Alberto Ferrer Blog » Management

Leading a Company in Tough Times

Alberto Ferrer — Mon, 03 Aug 2009 15:42:22 +0000

I recently read an article from the July 2009 issue of the McKinsey Quarterly called “Leadership lessons for hard times” (registration required) as part of their “managing in the new normal” series. The article is a collection of tips gathered from interviews with 14 CEOs of large (mostly multinational) companies. A few of the companies represented are Procter & Gamble, 3M, Travelers, Pepsi Bottling Group, AutoNation, and Macy’s.

As stated in the article, this is an interesting take on the current economic situation. Much has been written about the mistakes that have been made, about how we got to where we are now, etc. Little has been made of the learning from those mistakes or how to best lead an organization in less-than-rosy times. Here are the lessons:

Confront Reality Always question whether the “halo effect” of a business or business situation is blinding you to what lies on the horizon. —Herbert Henkel, chairman and CEO of Ingersoll Rand

At Board Meetings, Put Strategy Center Stage The board has been heavily involved in strategy formulation with me, and we have a better strategy because if it. —Bill Nuti, chairman and CEO of NCR

Be Transparent With Employees The only way to address uncertainty is to communicate and communicate. And when you think you’ve just about got to everybody, then communicate some more. —Terry Lundgren, chairman, president, and CEO of Macy’s

Be Transparent With Investors Our policy is: “If in doubt, communicate.” We always want to conduct our business with integrity and forthrightness. —Ron Sugar, chairman and CEO of Northrop Grumman

Build And Protect The Culture Stay focused on culture, people, and values: it’s the area most likely to get compromised in this environment. —Eric Foss, chairman and CEO of Pepsi Bottling Group

Keep Faith With The Future If you don’t invest in the future and don’t plan for the future, there won’t be one. —George Buckley, chairman, president, and CEO of 3M

While there is much to be learned from each of these lessons or principles, a subset of them resonated the most with me. First is the notion of transparency and communication. Especially in touch times (but at all times, really) there is ample opportunity for rumor and innuendo to take over. Communication (even over-communication) with stakeholders is critical to pushing forth an agenda and keeping the team with their eye firmly on the ball. Yes, it’s difficult to remain focused on the task at hand if I’m worried about losing my job. But communications from leadership of the organization about what’s going on can go a long way towards making me comfortable about the situation and about the folks who are leading the company through the challenging environment.

Another favorite is the confronting of reality. Addressing head-on the challenges of the day, whatever they may be, is not only more efficient but also more effective. I’ve been in corporate situations where the reality of the day (the forest) has been ignored (or perhaps set aside) while management focuses on something else (the trees) and the results have been more painful than needed. Especially in tough times, leaders need to take a good hard look at what’s in front of them and confront that reality however different, unexpected, or chaotic it may be. Only then can the organization truly begin charting its course through the situation.

Last is the point about the culture. In difficult economic times, it can be easy to throw out elements of company culture, reject company values, and lose sight of the people as you seek to swiftly control costs, for example. These short-term-focused actions, however, will have a profound effect on the company long term. A company is not just its balance sheet and income statement. In fact, a company is its people, the values that bind them together, and the culture in which they thrive. Short-changing that in difficult times will do much harm and impede the very recovery that management is trying to effect.

Taking a Look at Poor Leadership

Alberto Ferrer — Mon, 01 Jun 2009 22:06:28 +0000

In a short article in the June 2009 issue of Harvard Business Review, authors Jack Zenger and Joseph Folkman (from leadership consulting company Zenger/Folkman and authors (with Scott Edinger) of The Inspiring Leader: Unlocking the Secrets of How Extraordinary Leaders Motivate) take a very different look at leadership.

Instead of talking about how good leaders lead, or focusing on what makes great leaders, or anything like that, they looked at the opposite. Based on two research studies on executives and leaders, they examined those who failed and developed a list of the ten things most commonly missing in bad leaders. As they write, “every bad leader had at least one, and most had several.”

According to their work, the worst leaders:

Lack energy and enthusiasm
Accept their own mediocre performance
Lack clear vision and direction
Have poor judgment
Don’t collaborate
Don’t walk the talk
Resist new ideas
Don’t learn from mistakes
Lack interpersonal skills
Fail to develop others

The authors further note that the bad leaders they studies often were unaware of these behaviors.

This is interesting because the vast majority of the literature on leadership has been focused on the positive traits and behaviors of good leaders. This look at the flip side of the coin provides fresh perspective (even though some of the factors outlined above might seem somewhat obvious).

Being a good leader might be as much about exhibiting the good traits and behaviors as it is about not displaying the bad ones. Read the full article for the details.

Account Management or Client Service

Alberto Ferrer — Wed, 01 Aug 2007 23:04:58 +0000

You say “toh-MAY-toh” and I say “toh-MAH-toh,” the song exclaims, suggesting that it’s the same thing simply pronounced a little differently in each instance. Does a similar dynamic apply in the ongoing debate of Account Management versus Client Service? As I understand it, this is not a matter of simple semantics. It is a deeper discussion about what we do as agency folks.

Client Service is the older of the two terms and has been used for generations. I was part of the Client Service department when I started in the agency business many years ago. The term is easy to understand (“it’s the people who work with the clients”) and tried and true. It focuses on the client.

At the same time, there are those who see a more negative meaning here. They feel that the term connotes subservience (the “service” part of the term makes many an account person bristle) and a “jump!” “how high?” mentality that is not the reality in business today. They believe that today account managers lead client businesses and thus they need a term that more accurately reflects that: Account Management.

Account Management is a newer term that focuses on the account versus the client. It drives home the point that account people manage the client business rather than servicing anyone or anything. It’s perhaps a stronger term.

However, some people believe the term suggests that it’s taking the people out of the equation and that account managers are all about the business and not about the softer side. They feel the term connotes an arrogance about the account manager (we know what’s important, the account) versus giving clients their due.

And of course there’s the hybrid Account Service term, which perhaps means that we provide service to an account. Not loving that one.

To me, it really isn’t about the name. It’s about what’s behind it. In my opinion, we need a little account management and a little client service. My view, and what I tell my teams, is that we need to do both.

We need to do Account Management. That is, we need to manage the client’s business. We need to manage their account, get the work done, lead the process, etc. That’s the nuts and bolts part.

We also need to do Client Service. At the end of the day, agencies are in the service business where clients pay the bills. And by clients I mean human beings. These are the folks with whom we interact every day, the folks who approve (or not) our briefs, our work, and our fees. We need to provide service to them, to be a resource to them, to be nice and engaging to them, to be accommodating and sympathetic. You get the point.

Clients hire and fire agencies both for the quality of the work and for the human element of the relationship (among other factors). Therefore, having a strong relationship with both the account (the business) and the client (the people) is critical.

The best work done by arrogant jerks will get you fired just as crappy work done by the nicest most accommodating people in the world will. The challenge is balancing both in a way that the client feels listened to, understood, and valued as a person and contributing member of the team, while managing the business as passionately as if it were your own.

Teams Are Impacted by Leaders’ Moods

Alberto Ferrer — Tue, 31 Jul 2007 00:07:38 +0000

A paper recently published in the Journal of Applied Psychology describes the results of a study seeking to link the moods of leaders with their teams. I read an excerpt of the paper as published in Rotman, the magazine of the Rotman School of Management at the University of Toronto.

Authored by Stéphane Côté from the Rotman School, Thomas Sy from California State University, and Richard Saavedra from the University of New Hampshire, the study showed causal links between the mood in which a leader is and the performance of his or her team. Below are some key points.

Findings

Leaders’ moods are transferred to group members. This is probably no surprise to most, but the study produced evidence that individuals with a leader in a good mood were in a good mood mode than in a bad mood and those with a leader in a bad mood experienced the opposite. This “transfer of mood” was also observed at the group level, where the leader’s mood affected the moods of the group as a whole.

Leaders’ moods impact group processes. The two processes that were studies were “effort” and “coordination.” In terms of effort, the authors found that groups with leaders in a bad mood tend to exert more effort on the task at hand than groups with leaders in a good mood.

This is believed to be because when the leader is in a good mood, the group takes that cue to mean that the work is satisfactory and thus they can relax. When the leader’s mood is bad, however, the group interprets that to mean that they’re not measuring up and so they redouble their efforts.

In terms of cooperation, the findings are more consistent with common belief. Groups with leaders in a positive mood exhibited more cooperation than those with leaders in a foul mood.

The authors presume this to be related to the effort findings above. Groups with a leader in a good mood, while relaxing their efforts, also feel more secure and thus behave in a more agreeable and cooperative fashion. Those with leaders in a bad mood, on the other hand, exhibit the opposite behavior.

Implications

Leaders must understand the role of moods to be successful. To be effective, leaders need to understand how their moods impact their teams so that they can manage those moods accordingly.
Leaders must efficiently regulate their teams’ moods. This means not just focusing on the mood of individuals but rather on the overall group mood (the so called “group affective tone”) to be effective.
Leaders can influence their groups by regulating their mood displays. The display of the leader’s mood to subordinates can be managed to attain the desired outcome from the team.

It used to be that emotions in the workplace were seen as unprofessional or otherwise negative. More and more, emotions are being seen as a non-trivial part of organizational performance.

Building Leaders vs. Building Leadership

Alberto Ferrer — Tue, 10 Jul 2007 15:56:25 +0000

I recently read at article by Dave Ulrich and Norm Smallwood in the July-August 2007 issue of Harvard Business Review that advocates companies focus on leadership instead of leaders. The authors are partners and co-founders of RBL Group, a leadership development and human resource education consultancy.

The authors submit that some companies produce a steady supply of strong managers because instead of focusing on building up the strengths of individual people, they concentrate on developing a “broad organizational leadership capability.” That’s what they call a Leadership Brand.

Firms that have leadership brands use an “outside-in” approach to develop their executives. That is, they look outside at what they want to be known for by clients and customers and then link that with required management skills for their executives. For example, Lexus takes it “The pursuit of perfection” tagline and translates it into an expectation that its leaders excel at managing quality processes. The outside-in approach helps companies develop a reputation for high-quality leaders whom clients can trust to deliver on the company’s promises.

The authors looked at 150 companies with reputations for strong leadership and found that those organizations follow five strategies. Those strategies are:

Ensure managers master the basics of leadership—for example, setting strategy and developing talent.
Ensure that leaders internalize the’ high expectations of clients.
Incorporate client feedback into evaluations of executives.
Invest in programs that help managers hone the right skills by tapping clients to participate in them.
Track the success of efforts to build leadership bench strength over the long term.

What results, the authors conclude, is “outstanding management” that persists even when individual executives leave the company. In fact, companies with the strongest leadership brands often become “leader feeders” and generate executives who go on to head other companies. Examples of these firms are GE, PepsiCo, P&G, Disney, Toyota, and Kraft, among others.

The authors actually provide a list of companies that they consider leadership brand companies and their P/E ratio compared to their category (they used the past ten years’ worth of data). The chart below shows that consistently a leadership brand is correlated with higher P/E ratios versus the category.

How do you rate? The following graphic shows a short assessment test that will help leaders determine their company’s leadership branding capability.

24 or less: Start working on the fundamentals of leadership. 25 to 34: Select one or two dimensions where you’re not yet strong and focus on improving them. 35 to 44: You are well on your way to becoming a leadership brand company. 45 or higher: You’re sitting pretty, pat yourself on the back.

Prioritizing Tasks at Hand: GTD

Alberto Ferrer — Sun, 17 Jun 2007 16:08:27 +0000

Sometimes we have more tasks on our to-do lists than we have time or resources in which to do them. Perhaps most of the time. How to prioritize? A common (yet erroneous) approach is to prioritize by due date. Start with what’s due first, continue with the task that is due right after the first one, and so on.

If you know Getting Things Done, you’re familiar with the Four Criteria Model for choosing tasks. It’s where the rubber meets the road in GTD, because it’s the way you decide, in the moment, how those tasks get done.

As common sense as it seems to GTD’ers, this model is one of the more controversial aspects of Getting Things Done for a simple reason: it posits that priority is not the only factor in deciding what to do at a given time. It’s just one of four factors:

Context – Where are you? What tools are available? What are the limits and possibilities unique to this moment?

Time Available – Do you have, for example, 30 seconds, 30 minutes, or 30 hours available to you right now? What tasks could you accomplish given the time you have?

Energy Available – Are you full of energy, are you dragging, or are you somewhere in between? Which of the tasks on your list could you finish, given that energy level?

Priority – If you had access to all the tools, opportunities, time, and energy you needed, what’s the most important or time-sensitive thing you could do right now?

Most of us have been conditioned to think that Priority trumps everything, all the time. But is it true, reasonable, or even physically possible to always work this way? Can you will yourself into doing only your identified high-priority items anytime, all the time?

Probably not, so maybe you ought to give this approach a try

Information Freedom

Alberto Ferrer — Fri, 18 May 2007 23:43:24 +0000

When I was working at Leo Burnett as an AAE, I thought quite highly of myself. There I was, making $16,000 per year, working on the prestigious Procter & Gamble business. I had my very own cubicle, my very own key to come in and out of the office (no access cards back then), and my own extension (no direct lines back then). I even had use of the three IBM PCs that were available to the Client Service department. I thought I had it made. I also thought I knew everything.

It got to the point that I thought I knew more than my boss, the Account Supervisor on the business. I ran my projects well, with not a ton of supervision, and usually with no issues. I even had some minor client contact and did not embarrass myself or the agency. I thought that I was indispensable. And that’s when it started.

I began to keep my boss just a little less informed than normal, and give her information just a little later than before. I started sharing less, less often, and later. I was the keeper of the information. I had the knowledge. She didn’t. Knowledge is power, they say, so I was powerful. I continued like that for a while, almost walking on air intoxicated by my perception of power. I was like the squirrel stashing away nuts for the winter, storing away information so that I could sound smart or knowledgeable (more up to speed or up to date than my boss, even) if anyone asked anything.

Hoarding makes your cheeks floppy

Then it happened. We had a problem. A big problem. A big client problem. It was traced back to part of my work, to things that I managed. Things that I had been managing myself without sharing as much with my supervisor. All of a sudden, all eyes were upon me. Lots of questions were asked “how could this happen?” was a popular one), all the way up to the Director of Client Services. I was freaked out and afraid I’d lose my job (which made sense considering that my not sharing information had kept the agency in the dark about something that seemed insignificant to me then but to the trained eye of my managers would have meant something).

In the end, no one was fired and things were cleared up. My Account Supervisor heroically covered for me and taught me a huge lesson in the process. From then on, I was the most prolific sharer of information out there. I learned that having the information itself does not really give any power. It’s knowing what to do with it that does. It’s not about having the information and keeping it to yourself (where’s the power in that?). It’s about the power of sharing it and letting those around you know that you have it (that’s power).

I learned that the more I shared with my Account Supervisor, the more she saw how I was understanding things, managing things, and being proactive. That helped her assess my performance and it allowed me to grow. It also made my boss look good. And there I learned that making my boss look good makes me look good. It all trickles down.

Information about the client business, about a project’s status, about what someone said in a creative presentation related to our work, all wants to be free. Sharing it often with your supervisors lets them stay abreast of what’s going on (which is part of your job) and helps them help you do yours (which is part of their job).

Keep your boss informed of things so that he or she is not surprised (in any business, surprises are not exactly welcome) by any development. Keep your team abreast of what’s going on so that everyone benefits from your information and you benefit from theirs. And don’t hoard. It makes your cheeks floppy.