
hires may be very excited to be there, but
they are actually brand new at the bulk of
what they’re working on. In Situational
Leadership® II language, we call them
‘enthusiastic beginners.’ To ramp people
up more quickly, you need to rapidly
focus them on the most important things
they need to do and when, and then help
them get with others who are also going
to teach them how. They need a comprehensive on-boarding and action plan with
examples of what a good job looks like,
clear timelines and priorities. It’s also
important to help them develop the relationships that will accelerate their
growth and share ‘how we get things
done around here.’

How do supportive and directive behaviors
propel learners past the disillusioned learner phase?

New hires encounter a second wave a
few weeks after the initial ‘Bring it on,
I’m so excited’ phase. They hit the wall
thinking, ‘Wow, this is trickier than I
thought.’ Now they need someone there
to coach them through their flagging

When they are feeling discouraged, they
need to know ‘why’ what they are doing is
so important. They need praise for their
progress and either reteaching or redirection to build competence.

What are the benefits of teaching the
Situational Leadership
® II model’?

One of the benefits of teaching the
Situational Leadership® II model to new
hires is to have them see the stages of
development they’re going to go through
as they learn to be proficient in their
tasks and goals. They need to know that
when they first take on a task, they’re
going to be excited, though may not
know what to do — but then someone is
going to give them very meticulous direction. They also need to know that they’re
going to become a ‘disillusioned learner’
and receive coaching. They need to know
they’re going to reach a time when they
can do what it is they’re striving to do but
not feel fully confident about it, so someone is going to help them with a supporting leadership style to help them step
into their power.

Why should new hires learn to say, ‘I need’?

You should be teaching new hires to
come to you and ask for what they need.
The Ken Blanchard Companies’ research
shows that 54 percent of managers tend
to use just one style naturally before
training, while 34 percent use two styles,
11 percent use three styles, and only 1
percent of the population use all four
leadership styles. One reason new hires
aren’t brought up to speed as fast as people would like them to be is that leaders
aren’t giving them the specific direction
they may need because it isn’t the natural
style of the leader. New hires can help
managers to flex their leadership style to
both directive and supportive by learning
to say, ‘I need.’

How can leaders diagnose others to best
accelerate the development of new hires?

Developing optimal performance means
knowing your people. Great leaders
switch their attention from what they feel
like doing when their people say, ‘I need
help,’ to thinking about the person and
the specific task or goal. Great leaders
discover what people really need in terms
of direction and support to move to the
next stage, and then follow through by
giving it to them. Finally, great leaders
notice the good things people are doing,
find what’s unique in their people and call
it out with specific, descriptive praise.
What is their goal? To make people feel
brilliant and have early wins.

VICTORIA HALSEY, Ph.D., is vice president, Applied Learning, The Ken Blanchard Companies in Escondido. Reach her through The
Ken Blanchard Companies Web site at www.kenblanchard.com/halsey.

Core skills for new managers

Senior leaders struggle to provide new
managers with the operating framework they need to make sense of the
world they face when stepping up from subject matter expert and individual contributor
to the realm of management and leadership.

“The challenge for new managers is to be
able to work effectively in differing contexts
that sometimes occur in the same day, for different lengths of time, with different priorities or risks attached,” says Richard Egan,
senior consulting partner, The Ken
Blanchard Companies®. “The result is that
new managers, with good intentions at heart,
do what comes naturally or imitate the leadership style observed in other leaders.”

Smart Business learned more from Egan
about three key contexts faced by new managers and described in the book, “Achieve
Leadership Genius,” by Drea Zigarmi, Susan
Fowler and Dick Lyles. Egan explained why
new managers must understand that who,
what, where and when you manage and lead
should determine how you manage and lead.

What challenges are faced by SMEs moving
into management?

An individual worker or team member
focuses primarily on his or her job at hand.
That job is usually one in which he or she has
received extensive training and is a proven
subject matter expert. These workers also
are passionate about their chosen field. On
becoming a new manager, they often find
themselves in fast-paced, changing circumstances — or changing contexts — in which
they are required not only to continue to
manage themselves effectively but to also
manage others and lead.

What happens to new managers in the leading self context?

Self leadership is about having the skill and
the mindset to accept responsibility and take
the initiative for succeeding in your work-related role. The self context is the one in
which new managers are most familiar as
they have been excelling as individual contributors before their promotion. However,
the challenge now is to use and apply the
skills of being a self leader to the new role of
manager and leader. These skills include
aligning their personal mission, creating a
personal performance plan that includes
clarity of ‘key responsibility areas’ and goals,
identification of needs for direction and support, and effective management of time and
energy so performance and satisfaction are
maximized. Self leaders also seek out a mentor relationship to help navigate the path forward. One common challenge for the new
manager in the self context is to juggle new
management and leadership responsibilities
while continuing to make individual contributions as a subject matter expert.

When must new managers first handle more
complex interactions?

This occurs in the one-to-one context. It’s
more complex as it involves interacting with
others who may be similar to or different
from the new manager in terms of personality, skills, needs and motivations. A new manager may be required to perform various
roles depending upon the needs of others
and the immediate situation. The roles could
include supervisor, teacher, coach, mentor or
friend. Key skills in this context include: the
ability to clarify roles, priorities and performance standards of others; impart knowledge
and develop skills of others; manage the performance of and give feedback to others; and
have challenging conversations with others
when performance or behavior is not on
track. A typical challenge the new manager
faces in this context is to work effectively
with others who were former peers, colleagues and friends. Moving from being one
of the ‘gang’ to being the leader is sometimes
a tricky transition that requires thought,
intent and skill.

What is the most difficult context for new

The team context is exponentially more
complex. Here, the new manager is asked to
galvanize a number of individuals all potentially with different personalities, skills,
needs and motivations to achieve a common
purpose. The focus is collective and the new
manager has to work on maximizing two
group constructs — team productivity and
morale. A variety of roles may need to be performed including those of trainer, facilitator,
mediator and cheerleader. Key skills include
the ability to provide a team with structure
such as purpose, tactics, norms, methods of
communication, and the ability to manage
group dynamics and manage effective meetings — both face-to-face and virtual. A common challenge new managers face in the
team context is to lead cross-functional
teams. This requires the manager to negotiate resource allocation from different departments, manage the performance of individuals on the team who report to a different
function manager and develop the team as a
whole when members’ allegiances may lie
with their individual functions.

How can new managers increase their
chances for success?

For new managers, developing effectiveness in the self, one-to-one and team contexts
is the priority. If they can first diagnose the
current context in which they are operating
and then have a number of relevant skills to
deploy, they will increase their chances of
managing and leading effectively.

RICHARD EGAN is a senior consulting partner with The Ken Blanchard Companies in Escondido. Reach him through The Ken
Blanchard Companies Web site at www.kenblanchard.com/egan.

Data dilution

John F. Kennedy once remarked,
“Leadership and learning are indispensable to each other.” And people have taken this philosophy to heart.

They attend lectures, seminars and night
classes on a host of topics. They subscribe
to cable television services that provide a
nearly limitless smorgasbord of choices.
They proudly report to their friends that
they’re “on their third book this month.”
And they surf the Web. But how much of
this information really sticks? How much
of it has an impact on people’s lives, either
professional or personal?

“Very little,” says Dr. Dick Ruhe, a senior
consulting partner with The Ken Blanchard
Companies®. “And if there is a trend right
now, it’s in the wrong direction. Now, we
can get our hands almost immediately on
anything that’s out there. The problem is
there’s too much of it.”

Smart Business spoke with Ruhe about
this tidal wave of information and what to
do about it. He recently coauthored “Know
Can Do!” with Ken Blanchard and Paul J.
Meyer. The book deals head-on with the
challenge of getting things to stick.

What are the three reasons people don’t

The first is ‘information overload.’ There
is simply too much coming in. People
either don’t focus, or can’t. The mass of
data dilutes any one piece of it. We don’t
need more breadth, we need more depth.
The second is ‘negative filtering.’ People
close their own minds through negative
thinking. They critically question all new
ideas. Such evaluation is helpful, but too
much of it is crippling. The third is ‘lack of
follow-up.’ The research is clear that even
when people successfully incorporate
fresh information into their thinking, it rapidly goes away unless used very soon.

Can less actually be more when it comes to
reading and learning?

One of the problems that people have
with knowledge is they keep wanting to
know new things. Who wouldn’t want to be
in the group that wants to know new
things? Besides, they actually don’t have a
choice. We already know that most people
spend the majority of their communications time reading and listening, rather
than writing and speaking. So there is a
nonstop flood of information coming in.
People complain about being buried in it.

The problem is that people can only
emphasize a few things. Those who try to
emphasize everything emphasize nothing.
In order to take advantage of new information, we have to reduce this flood down to
the ‘critical few.’

The book mentions Green Light Thinking.
What is that?

Not only are people themselves hyper-critical, but they are surrounded by wet
blankets. When approached by others with
ideas, there is a natural human tendency to
look for what is wrong or at least the major
obstacles to adopting a new order of
things. A limited amount of this is OK, but
too much reduces any chance of running
with a new approach or solution.

We suggest holding people accountable
for Green Light Thinking. Before they can
say anything negative about something,
they must identify reasons and solutions
that support it. There will be plenty of time
later to coarse- or fine-tune the recommendation. During meetings it can make
sense to literally assign someone to be the
Green Light Thinker. The person becomes
the advocate and contributes the optimism and positive mindset that often are

How can you change the energy level people
have to do things differently?

An essential ingredient in making change
happen, any kind of change, is ensuring
that there are positive consequences in
place. Whether it’s for others or for ourselves, there must be a conscious or subconscious association of good things with
the initiative. Energy includes drive, motivation, attitude, inspiration, enthusiasm,
etc. All of these have a strong positive correlation with positive consequences. If you
go on a diet, recognize progress — any
progress. If you are trying to adopt a new
problem-solving system, celebrate success
in moving forward.

How does the concept of unconditional love
come into play?

This is quite related to positive consequences. People get so accustomed to trying to do better, they actually don’t even
see the improvement; they only see where
they could have done better. So they pre-dispose themselves to a critical, negativistic attitude. In ‘Know Can Do!’ we suggest
‘catching people doing something right.’
Many people go through their whole lives
trying to finally get approval from important others who may not even be with them
any longer — parents, teachers, coaches
and so on. There isn’t enough unconditional love. If there were, there would be less
dissatisfaction and depression and more
good in the world.

DICK RUHE is a senior consulting partner with The Ken Blanchard Companies. Reach him through The Ken Blanchard Companies
Web site at www.kenblanchard.com/ruhe.