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The Journal of the American Management Association

Volume 13, Number 3

Fall 2014

Brian Tracy on Achieving Unlimited Sales Success OTHER ARTICLES Managing Paradox from the Front Line to the Top Line The X Factor in Successful Acquisitions: Getting the Human Side Right The Innovator’s Manual: Eight Tools for Fostering Innovation From Effective Action to Strategic Vision: Transitioning to the C-Suite Four Tools of Ethical Management Executing the Strategic Plan: Five Actions Midlevel Leaders Can Take Becoming an Energy Director to Lead and Achieve Developing 21st-Century Leadership Skills Brian Tracy

The Generic Leader Network and the “Acceptance App”

COMMENTARY

SOUNDINGS

CREATIVE INSIGHTS

OUR VIEW

Prescription Price Controls: Fear Us, Not the Government

Data Holds the Key to Successful Management

Seven Scientific Principles That Turbocharge Presentations

There’s No Place Like the Classroom

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The Journal of the American Management Association

Volume 13, Number 3

FA L L 2014

BRIAN TRACY ON ACHIEVING UNLIMITED SALES SUCCESS. Brian Tracy, chairman and CEO of Brian Tracy International, talks about one of his recent books, Unlimited Sales Success: 12 Simple Steps for Selling More Than You Ever Thought Possible, and shares some secrets about improving sales performance. PAGE 6

Managing Paradox from the Front Line to the Top Line. In large organizations, most frontline employees

Developing 21st-Century Leadership Skills.

The Generic Leader Network and the “Acceptance App.” Accepting your own potential will

are still trained to solve puzzles but to try to move paradoxes upward. By David Dotlich, PhD.

The X Factor in Successful Acquisitions: Getting the Human Side Right. The reason why most mergers fail is that a highly important component of M&A activity has been overlooked: the “human element.” By Stephen W. Shippee.

The Innovator’s Manual: Eight Tools for Fostering Innovation. For innovation to become a functional approach to company growth, it must be more than just a buzzword. To truly support a culture of innovation, leaders should focus on eight critical skills. By Don Mroz, PhD.

From Effective Action to Strategic Vision: Transitioning to the C-Suite. Achieving success in the C-suite requires clarity of purpose, an understanding of the broader business, inspirational leadership, and an ability to anticipate and adapt quickly to change. By Gail Angelo.

Four Tools of Ethical Management. These tools

Executing the Strategic Plan: Five Actions Midlevel Leaders Can Take. Although senior leaders

will help you get others to agree with you without assessing the penalties associated with less effective, more manipulative approaches to influencing others. By Mark Pastin.

may be responsible for developing the strategic plan, it is the responsibility of midlevel leaders to translate this strategy into operational-level plans and actions that will result in execution throughout the organization. By Daniel Jensen, PhD.

Becoming an Energy Director to Lead and Achieve. What is the role of a manager in optimizing employee energy and directing that energy at objectives which are important to the organization? It’s a key topic for anyone who needs to lead people or projects and achieve success. By Theresa M. Welbourne, PhD.

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Companies are facing new leadership challenges, including developing millennials and multiple generations of leaders and acquiring new levels of understanding of rapidly changing technologies. By Adam Canwell, Vishalli Dongrie, Neil Neveras, and Heather Stockton.

not automatically open doors for you, but it will allow you to see the opportunities that stand before you. By Robert C. McMillan.

2 FROM THE EDITOR The Facets of Leaders 3 COMMENTARY Prescription Price Controls: Fear Us, Not the Government. Let’s take charge of our own destiny and grapple with the problem ourselves. By Sander A. Flaum.

4 SOCIAL COMMENTARY Why Strong Relationships Matter. To cultivate winning relationships, you need to get to know the person behind the online account. By Morag Barrett.

24 SOUNDINGS Data Holds the Key to Successful Management. Today’s managers can leverage a vast amount of data to equip their organization and collect a constant stream of data about people, projects, work, and the business environment. By Leerom Segal, Jay Goldman, and Rahaf Harfoush.

31 CREATIVE INSIGHTS Seven Scientific Principles That Turbocharge Presentations. The most popular TED presentations share several common elements that are based on the science of persuasion. By Carmine Gallo.

48 OUR VIEW There’s No Place Like the Classroom. By Edward T. Reilly. 1

FROM

THE

EDITOR

The Facets of Leaders

MWorld The Journal of the American Management Association

Hello, everyone. Allow me to introduce myself as the guest editor of MWorld. As a newspaper journalist and editor in chief of a B2B magazine focused on the pharmaceutical industry, I’ve had the opportunity to interview many managers in the industry and have written many articles about how these executives are leading their companies and facing today’s challenges. This issue is packed full of interesting articles about leadership—how to lead, the best ways to manage, and even the best ways to use data as a management tool. No matter what industry you are in, you’ll find valuable insights you can apply in your workplace. To track down and predict problems at a company, executives may want to note “Data Holds the Key to Successful Management,” by Leerom Segal, Jay Goldman, and Rahaf Harfoush. Segal and Goldman, executives at the digital ad agency Klick Health, and Harfoush, an author and lecturer, wrote The Decoded Company, which talks about how companies can use data to improve operations. A visit to Klick’s offices in Toronto shows how the agency continuously gathers data about its employees, from their movement from floor to floor as they work on projects to the amount of coffee consumed in the breakrooms. For Klick’s managers, data on employee movement can translate to a more efficient execution of work for clients, and data on coffee consumption leads to wellstocked breakrooms, which increase employee satisfaction and, in turn, assist with retention. There’s also David Dotlich’s “Managing Paradox from the Front Line to the Top Line.” Dotlich examines how frontline employees need to be able to handle paradoxes as well as puzzles. Because many customer issues today are paradoxes, customerfacing employees must be trained to handle these problems to avoid a social media meltdown. In addition, good leadership skills need to be cultivated in every facet of a company. For managers on the sales side, the cover story/Q&A with Brian Tracy of Brian Tracy International addresses how to achieve sales leadership. Tracy gives practical tips based on his book Unlimited Sales Success (AMACOM, 2013) that are so effective AMA has developed a new seminar based on the book. This issue of MWorld should hold information you can use on, and maybe even off, the job. Our next issue will look at the challenges faced by women in leadership and how these issues can be addressed.

GUEST EDITOR

Christiane Truelove CREATIVE DIRECTOR

Seval Newton COPY EDITOR

Eileen Davis GRAPHIC ARTIST

Tony Serio PRODUCTION MANAGER

Laura Grafeld

PUBLISHER

Christina Parisi PUBLIC RELATIONS MANAGER

Roger Kelleher

Edward T. Reilly PRESIDENT & CEO

MWorld© (ISSN 1540-2991) is published quarterly by American Management Association International, 1601 Broadway, New York, NY 10019-7420, Fall 2014, Volume 13, Number 3. POSTMASTER: Send address changes to American Management Association, 600 AMA Way, Saranac Lake, NY 12983-5534. American Management Association is a nonprofit educational association chartered by the Board of Regents of the State of New York. MWorld is an independent forum for authoritative views on business and management issues. Submissions. We encourage submissions from prospective authors. For guidelines, write to The Editor, MWorld, 1601 Broadway, New York, NY 10019-7420 or email CParisi@amanet.org. Unsolicited manuscripts will be returned only if accompanied by a selfaddressed, stamped envelope. Letters are encouraged. Mail: Letters, MWorld, 1601 Broadway, New York, NY 10019-7420; email: CParisi@amanet.org. MWorld reserves the right to excerpt and edit letters. Names and addresses must accompany all submissions. Subscriptions. Executive and Individual Members of American Management Association receive MWorld as part of their annual dues, a nonrefundable $50 of which is allocated for the subscription to MWorld. Single copies are available at $25 plus shipping and handling. Requests should be sent to sgoldman@amanet.org Rights and permissions. ©2014, American Management Association. No part of this publication may be reproduced or transmitted in any form or by any means without written permission. Requests should be sent to Joe D’Amico, at jdamico@amanet.org Editorial Offices 1601 Broadway, New York, NY 10019-7420 Tel: 212-903-8075; Fax: 212-903-7948 Email: MWorld@amanet.org

Christiane Truelove Guest Editor, MWorld 2

Opinions expressed by the editors, contributors or advertisers are not necessarily those of AMA. In addition, the appearance of advertisements, products or service information in MWorld, other than those of AMA itself, does not constitute endorsement by AMA.

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COMMENTARY

Prescription Price Controls: Fear Us, Not the Government Anyone connected to healthcare knows that costs are out of control. Of course, most of the increases are due to skyrocketing hospital costs, but I’m in pharma, so let’s focus on drugs. The UK tries to hold down costs with its National Institute for Health and Care Excellence, but in the United States we’ll never see Medicare jawboning down the price of medicine. Nor would we ever want to. So what’s the answer? A recent approach is coming from pharmacy benefit managers (PBMs). Since it’s now against the law for insurers to drop patients who become ill and exclude those who already are, they’ve been looking for ways to protect their pockets. Insurers aren’t afraid of the new generation of lifesaving biologics that cost $200,000 a year and up. What terrifies them are the ancient billion-dollar brands, such as GlaxoSmithKline’s Advair Diskus, that remain protected from generic competition. This year, Express Scripts, the country’s largest PBM, struck a deal with AstraZeneca. In return for a contracted price on Symbicort and other drugs in AstraZeneca’s respiratory franchise, Express Scripts would drop Advair and other GlaxoSmithKline respiratory drugs from its formulary. This means that if your insurance provider uses Express Scripts as a PBM, you’ll have to pay every dime out of pocket if you’re prescribed Advair. It’s as if Express Scripts had announced: “As far as we’re concerned, these two drugs are therapeutically equivalent, and we’re only going to pay for Symbicort. If your doctor writes Advair, you’d better ask for another Rx.” Although the New York Times typically lauds any attack on a pharma company, in an editorial appearing on June 24, 2014, the paper was wringing its hands: “Regulators need to watch out that insurers, in their zeal to curb drug costs, don’t block patients from medicines they need when an alternative is not adequate.” Well, duh! We’ve been shouting from the rooftop that vendettas focused on price and blind to value MWORLD FALL 2014

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BY SANDER A. FLAUM

have the potential to cause long-term harm to our healthcare system, not only by undermining the role of Sander A. Flaum physicians but also by removing the incentive to develop new drugs. Maybe this is a wake-up for more involvement. I recently learned of a survey conducted by a group called eyeforpharma. (You can find the survey, The Industry Healthcheck, at eyeforpharma.com/ download/content-healthcheck.php and download it for free.) They quizzed some 1,600 pharma executives from around the world and found beliefs that may be the seeds of tomorrow’s trends. For me, the most striking finding was that nearly 75% of executives predicted that pharma companies will need to enter the business of actually providing healthcare, and 85% believed they will need to become more patient-centric. A model in which the pharma industry helps to deliver healthcare couldn’t be worse than our current model, with its baffling maze of regulations and an antiquated FDA, which lacks the tools, teeth, and courage to cope with the new drugs and drug combinations that are being minted almost monthly by the genomic revolution. Perhaps it’s time to blue-sky about how we in the pharma industry can move beyond the industry we grew up in and adopt a model in which we actually help provide healthcare solutions. It’s really our choice. Will we allow PBMs and their counterparts to push us around like the government bureaucracies we’ve always feared? Or will we take charge of our own destiny and grapple with the tough problems ourselves? MW Sander Flaum is principal of Flaum Navigators, where he encourages and coaches his clients to embrace disruptive innovation in marketing, sales, and leadership.

SOCIAL

COMMENTARY

Why Strong Relationships Matter BY MORAG BARRETT

In a recent article, the Harvard Business Review reported that social bonds were the major Morag Barrett predictor of team success. The other two were “initiatives to strengthen relationships” and “leaders who invest the time to build strong relationships with their teams.” If team success (and individual success) is dependent upon social bonds, then it would follow that getting to know team members and articulating the rules of engagement for the team are good investments of time, right? Rules of engagement support strong relationships by anticipating how team members will interact with each other as they work on projects and pursue goals. But in the age of technology, creating social bonds is much easier said than done. Email has become ubiquitous, to the point that it actually undermines performance. In a recent program presented by my team, leaders reported that they receive several hundred emails a day. This technology keeps leaders tied to their desks and prevents the creation of meaningful connections at work. I experienced this situation when I worked in a large telecommunications firm where an egalitarian environment backfired. We were a company of cubicles. You could walk through corridors but not see anyone. People used email to chat with team members sitting 20 feet away, and we wondered why co-workers didn’t have real bonds. Contrast this with another workplace that was completely open: no walls, no hiding, and no excuses. Team members could simply raise their heads and talk to the person next to them. It led to a much different culture, where camaraderie and team relationships flourished. Don’t get me wrong. We still needed time away from the hubbub of the office and private places to

hold confidential conversations. I’m not suggesting that you start knocking down walls to build relationships (although, now that I think of it, yes I am—the metaphorical walls that prevent us from getting to know the person in the next office). My experience in both of these environments shaped my credo: “Get off your butt and go talk to someone!” As you set out to create social bonds, be wary of the perception that building relationships is “soft and fluffy.” This perception leads us to undervalue the time needed to focus on the interpersonal side of business. I remember being told early in my finance career, “This is a business; there is no place here for emotions or personal connections. It’s not personal.” Given this manager’s philosophy, it’s little wonder that trust within the company’s teams declined and confidence in the team leader was diminished. Another key element in building strong relationships is to create—and follow—the rules of engagement. In many cases, even when teams get together to plan how they’ll achieve a goal, they simply go through the motions of creating working agreements and clarifying goals and roles, then promptly ignore them when they get back to their desks. We all know when the rules of engagement in a workplace have been broken. We sit in meetings drumming our fingers and clenching our teeth in frustration. We vent to our families and friends, but we remain silent at work. We don’t air our concerns for fear of facing repercussions or making an already stressful situation worse. We justify and excuse the situation because no one

“Having virtual connections does not equal having effective working relationships.” 4

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SOCIAL

COMMENTARY

else is speaking up. We believe it’s the way things have to be, and we don’t want to go against the grain. We avoid tough conversations with the very people who could effect change—our colleagues—and even with ourselves. Invariably, the inability to “talk it out” causes the situation to worsen until the relationship is so damaged there is little hope for reconciliation, at which point one or both parties leave the organization. You’ve seen it happen—perhaps in your own career. When you set the rules of engagement at the start of a relationship or project, you can ask for what you need to be successful and more easily course-correct when things go off track. Notice that I said “when,” not “if.” I’ve worked for managers (and colleagues) who assumed I could read their minds, only to come down on me like a ton of bricks when my sixth sense fizzled. And I’ve been guilty of this same reaction myself. Articulating the rules of engagement sets you up for success, both on the good days when things are going well and, more important, during the turbulent times when many of us revert back to inappropriate behaviors—micromanaging, command and control, and passive-aggressiveness, to name a few. The following steps can help you create rules of engagement: ᔢ Ensure that the two parties are in agreement about the objectives to be achieved ᔢ Agree on levels of authority and decision-making responsibilities ᔢ Articulate roles and responsibilities ᔢ Understand individual personalities and communication and decision-making styles, where these are in alignment and where they may be different, and how values and behaviors will be important to success ᔢ Establish meeting cadence—where and how often meetings will occur ᔢ Agree on an escalation process, determining when and who to ask for help or provide warnings of impending disaster ᔢ Set feedback and coaching expectations By learning to set expectations, you’ll find clarity about who you can rely on for advice and who can be a filter for tough decisions. Your team will also know who can be called on when you don’t know how to solve a problem. RULES OF ENGAGEMENT

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Cultivating winning relationships isn’t just about getting business results today; it’s also about the quality of your working relationships and your network overall. Are you on a path to deliver long-term success in your career aspirations? As has always been the case, “who knows you” trumps “who you know.” In today’s hyperconnected world, this reality is even more pertinent. With LinkedIn, you are only a few degrees removed from a hiring manager. Trust me, the savvy recruiters are reaching out to your connections for their perspective. In this environment, you must do more than collect business cards, Facebook “likes,” or LinkedIn connections. You must be thoughtful about developing your brand. Remember, however, that even when you use social media or a similar company tool to build connections within your organization, having virtual connections does not equal having effective working relationships. To cultivate winning relationships, you need to get to know the person behind the online account. Your success depends on it. As it turns out, business is personal—and relationships do matter. WHO KNOWS YOU?

Morag Barrett is the author of Cultivate: The Power of Winning Relationships (Franklin Green, 2014) and the founder of SkyeTeam, an international HR consulting and leadership development company. Barrett's experience ranges from senior executive coaching to developing teams across Europe, America, and Asia. SkyeTeam works with clients in a range of industries, including healthcare, telecom, mining, manufacturing, engineering, and technology. For more information, visit www.skyeteam.com

COVER STORY

Brian Tracy on Achieving Brian Tracy is chairman and CEO of Brian Tracy International, a company specializing in the training and development of individuals and organizations.

Brian Tracy

As a keynote speaker and seminar leader, he addresses more than 250,000 people each year. He is the top-selling author of more than 45 books that have been translated into dozens of languages. One of his most recent books, written with his son Michael Tracy, is Unlimited Sales Success: 12 Simple Steps for Selling More Than You Ever Thought Possible (AMACOM, 2013). In collaboration with Tracy, AMA has developed a new seminar based on the book. The seminar is titled Unlimited Sales Success: Mastering the New Realities of Selling. AMA spoke to Tracy recently about the book and about the “secret” to sales success.

You’ve written many books on various management and sales topics. Why this book, and why now? Brian Tracy: Many books about sales go into what I consider very complex models of selling, whereas the selling model which I have taught to more than 2 million people worldwide is very straightforward. I’ve had countless people say that this model has taken them from rags to riches. It’s taken their companies from struggling to being top companies in the industry. It’s a very simple model, and I teach it all over the world. People just walk out and their sales double and triple. I decided it’s time to get back to basics, the really critical skills. It’s sort of like if you’re going to build a tall building, you build a deep foundation. Well, many people start furnishing the offices before they’ve built the building. This book provides the foundation on which all subsequent selling can be built.

How can a salesperson figure out which skills or behaviors are responsible for limiting his or her success? And which ones, based on your experience, are the most prevalent? BT: I do a little exercise to help people identify their weakest sales skill. I say, “Imagine you could wave a magic wand, and overnight you could be absolutely excellent at any one sales skill. Which one skill would help you the most to double your sales and double your income? Surprisingly enough, it’s like a heat-seeking missile: Whichever skill they identify that could help them the most to double their income is their weakest key skill. It’s their 6

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Unlimited Sales Success limiting skill to sales success. And so they write it down and I have them discuss it with the people around them. I tell people this: You have to understand that all sales skills, all business skills, are learnable. You can learn any skill that you need to learn, once you’ve identified what it is. Just like building a house or going to the grocery store, you make a list and you plan out your own little learning curriculum to develop that skill. And a month, six months, a year from now, if you just work at it every day, you will absolutely excel in that skill and your income will have doubled and tripled.

That’s sound advice for anyone who’s having career problems. BT: Well, yes. I heard this just yesterday at a meeting: “My biggest problem is hiring a key person. I’ve gone through five people in that position in one year, and I’ve learned how important it is to fire fast.” So the question is, why are you having such a hard time hiring? The answer is you don’t know how to do it. The skill of selecting the right people is one of the most important skills for success in business. If you cannot do it, you have no future; you’re basically finished. But it’s a learnable skill. The great danger is the old talk about levels of competence. There is the “unconscious competent,” the person who does not know and does not know that they do not know. They can’t be helped. This is the worst case of all. People say, “Well, I know how to hire. You just bring somebody in, you chat with them for a while, and you listen to your gut and so on.” Absolutely not. In management, hiring the right people—and every single successful company knows this—is as much as 90% or 95% of business success. It is a very definite and very learnable skill. So every person has to ask, “What one skill, if I was excellent at it, would have the greatest positive impact on my career?” And then you just go learn it.

How should a salesperson handle the dreaded fear of rejection? BT: We have found this to be the greatest single obstacle to success. Daniel Pink, in his book To Sell Is Human, calls it “facing the ocean of rejection.” You have to realize that when a person rejects you or your offer, it’s not personal. It has to do with them, their own opinions and ideas, and a thousand other things. So don’t worry about it. Just keep proceeding with complete confidence that if you keep going, you will be successful. And eventually, as Shakespeare said, “Take action against the sea of troubles, and in so doing end them.” When you take action and do the opposite of what you would do if you had feared rejection, and instead you just dare to go forward, the fear disappears. Just keep talking to yourself: “I can do it. I can do it. I like myself. I like myself. I’m the best. I’m the best. I’ve done this before. I can do it again.” Just keep feeding your mind a steady stream of positive messages.

How do you define a good prospect? BT: One of the things salespeople have to understand is, you don’t find somebody and talk them into buying your product. You find somebody who already wants and needs your MWORLD FALL 2014

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product, and you show them that your product is the best choice, all things considered. Good prospects have one or more of four qualities:

1. They have a need that your product can satisfy immediately. One of the jokes that I use is, imagine you sell hand-held fire extinguishers and you meet a person whose hair is on fire. That’s a good prospect. They have an immediate need for your product. They want to buy it now, they need it now. And when a person has an intense need, they are far less pricesensitive. 2. They have a problem that your product will solve. In fact, we say in selling, your job is to find people who have a problem that your product will solve for them in a cost-effective way. Because once a person concludes that you are the solution to his problem, the sale is made. 3. They have a goal that your problem can help them achieve. For example, financial services are a trillion-dollar industry. What is the goal? People want to earn more money on their money, and they want to be financially secure and financially independent. They want to have enough money so they don’t worry about money. You can show them that your financial services will help them reach a point where they are financially stable and never have to worry about money again, that your services are the very best way of achieving that goal. 4. They have a problem, they have a pain, or they have a concern. They have something that’s really concerning them that you can help them solve. For example, if you’re selling personnel services, their biggest problem may be that they don’t have a key person in a key job, and this is a pain that causes them a lot of distress. You can say, “Look, I can help you find exactly the right person for that job. I can take your pain away.” In addition to these four qualities, the person must want it, the person must need it, the person must be able to use it, and the person must be able to afford it. I tell people to spend more time with better prospects. And if you find yourself with a poor prospect, recognize this as a poor prospect and cut it off quickly. Say, “You know, I think that this is really not the right choice for you at this time, and so thank you very much for your time. I know how busy you are. I’ll let you get back to work.” Remember, every minute you spend with a poor prospect is a minute that you are taking away from a good prospect.

Here’s the question every salesperson wants to ask you: How do you close the sale? BT: Well, we say that you sell without selling. If you sell professionally, the close almost takes care of itself; all you really have to do is confirm. A good presentation means that after you have interviewed the customer, like a doctor doing an examination, you then feed back to the customer, “Based on what you’ve told me, I think that what we have would be a good choice for you. Let me explain what it is and how it works.” So you don’t actually sell, you teach. And by teaching, you persuade indirectly. There are two parts of an effective presentation that lead to the close. The first is called “show, tell, and ask questions.” You show the customer, this is a ballpoint pen. You can use this to write on any surface. Is this something that would be of value to you in your business? Show what it is, tell what it does, and ask for feedback. For every single feature, attach a benefit, and then ask a question for feedback, so that the customer is completely engaged. The key to an effective presentation is to match your product, like fingers in a glove, with the customer’s stated needs. You say, “You said you needed this, and this will do that. And you said you needed this, and this will do that.” Because the rule is that people don’t argue with their 8

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own data. If they said they need it, and you say, “Well, this will do it,” they’re not going to argue with you; they’re going to agree. The second way of presenting is to point out what your product features and benefits are. You say, “Because of this” (you explain a product feature), “you can” (you explain a product benefit), “which means” (you explain a customer benefit). “Because of this low price, you can purchase more of them, which means you get greater satisfaction.” “Because of this...you can...which means,” which is one of the most powerful, persuasive, three-barrel techniques ever discovered, in any language. Now, how do you close the sale? At the end of the conversation, you simply ask the question, “Mr. Prospect, does this make sense to you so far? Do you like what I’ve shown you?” If the prospect says “Yes, it makes sense” or “Yes, I like it,” then you say, “Well, then, let’s get started.” You simply confirm that the prospect agrees that this is a good choice, and you wrap up the sale.

So you’re very open about that, when you wrap it up. BT: Yes. You treat your customers like they are intelligent, smart, educated. You treat them with respect and position yourself in the sales conversation as a helper. Your job is to help them enjoy benefits in a cost-effective way that they would not have enjoyed without you. Now, the research says that the perceived value to the customer is the difference between the price you charge and the benefit that they receive. So the price that you charge is largely fixed. So what you do is emphasize the benefit or benefits the customer will enjoy that will improve his or her life or work. And the more you emphasize benefits, the more you increase the perceived benefits, the less sensitive the customer is to the price, the more likely he is to buy immediately.

Is there anything else you’d like to add? BT: The most important part of selling is activity, call frequency, and calling on more people. Many people ask me, how can I double my income? And I say, well, double the minutes that you’re spending face to face with prospects today. Double the number of people you talk to on a daily and weekly basis. Organize your entire life, starting from first thing in the morning, so that you’re talking to more people and you’re spending more face-to-face minutes with them. If you double that, you will double your income based on the law of averages and the law of probabilities. Additionally, once you are face to face with a prospect, make sure that you are a thoroughly skilled, professional salesperson. It’s absolutely astonishing, the 80/20 rule applies: The top 20% of salespeople make 80% of the sales and earn 80% of the money. What this means statistically is that the top 20% earn, on average, 16 times that of the people in the bottom 80%. Here’s why: They have better sales skills and they use them more often. MW Learn more of Brian Tracy’s sales secrets by attending the AMA seminar Unlimited Sales Success: Mastering the New Realities of Selling (www.amanet.org/5205).

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Managing Paradox From the Front Line to the Top Line BY DAVID DOTLICH, PhD

On a recent business trip, I had two experiences that illustrated the complexity of leading people in organizations today. In one case, I was staying at a well-known hotel chain when I entered the hotel restaurant and, with no one at the host desk, waited a few minutes and then seated myself at one of many empty tables. Within a few moments, a server came by and asked me in a very concerned tone, “Did the host seat you? I’m not sure if it’s OK for you to sit here!” As I glanced around the halfempty restaurant, she asked me to return to the front and check in with the host, which I did. I was then ushered to the exact same table I had originally chosen. On the same business trip, I waited outside the airport with others in a heavy rainstorm for a rental car company bus to transport me to the rental car parking lot. When the bus pulled up, it was so completely full of people that the door could hardly open. The driver jumped out and said to the discouraged masses who were waiting, “You can try to squeeze on here, which I don’t recommend, or you could wait for the next bus, which is coming in five minutes. Or, you can take a taxi to the car lot, tell them I authorized it, and they will reimburse you.” I happily waited for the next bus, as I admired a company that would allow frontline employees to disburse company funds to keep a customer satisfied.

PUZZLES VS. PARADOXES Whether you are shopping, renting a car, or checking into a hotel, you interact continually with frontline employees who are faced every day with a set of complicated and opposing choices that are built into their jobs. As customers show up with more unique preferences, special requirements, and informed opinions, it is increasingly difficult to standardize and, more important, to rely on the judgment of those in customer-facing roles to customize responses. On the most basic level, all leaders—from frontline supervisors to C-level executives—are faced with two kinds of challenges: puzzles and paradoxes. Puzzles are problems with clear and defined answers, such as “How can I rebook this passenger on the next flight to his destination?” Or, “Should we buy this new computer equipment?” Paradoxes, on the other hand, are defined by two or more competing alternatives that might never be reconciled. They cannot be neatly solved, only managed with judgment and intelligence. These perplexing issues can be found everywhere: in the conflicting needs for purpose and profit, short-term and long-term goals, standardization versus customization, local versus global demands, and—as in the previous examples—following the rules or breaking them to make a customer happy. 10

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In large organizations, most frontline employees are still trained to solve puzzles but to try to move paradoxes upward. For example, if there isn’t a straightforward answer to a customer situation, an employee usually brings in a manager or someone higher up in the chain of command to make the decision. If that manager isn’t able to solve the paradox, then the issue is pushed up to the next level—all while the customer waits for a resolution. In the days when customers knew little, asked for less, and were unaware of their rights, this process worked pretty well. Today, learning organizations push paradoxes to the front line and train people to deal with them effectively. Most customer issues are paradoxes, and customer service people need to be empowered to make decisions in real time to both protect the company’s interests and serve customers’ individual needs. It’s a balancing act that requires judgment, intuition, and skill. In today’s world, an angry customer can tell a million of his or her best friends about a negative experience in the time it takes to type 140 characters or post a video to YouTube. This capability can do serious damage to a company’s reputation. Or, think about the employee on the manufacturing line who doesn’t balance the need to achieve production quotas with appropriate concern about quality. In a globally connected supply chain, massive recalls or even illness and death can be the result. Encouraging frontline employees to understand and manage paradox sounds easier than it is. In fact, it’s one of the fundamental reasons why companies fail to innovate, remain agile, and thrive. In short, it can be the primary reason why an organization or a leader fails. Period. Leaders at learning organizations need to take five steps to realize their highest potential—in terms of both individual career growth and company performance in the market.

ACKNOWLEDGE THE PARADOX We live in an increasingly complex, interconnected world, yet most organizations conspire to deny paradox. But paradox is all around us, regardless of the geography, level, or size of a business. Our natural tendency is to treat all paradoxes as if they are puzzles: “I’m on top of it. I can solve it.” This makes us feel in control. In addition, we know that managers are promoted for the problems they solve, not the paradoxes they manage. Therefore, we need to consistently resolve issues and bring them to closure. MWORLD FALL 2014

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Paradoxes just don’t work that way. They are inherently messy and repel clear definitions. There are probably many right answers and several wrong ones, and each one is right or wrong based on one lens, or perspective. The first thing leaders need to do is to acknowledge that they are faced with a paradox so that it can be debated and managed in an open, collaborative way.

GET CLEAR ON THE PURPOSE OF YOUR ORGANIZATION One of the most effective ways to manage through a paradox is to frame it by getting crystal clear on your organization’s purpose. By purpose, I mean the following: Why does your organization exist? Who does it serve and why? What does your organization contribute to the world? What does it stand for? What is the “North Star” for the business that can serve as a bright light to navigate through murky decision making? Once these questions are answered, purpose can frame, or put boundaries around, the paradox that will designate some aspects of the problem to take center stage and move others to the background. Purpose makes it easier to see the way forward. For example, Larry Merlo, CEO of CVS Caremark, recently announced that his company is no longer going to sell tobacco-based products—and will take a $2 billion hit to the bottom line— because doing so is starkly at odds with CVS’s core purpose of becoming a healthcare organization. The decision about this paradox was hotly debated internally, prompting discussions about whether CVS was a retailer or a healthcare company. Ultimately, CVS’s purpose of promoting health helped the executives come to a new way of managing their paradox, despite being in direct conflict with the short-term interests of company shareholders. Interestingly, CVS’s stock price went up after the announcement, and the sheer amount of positive press resulted in a significant uptick in brand perception.

ENCOURAGE A DIALOGUE TO FIND ALIGNMENT Once paradox is recognized for what it is and a purpose is clearly defined, then leaders have an obligation to create space for an open discussion in which all points of view are valued and thoughtfully considered. Solicit ideas, challenge assumptions, develop empathy for people with alternative points of view, and remind everyone of what your common higher purpose is. As a leader, do these things yourself and encourage them in others around you. Alex Gorsky, CEO of Johnson & Johnson, understands how to do this. He encourages a dialogue around paradox and uses the company’s special statement, the J&J Credo, as the vehicle to foster debate and engagement. The J&J Credo begins with, “We believe our first responsibility is to the doctors, nurses, and patients, to mothers and fathers and all others who use our products and services…” It goes on to state that the company will serve not only customers but also employees, communities, and shareholders. As you may have noticed, the Credo itself is an inherent paradox. Are all these stakeholders equal, and in which situations should the interests of some trump those of others? Gorsky encourages debate around complicated issues such as access to medicine in developing countries and sponsors senior-executive learning programs designed around Credo issues to spark debate. He and his team give everyone in the company permission and space to discuss how their responsibility to meet the paradox inherent in the Credo evolves and changes, and they ask teams to examine how they are fulfilling the Credo and how they might be falling short. The ongoing debate can sometimes be contentious, but ultimately it leads to alignment between the J&J Credo and decision making at every level of the company.

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EVALUATE PERFORMANCE OVER TIME Most organizations today reward results that can be quantitatively measured on a quarterly or yearly basis. It’s easy to say, “This person increased revenue by 8% or successfully finished a project that yielded positive business results and deserves a promotion or raise.” As you might guess, this approach is a puzzle-based reward system. It’s a snapshot in time. Unfortunately, human performance usually is not that cut-and-dried. How do you recognize more subtle but potentially more important contributions, such as “This person catalyzed a critical conversation that helped the team get clearer on our purpose or went out of her way to make sure that a customer issue was resolved?” It’s important to acknowledge the entire context of an employee’s performance. Smart leaders take the initiative to evaluate performance over time and to understand motivations and abilities that are not easily quantified. By acknowledging context, it’s easier to see how someone has managed through paradox and built the company’s overall capability.

GIVE TRUST TO OTHERS WHILE EARNING IT FOR YOURSELF Learning to fully trust others who may directly impact your own fate and performance is by far the hardest thing for a leader to do. And as you go higher up in a company, another paradox you encounter is that while you must extend trust, you also have to continually earn it. I recently attended a customer service training session at a Fortune 500 company that celebrated its customers, who were described as “the heart of the business.” Every company and executive that I work with will say much the same thing, and they’re right. However, when the training got under way, it was clear that customer service agents had a very narrow window in which to make decisions. Why? Because the company didn’t trust them to make the right calls for the business. Leaders at learning organizations encourage the front line to internalize the company’s purpose and use it as a way to manage trade-offs. Executives and managers give them greater freedom to do what’s good for the company and right for the customer and then stand behind them when they demonstrate good judgment over a longer period of time. This process will not only increase customer satisfaction, create positive buzz, and engender brand loyalty, but also pay off in a way you may not expect. It will allow you to be more in tune with subtle changes in the market, because those shifts are only felt on the front line, not at the top. It takes courage for leaders to let everyone in the organization manage paradox. It’s a leap of faith. But, ultimately, leaders who respect, trust, and honor their teams, customers, and communities are the ones who will win. MW David Dotlich, PhD, is chairman and CEO of Pivot Leadership (www.pivotleadership.com and @pivotleadership), a strategic leadership boutique that develops corporate strategy and executive development programs for Fortune 500 companies such as Walmart, Johnson & Johnson, GSK, Nike, Microsoft, KKR, Aetna, Best Buy, Deutsche Post DHL, AbbVie, Ericsson, and many others. A successful entrepreneur who has founded and run two large independent companies, Dotlich advises CEOs and boards on issues of talent, leadership, and strategy.

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The X Factor

In Successful Acquisitions: Getting the Human Side Right

BY STEPHEN W. SHIPPEE

The pace of acquisitions is accelerating. After a relatively tepid year for mergers and acquisitions in 2013, market analysts have predicted an upswing in merger activity for 2014. An increasing number of companies see new opportunities to once again grow—particularly in industries such as technology, media, and healthcare. In many cases, a merger’s purpose is to help transform a business by adding products, services, or hard-to-find talent. In others, it’s to expand operations in faster-growing geographies that might take years to develop from scratch or to gain an infusion of new customers and revenues. Regardless of why your company pursues M&A, what industry you are in, or whether you are the acquirer or the acquired, be forewarned: Compendiums of research studies over the years have confirmed that as many as two out of three mergers fail. Based on my own experience with M&A and the observation of troubled mergers such as Daimler-Chrysler, AOL-Time Warner, and Sprint-Nextel, the reason why most mergers fail is that a highly important component of M&A activity has been overlooked: the “human element.” I define the human element as the X factor in successful mergers. It involves both a philosophy and a structured approach to looking at an acquisition opportunity. It includes, but does not solely focus on, financial numbers. It goes beyond finance to foster an understanding of the acquired company’s business culture from the employee and overall brand perspective. Viewing an acquisition opportunity through this lens allows for a company to succeed beyond the purchase. Using my organization as an example, over the past decade we have made eight strategic acquisitions that have added to our services portfolio and global capabilities. The reasons for these acquisitions have included additions to or enhancements of our services, new products, platform innovations, business-process outsourcing capabilities, and global customer reach. Each of these acquisitions continues to contribute to the company’s success, and the history of each acquisition began with the building of a smart partnership. 14

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CREATING A STRONG M&A PARTNERSHIP What does a smart partnership mean in M&A? Most M&A activity in the marketplace today is facilitated under the cloak of secrecy by investment bankers who find a company, crunch numbers, and find synergies based on the “quant” perspective. This means looking at how much a company can reduce costs while laying out cookie-cutter mathematical-based theories and business propositions. This is the reason why most M&As fail. Make no mistake: The economics of a deal need to make sense, but financial theories alone are not enough. It’s important to employ a structured process that starts with a look at the prospective merger candidate’s financials. At our firm, that means homing in on a well-run company—rather than one that is broken and in need of major fixing—with a management team that is looking not only to put coin in its own pocket but to reinvest in the company and make it better. Our process seeks answers to questions such as the following: ៑ ៑ ៑ ៑ ៑

Is the acquisition prospect growing? Is the business profitable? Does it have high customer- and employee-retention rates? Is employee morale strong? Does the management team share the same vision, values, and dedication to corporate culture that we do? If your answer to all the above questions isn’t yes, consider walking away from the transaction. You increase your chances of success if your M&A prospect is financially sound as well as operationally and culturally compatible.

As a former boss of mine used to say to me, “It’s all about dinners. Make sure you like going to dinner with the CEO of the company you want to acquire and his executive team. There are going to be a lot of dinners and a lot of time spent with these folks, and if you don’t enjoy their company, you likely won’t enjoy working with their company.” I’ve taken this advice with me through my career and have found it to be a very significant indicator for successful business partnerships. Another important piece of advice to take into all business decisions is the fact that you—and the customers you serve—should be acquiring access to good people who have a passion for their jobs and are dedicated to superior customer service and satisfaction. Technology can be fixed with money, but strong customer contacts and dedicated employee relations are organic. They need to be solid to make a unified partnership work.

BEST PRACTICES FOR EXECUTING AN ACQUISITION The process of mastering the human element begins well before any negotiations start. Following are some best practices to ensure that your organization is targeting and partnering with like-minded companies that will provide exceptional services to customers. MWORLD FALL 2014

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Connecting. Every one of our eight acquisitions started with a private inquiry made by our CEO or myself, where we got to know the company personally. This process can take months (in one case, even years), and the company may not necessarily have been looking to be acquired. Our recent acquisition of Titan Technology Partners is a perfect example. What started over a two-hour-plus lunch turned into a tremendous business opportunity nine months later to expand our solutions and global capabilities in the managed enterprise software services market. ៑ Courtship. Walk into the negotiation not as a conquering hero but with a common vision. A courtship allows the development of trust between the respective executive teams, encourages exclusivity in negotiation rather than a bidding war, and leads to a fair price. ៑ Culture. In the case of our company, we have a strong customer intimacy mentality, and we continue moving more toward innovation. Customer intimacy never changes; therefore, it’s important to find like-minded companies that have the same values and ethics in the way they manage their business and maintain their customer and employee relations and satisfaction. ៑ Communication. It’s our practice to be transparent and communicate with all employees about the partnership and meet with the new team in person the minute a transaction is completed. This communication helps keep concerns and uncertainty at bay. Make sure you have a plan in place for communicating with the management, employees, and customers of both companies about the merger and what it means for them. ៑ Integration. Embrace the acquired company’s employees and reassure them. We tell them, “Your job is the same. Your salary is the same. Your boss is the same.” We then form them into small collaborative teams to evaluate systems and work streams so that we can converge on one single instance for each system. We leverage the employees’ talents to strengthen each individual’s role and performance, and the resulting new corporate organization chart emerges. ៑ Respect. Honor each individual’s tenure at the acquired company, even when it has a longer lifespan than your own company, as was the case with our most recent acquisition. Ensure that their respective benefits and perks will be equal to or better than what they had previously. These actions lock in the reality of the partnership and show employees you’re true to your word that this is a unified partnership, one that will create a better collective company of skilled professionals. In summary, companies that look beyond the dollar and get the X factor right by humanizing their acquisition strategy will be most successful in M&A. These companies will ensure that they build a stable and solid internal team and that customers (and investors) will benefit from the business decision to make smarter acquisitions. MW ៑

Stephen W. Shippee is executive vice president and chief strategy officer at Velocity Technology Solutions, which specializes in cloud applications hosting for enterprise and business software. In his role as chief strategy officer, Shippee orchestrates Velocity’s strategic growth initiatives with a focus on mergers and acquisitions. He has presided over eight acquisitions since the company was founded a decade ago. Avoid the most common pitfalls in acquisitions—take AMA’s Course on Mergers and Acquisitions (www.amanet.org/1521).

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The Innovator’s Manual: Eight Tools For Fostering Innovation BY DON MROZ, PhD

Thanks to today’s rapidly changing marketplace, business leaders can no longer afford to rest on previous successes. Gone are the days of 10-year plans and strategies, finishing one product before starting another one, and guesswork. Today, strategies need to be evaluated yearly, and sometimes even quarterly. Organizations need to be working on multiple products or services at one time, even as they focus their marketing efforts on just one product or service to build and promote the overall brand. And when it comes to growing the business, innovation is absolutely essential. We all hear about the need for innovation. But for innovation to become a functional approach to company growth, it must be more than just a buzzword. It needs to be fostered and nurtured from the top of the organization down. To truly support a culture of innovation, leaders should focus on eight critical skills: 1. Listening. When it comes to innovation, it’s your job as the leader to face resistance head-on.

If you’re making changes to your organizational culture and are seeing resistance from one or more members of your team, there is a good chance that there’s more where that came from. It is far too easy to discount this resistance simply because it takes time and energy to deal with it. It’s important to listen to what these people are saying and take their feedback into careful consideration. Really listen and comprehend, so that you can work with them on addressing what generally are some very legitimate concerns. By bringing their concerns to the forefront, you not only develop a stronger support network but also find better solutions. MWORLD FALL 2014

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2. Risk taking. Everyone knows that trying new things and innovation go hand in hand. However, a fear of failure still holds some organizations back from making positive change. To them I say, “Innovation cannot happen without trying different approaches to the same problem and, at times, failing and learning from those failures.”

Innovation is certainly not only about solving problems. It’s also about developing new concepts, products, processes, and so forth. But with any of these results, risk-taking is the name of the game. My advice is to use your judgment, and have faith that when given the permission to do so, your employees will bring back new and successful solutions to old problems. Just be certain to set the risk parameters in a timely fashion. 3. Teaching and learning. One of the first things to understand about creating a culture of

innovation is that to keep it alive, you must always promote a culture of unconditional, lifelong learning for your employees and yourself. The “unconditional” part of this principle pertains to learning from every interaction, even the difficult ones. When an entire organization is learning together, innovation and creation are inevitable. At Post University, where I head up the Online MBA Program, we truly believe that the teachers and students must be learners, not just knowers. One good tip is to hold weekly brainstorming sessions, where anything can be brought to the table for discussion and any question can be asked. In large settings, employees may sometimes be afraid of asking a “stupid question.” But as the old cliché tells us, there is no such thing. One person’s “stupid question” might just spark the next person’s great idea. 4. Collaboration. At this point in my career, I’ve had a lot of experience working within and leading large organizations. One characteristic of a larger organization is that several different departments work, for the most part, independently from one another. When this happens, you run the risk of creating isolation, in which individuals begin to develop a feeling of ownership over one project or account with little or no concern about what’s happening elsewhere in the organization. Collaborating and sharing ideas are absolutely necessary for innovation to take hold.

To address this issue, make an effort to identify the people who see the advantage of collaborating and bring those champions together to build cross-functional teams. When people share techniques, business principles, and ideas, everyone’s skill set and the organization overall are strengthened. 5. Sense of humor. We all know that every successful organization needs to be driven by

passion. But workplaces that are driven by passion often are hotbeds of intensity and pressure. During high-stress times, it is the challenge of a leader to bring some humor into the mix. If you do this, you will be showing your employees that it’s OK for them to laugh. Nothing bridges the gap between two people better or faster than laughter. Not only does humor build a positive, encouraging atmosphere that people will look forward to working in, but it also brings out valuable traits, such as warmth and compassion, in yourself and your employees. These characteristics go a long way toward building an innovative culture. In fact, they’re so important that I suggest bringing a bit of humor into the interviewing process to identify those candidates who will bring some humor to the mix. 6. Reflection. You cannot continue to make progress with innovation if you don’t take the time

to evaluate what has worked and what hasn’t. Often, successful organizations work in fast-paced environments where carving out the time it takes to seriously reflect can be difficult. But once it’s 18

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done, it provides the space to think through the project being worked on or the innovation being created. Reflection allows “think time,” and creativity and innovation can’t happen without it. I recommend penciling in reflection time while you’re mapping out the time commitment for each project. The benefits of this are twofold: You’ll ensure that reflection actually takes place, and you’ll also make sure it doesn’t take away from any future projects because the time has been planned and accounted for up-front. Finally, it’s never a bad idea to bring the colleagues that you worked with on each project into the reflection process. That way, the project is truly examined from all angles. 7. Trustworthiness. Many of the tips discussed above are reliant on employees’ willingness to be

open and share new ideas and honest feedback. This is not likely to happen unless your organizational culture is a safe one. By “safe,” I mean that all employees feel they can participate in meetings and collaborate on projects without being denied or shot down. For managers, it’s important to realize that trust starts with you. If you find yourself in a situation in which an employee says something off topic, the way you respond is key. Remember, as the leader—all eyes are on you. You want to gently guide him back to the right path, while at the same time making sure you or no one else criticizes him so that he won’t be afraid to join the conversation in the future. One of my mantras is, “It’s always in the how.” Often, you can be critical of someone with your voice or your body language. Keep these elements in mind to be sure you’re remaining positive. 8. Flexibility. There is no wrong way to innovate, so it’s important to keep a flexible and open mind when trying to incorporate innovation into your organization. I’ve found that this concept is best captured in the term “equifinality,” which I learned when I was teaching systems thinking. Equifinality has two meanings: to follow a variety of paths but end up reaching the same result, and to start in the same place and end up in a different place.

This way of thinking can be difficult for some employees to follow because people tend to think that their way is the “right” way. In fact, there are probably some instances in which, despite how much you value innovation, you have a hard time parting with your old way of doing things. But just remember that when you are able to let go of that stagnant mindset, you will become open to the ideas that will lead to greater innovation and, therefore, success. You may be considering marketing a specific product or service that is in demand as a way to promote your overall brand. This method may be innovative for your organization, and as such you may encounter some resistance. No leader can do it alone. Surrounding yourself with creative people who aren’t afraid to change creates an environment in which innovation will thrive. One of my most tried-and-true tools is what I call a leader’s “sixth sense”—the ability to feel and anticipate when the time is right for change. Leaders should have an innate sense of when their product or service is becoming outdated, so that they are able to quickly change direction. The strategies you structure must remain flexible, and using these eight tools can ensure that you are constantly evolving and keeping that pace. MW Don Mroz, PhD, runs Post University’s Online MBA Program and works as a partner in Waves of Change Consulting. He has extensive experience helping businesses large and small manage change and find new ways to grow and prosper. Mroz has worked with organizations from mom-and-pop shops to Fortune 100 companies across many sectors, including the nonprofit arena. Mroz can be reached at dmroz@post.edu Solve problems efficiently and creatively with AMA’s seminar Critical Thinking (www.amanet.org/2533).

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From

Effective Action to Strategic Vision: Transitioning To the C-Suite BY GAIL ANGELO

The requirements for getting to the C-suite have changed along with the times. The rate and complexity of change in todayâ€™s marketplace dictate a broader understanding of business issues and an ability to be nimble in a rapidly changing economic environment. Technical or functional expertise alone will not get you to the C-suite these days. So what does it take? In my coaching experiences with executives, whether Fortune 100 or Fortune 1000, I have seen the following trends evolve for success in the C-suite: clarity of purpose, an understanding of the broader business, inspirational leadership, and an ability to anticipate and adapt quickly to change. 20

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CLARITY OF PURPOSE In business today, there is an increasing emphasis on defining and communicating your personal brand. When we think about brand, the process often starts with a question about what we want to be known for. What do you want people saying about you when you are not in the room? A successful personal brand communicates a clear, consistent message about who you are and what you have to offer. In working with hundreds of executives over many years, I have found that brand is an extension of purpose. Therefore, the ability to clarify our purpose and live into it courageously influences our individual, team, and organizational effectiveness and impact. Clarifying purpose begins with the fundamental question of “why.” Why do you do what you do? Those who are the most effective in getting to and experiencing success in the C-suite are clear about their purpose. Most important, it is a purpose anchored in service beyond themselves. How do you want to be of service as a leader? What contributions do you want to make? Individuals connected to purpose experience high levels of engagement, contribution, and fulfillment, yet questions about purpose are some of the most challenging for people to answer. The temptation is to answer such questions with a statement about what you do versus why you do it. Purpose emanates from your core and describes who you are versus the role you play. It is your call to action. For example, my role is that of an executive coach and leadership development strategist. I do what I do because supporting people in awakening to and achieving their greatest potential is the work that is most meaningful for me and that allows me to make the greatest contribution. Discover your purpose by reflecting on the following: ៑

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The patterns in your life that provide insights about your passions, strengths, and values. Consider how these patterns and experiences have influenced and are demonstrated in your leadership and life today, and which of your passions and values are dormant or underutilized. How your passions and values align with the purpose of the organization you wish to lead Feedback you have sought to determine how you are showing up to others

As a result of this reflection, it becomes increasingly clear how your participation at the C-suite level can best support the organization’s purpose as well as your purpose and significance as a leader.

FROM SILOED TO STRATEGIC THINKING: STRENGTHENING BUSINESS SAVVY Strategic thinking is defined as the capacity for thinking conceptually, imaginatively, systematically, and opportunistically about the attainment of success in the future. To make the transition into the C-suite, leaders must have a broader, more holistic view of the business. Leaders in the C-suite have developed an ability to understand the dynamics, challenges, and implications of decisions across functions. They have developed a proficiency in business fundamentals and strategy. They break down silos and seek opportunities to collaborate strategically and creatively to address challenges that affect the organization as a whole. In short, they have moved from tactical execution to strategic thinking and decision making. Because of the increasing complexity of business environments, the CEO of today must rely on his or her C-suite team for thoughtful counsel. There is an expectation that those in the C-suite are capable of releasing narrow agendas in support of the broader good to achieve market differentiation and competitive advantage. MWORLD FALL 2014

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To be a viable candidate for the C-suite, you must strengthen your understanding and application of expertise to the entire business. Begin now to: ៑ ៑

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Step outside your comfort zone. Learn to be comfortable in your discomfort. Seek experiences such as a task force or other initiative of strategic importance that provide you with a broader understanding of the business and its challenges and opportunities Boldly identify ways to promote new growth, new markets, new go-to-market strategies, and new efficiencies Ask others, particularly people outside your function, how they think about those challenges and opportunities Notice how decisions get made Better leverage the diverse talent across functions for a more holistic approach to the market Pay attention to the questions you ask yourself and others. Do these questions promote more innovative and strategic thinking? Do they promote deeper understanding? Ask yourself how you are defining success. What would cause success in a particular situation? Think about other considerations that might be explored. Get in the habit of considering what is possible versus why it can’t be done.

INSPIRATIONAL LEADERSHIP: LEADING OTHER LEADERS To obtain a seat at the C-suite table, you must be able to lead other leaders. This ability is paramount. Leadership is a relationship business, and relationships are built on trust. Trust is built on communication and action with integrity. Leaders of leaders inspire the best performance from individual people and teams as well as organizational outcomes. Being a leader of leaders requires flexibility, trust, influence, communication, and confidence. Leading other leaders is as much an art as a skill. As individuals grow in an organization and in leadership ability, they often lead people as smart as or smarter than themselves. For these leaders, keen observation and listening skills provide the perspective needed to learn how to bring out the best in co-leaders. They gain insight about the strengths of those they are leading and influencing. They understand the approaches and environments that promote the highest levels of engagement. Leaders of leaders adapt their own styles accordingly. They have developed an exquisite ability to put themselves in the other person’s shoes and meet others where they are. They communicate in a way that allows others to receive the message best, thereby promoting understanding and connection to the broader vision. With confidence, they encourage their co-leaders to take the reins, play big, talk straight, and act boldly. Leaders in the C-suite know that their success depends on the success of others and therefore are committed to their coleaders’ success. To lead other leaders, take these actions: ៑ Provide vision and communicate their connection to the broader strategic context ៑ Provide leaders with the opportunity to contribute to strategy ៑ Ask questions and seek input and perspectives from other leaders within the team and across broader groups ៑ Listen to understand versus waiting to respond

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៑ ៑ ៑ ៑ ៑ ៑

Seek alternative points of view Seek ways to remove silos and promote collaboration Encourage change to emerge, and empower other leaders to make the change Encourage a culture of constructive disagreement and the sharing of diverse points of view Support the success of others, particularly at the peer level Communicate, communicate, communicate in ways that others receive the message best

ANTICIPATING AND RESPONDING QUICKLY TO CHANGE Effective leaders in the C-suite demonstrate situational, mental, and emotional agility. Agility is required because change will continue to occur at lightning speed, with increasingly intricate considerations. Adapting to change often is a reactive experience. Agility is the willingness and ability to anticipate and explore the best approach to growing changes in a variety of environments. Agile leaders proactively reflect, take action to reduce risk, and make the most of opportunities in what will inevitably become the new normal—for now. Agile leaders are exceptional at adapting to new situations, new information, and differing interpersonal styles. They are flexible in their thinking and in tapping diverse groups of talent for more impactful results. They have learned to apply insights from past learnings to current and future scenarios. Marshall Goldsmith, renowned leadership expert, has said, “One of the most important qualities for the leader of the future is agility. Given our rapidly changing economy and world, leaders have to be quick, agile learners. They need to learn from all of their key stakeholders and be able to change course based upon what they are learning. In short, how we lead yesterday may not be sufficient today.” These steps will strengthen your agility: ៑ Take risks in speaking up about changes you see on the horizon ៑ Promote innovation and creativity in problem solving or opportunity generation ៑ Influence a culture of broader exploration and risk, and empower others to do the same ៑ Maintain an insatiable level of curiosity In conclusion, different times call for different measures. Getting to the C-suite is a different path for today’s leaders. Expertise is not enough. Successful C-suite leaders are purposeful, broad-based thinkers with clear points of view, yet they are open to alternative ones. They are skillful in bringing the power of the entire organization to challenges and opportunities. They are nimble and unafraid in their approach to change. Most important, those in the C-suite inspire action and invite the best from their fellow leaders. MW Gail Angelo is a leader of leaders. Using an intuitive yet practical approach that enables those she works with to move from wishing and hoping to doing and attaining, Angelo empowers her clients to act as the owners of their leadership goals. She helps executives identify their true strengths, eliminate negativity, and create strategies with clear action steps that lead to success and fulfillment for her clients. For more information or to contact Angelo, visit www.gailangelo.com

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SOUNDINGS

Data Holds the Key to Successful Management BY LEEROM SEGAL, JAY GOLDMAN, AND RAHAF HARFOUSH

To recognize that the potential for revolutionizing management lies in data, look back to Napoleon Bonaparte. Although the noted French general and emperor preceded the digital age by almost two centuries, he fundamentally knew that having the right data was key to success, having reportedly said, “War is 90% information.” In today’s modernday business world, managers can leverage a vast amount of data to equip their organization and collect a constant stream of data about people, projects, work, and the business environment. We call this “decoding.” As a concept, decoding employees is relatively new to management, although the idea has deep roots in the customer-relationship space. Companies such as Amazon and Netflix have been decoding their customers to personalize their user experience for years. With employees, the benefits are equally advantageous: increased employee engagement and productivity. Personalizing the employee experience is completely contrary to the one-size-fits-all management policies and processes that have been used by most companies since the dawn of the industrial revolution, long before today’s sophisticated technology platforms were conceived. The benefits of decoding a company are substantial, but they can only be realized when the leaders commit to preserving the privacy of employees through the use of ethical data practices. In researching The Decoded Company, we consistently found that decoded companies are open and clear about the data they collect. They use data that is available internally as part of the “corporate public record.” 24

Additionally, they require transparency: an explicit opt-in from their employees to use any data that isn’t public, such as health and medical data. What kind of data do decoded companies collect? They gather as much data as possible from the corporate public record—supplies ordered, how much coffee is being consumed in the office kitchens, etc. It’s often surprising to learn how valuable seemingly disconnected data points can become. What’s more, these days data storage is cheap to the point that it’s almost free. Qualitative measurements are useful to understand the “why” behind observations but suffer at scale. Quantitative measurements are much more useful for equipping people with “data as a sixth sense” because they scale easily and can be efficiently analyzed in real time by sophisticated, predictive algorithms. We recommend the collection of self-reported data, which includes expense reports and time sheets, and ambient data, which may include patterns of communication between employees and customers, time spent in the office, the use of your intranet, and more. For example, our employees drank 61,392 cups of coffee in our company last year, as measured ambiently by our network of coffee machines. The more that companies understand the dynamics of the most granular data points in their enterprises, the more reliably they can predict outcomes and reduce surprises. By tracking everything from basic patterns of behavior to individual experience, companies are able to decode long-term patterns that separate signal from noise. This process allows them American Management Association

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SOUNDINGS

to create predictive models that automatically flag potentially hazardous situations that will affect their customers and overall business. This data foundation helps companies empower their people with superpowers that were unimaginable a generation ago. We’ve distilled this foundation into three key “Decoded Principles”: ᔢ Technology as a coach and trainer. Enterprise technology traditionally is a referee, slavishly and impartially reinforcing business rules. Smart technology can be transformed into coaches that use data to personalize the experience for each member of a team and flag issues before they become problems. Technology also can be used to identify and implement “teachable moments”—timely opportunities to coach and train people at the precise moment the training is needed. This timeliness makes the training more meaningful and memorable and leads to significantly higher performance. Using technology as a coach can take an employee onboarding program to a higher, more effective level. Systems that can detect when a new hire starts can link to training videos and modules at the most appropriate times for each employee and allow for better communication with his or her manager. ᔢ Data as a sixth sense. By pairing analytics with human instincts to gain a perspective that’s grounded in data but tempered by experience, companies can give employees access to an unprecedented amount of information to use in assessing a situation and making better decisions faster. As a decision-making superpower, data as a sixth sense leverages one’s existing experience to inform context around a decision and eliminates personal biases and emotions. It’s interesting to examine the dynamics involved in the decision-making process. In the lead-up, the sixth sense functions like an organizational proprioceptor, providing people with an innate awareness of everything that’s happening within the company and eliminating blind spots without the need to explicitly seek out information. At the actual decision-making point, informed intuition kicks in. Data as a sixth sense helps employees recognize when their gut instincts don’t agree with the perceived facts. This principle provides them with the knowledge of how to use the data at their fingertips to make faster, smarter decisions. MWORLD FALL 2014

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ᔢ Engineered ecosystems. We have seen firsthand the advantages of intentionally engineering work environments that become centers of gravity for the best talent, a people-first approach that puts talent above customers and customers above profits. Companies with engineered ecosystems are establishing a culture of experimentation that uses quantitative feedback to measure the behaviors, attitudes, and beliefs that exist inside the organization and the real impact of changes made. The most successful companies of the future will be those that can manage and mine these bits and bytes of data and use them internally to empower their talent. The reality is, data can no longer be regarded simply as a technological issue: It is a strategic advantage. Companies need to rethink the way they manage their businesses by using data as cleverly internally as they do externally. We believe we are at the cusp of a new frontier. Employees are swimming in an ocean of data. All the data required to personalize their experience already exists within most organizations, as is the technology required to handle it. The ability to use data has become a management issue that must be prioritized and studied at the highest level of an organization. It’s already started to help a wide range of data-driven, people-centric companies to drive their corporate culture and performance. Companies that understand, and treat, their employees as well as they do their customers won’t only win the war on global talent. They’ll also enjoy higher growth, customer satisfaction, and profits than their competitors. It’s a game changer, and it will differentiate industry leaders from laggards over the next century. MW Leerom Segal is a co-founder and CEO of Klick Health, the world’s largest independent digital health agency. Jay Goldman is a managing director for Klick and has been published in the Harvard Business Review. Rahaf Harfoush is a technology author and lecturer. They are co-authors of the New York Times bestseller The Decoded Company: Know Your Talent Better Than You Know Your Customers (Portfolio/Penguin, 2014). Learn to make better decisions at the AMA seminar Tools and Techniques for Mastering Data (www.amanet.org/1112).

Four Tools of

Ethical Influence BY MARK PASTIN

To succeed in any business, you have to influence others to support your viewpoint and decisions. Top business leaders are masters of influence. Those who succeed in leading their organizations on a long-term basis infuse influence with ethics. When influence is infused with ethics, the decisions made are respected and more easily implemented than they are when force or manipulation is used. And the person making the decision avoids the rebound that occurs when others realize they have been manipulated. Managers can use four tools of ethical influence. These tools will help you get others to agree with you without assessing the penalties associated with less effective, more manipulative approaches. They will make you a source of influence not only in the short run but also over time.

DETERMINE THE GROUND RULES People love to talk about ethics without saying just what they are talking about. When I want to know about someone’s ethics, I am far more interested in what he will do, especially under pressure, than in what he says. My shorthand for this is to say a person’s ethics consist of his or her ground rules. Ground rules are the basic principles on which each person will act. To understand people’s ground rules, watch what they do, particularly in difficult situations. Do they still tell the truth when they are put under pressure to lie? Do they keep promises even when it proves more difficult than expected? This concrete information about their ethics is far more valuable than their abstract opinions. When you disagree with someone on an issue, there is still a good chance that you have ground rules in common. Move the discussion to these shared ground rules to see if that brings about agreement. If this tactic doesn’t work, make your point in terms of the other party’s ground rules. When you do this, you show respect for him and move the discussion off the points of contention. When you know the ground rules—yours and those of others—you are in a much better position to exercise influence.

FIND HIDDEN INTERESTS When seeking to influence a decision about a situation, always ask what interests are at stake. Those you are trying to influence are more likely to be receptive if they see your

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position as being in their interests. Many interests are hidden because people learn that declaring their interests often results in them being thwarted. You can find hidden interests by reasoning backward, from outcomes to interests. Determine what outcomes the other side wants, and ask what interests each outcome serves. Once you find the hidden interests, you are in a better position to influence with ethics because you know what others want.

GET UP CLOSE AND PERSONAL Ethical influence works best up close and personal. Our ethical instincts were honed when we needed trust and cooperation to survive in small hunter-gatherer groups. Emotions of sympathy and empathy helped these groups stick together. Although our world has changed dramatically, our wiring is still the same. The modern evidence of this is that it is far easier to hurt someone who’s far away from us than someone in the same room. Many who could drop a bomb on an entire city could not kill a civilian face to face. By the same token, it is harder to ignore the needs of someone close to you than those of someone who lives thousands of miles away. This is because the core of our ethical sense—our abilities to feel sympathy and empathy—relies on cues in our immediate environment. This principle means that if you are trying to influence with ethics, it helps to do so personally. The other party will be more attuned to your needs and you will be more attuned to his or hers. Many situations that seem hopeless when handled remotely can be resolved up close and personal. When you can’t influence someone through the printed word and email, rely on the emotional wiring that encourages us to agree with those in our immediate environment.

GET SPECIFIC When we are trying to influence with ethics, we often start by trying to get others to accept our general viewpoint. This attempt often fails, since you may be asking someone to give up beliefs to which he or she has clung for years. But it’s often possible to achieve agreement with someone in a specific case even if you would never agree at the level of basic principles. In Washington, we often see politicians acting contrary to their stated principles when it comes to their own families. A politician who would never support gay rights tends to act differently when one of his or her children is gay. An advocate of public education may send his own children to private schools. When you seek to influence with ethics, find the level of agreement you need to move forward. Start with the specific and only move to a more general level if you can’t reach agreement at the level of specifics. If you don’t need to change someone’s principles to move ahead, stick to the specifics. When you influence with ethics, you decrease the distance between yourself and those you seek to influence. This progress gives you a basis for continued influence, with no price to pay for being manipulative. Influencing with ethics lays the foundation for continued success as a source of influence. MW Mark Pastin (www.markpastin.com) is an award-winning ethics thought leader, ethics consultant, and keynote speaker. He is CEO of the Council of Ethical Organizations, a nonprofit dedicated to promoting ethics in business and government. A Harvard-educated ethicist, Pastin has published more than 100 articles and written a new book, Make an Ethical Difference: Tools for Better Action (Berrett-Koehler, 2013).

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Executing the Strategic Plan: Five Actions Midlevel Leaders Can Take BY DANIEL JENSEN, PhD

Strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, as defined by John M. Bryson in Strategic Planning for Public and Nonprofit Organizations (John Wiley & Sons, 2011). In short, a strategic plan should be the driving force for actions at all levels of an organization. The strategic-planning effort consists of much more than conducting an annual offsite meeting to determine an organizational philosophy (such as vision, mission, values, core competencies, and priorities). If the strategic plan is properly executed, it will help create a way of thinking, acting, and learning that is necessary to achieve organizational success. Without strategic planning, an organization may continuously react to near-term issues, but employees will not understand why their work is important. Strategic planning links and synchronizes actions at all levels of the organization, resulting in leaders and followers who understand where they are heading and why their day-to-day actions matter. Because resources usually are limited, strategic planning must occur to ensure that resources are not expended unnecessarily due to a lack of strategic and operational focus. Sometimes, however, even if a strategic plan exists, the actions and organizational focus at all levels are never synchronized. Unfortunately, in some organizations, an offsite strategic planning meeting is viewed as an intrusion on day-to-day priorities and tasks—a “check the box” activity that does not translate into actionable objectives and tasks. The strategic plan is often dismissed as esoteric and the responsibility only of senior leaders, not of people in mid- and lower-level leadership positions. Consequently, the strategic plan is never put into action. 28

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Although senior leaders may be responsible for developing the strategic plan, it is the responsibility of midlevel leaders to translate this strategy into operational-level plans and actions that will result in execution throughout the organization. Without midlevel leadership buy-in and emphasis, the strategic plan cannot be put into action throughout the organization. Following are five fundamental actions that midlevel leaders can take to execute the strategic plan:

SUPPORTING GOALS AND OBJECTIVES: FIXING RESPONSIBILITY The organizational philosophy is the foundation of the strategic plan, but strategic goals with supporting objectives must be developed. Goals describe a future condition that the organization needs to attain to achieve its vision. Objectives are statements of what must be done to achieve a goal. Effective objectives are specific, measurable, achievable, realistic, and timely (SMART). As goals and supporting objectives are developed, identifying which individual or organization is primarily responsible for their achievement is important, as is identifying the other individuals or organizations needed to help accomplish the objectives. To develop action plans, determine who has the primary responsibility and who has the secondary responsibility in achieving the goals and objectives.

DETAILED ACTION PLANNING: WHERE THE RUBBER MEETS THE ROAD Each objective should have an action plan. An action plan describes the specific tasks that are necessary to achieve the supported objective. This level of planning is where the rubber meets the road. Ultimately, it determines whether the objectives, goals, and organizational vision are achieved. Actions plans detail the milestones, activities, time frames, resources, and team members required to achieve an objective. Leaders should develop action plans in a manner that best meets the needs of those involved in executing the plans. Anything from butcher paper and markers to software programs can be used in the development process.

MEASUREMENTS: UNDERSTANDING PROGRESS Measuring specific tasks is necessary to understand progress against expected results. Measures are a standard used to evaluate and communicate performance. They should be developed to give leaders a current view of the progress made in achieving the organization’s goals, objectives, and action plans. Mark Graham Brown, in Keeping Score: Using the Right Metrics to Drive World-Class Performance (Productivity Press, 2006), offers the following suggestions on how to approach organizational measurement: ៑ ៑ ៑

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Measurement should focus on the vital few key variables rather than the trivial many Measures should be linked to the factors needed for success—the key business drivers Measures should be a mix of past, present, and future to ensure that the organization is concerned with all three perspectives Measures should be based around the needs of customers, shareholders, and other key stakeholders Measures should start at the top and flow down to all levels of employees in the organization Multiple indices can be combined into a single index to give a better overall assessment of performance

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Measures need to have targets or goals established that are based on research rather than arbitrary numbers Measures should be changed or at least adjusted as the environment and your strategy changes

ENVIRONMENTAL SCANNING: ASSESSING OPPORTUNITIES AND THREATS A strategic plan is a living document. Changes and updates to the plan are driven by the strategic environment, those factors outside the organization that are potential opportunities or threats. The strategic environment must be scanned and assessed to make appropriate adjustments to the strategic plan. One way to undertake this scan is with a strengths, weaknesses, opportunities, and threats (SWOT) analysis. The SWOT analysis is a methodology used by many organizations to determine the strengths and weaknesses that are inherent to the organization (internal focus) and the opportunities and threats that are outside the organization (external focus). Strengths and weaknesses are normally focused on the present state of the organization, while opportunities and threats are future-oriented. To identify internal strengths and weaknesses, the organization must monitor resources, strategies, and performance. Monitoring external forces—the political, economic, social, educational, technological, informational, and environmental trends—can help identify opportunities and threats. The leaders of an organization must dedicate the appropriate resources to properly scanning and assessing the strategic environment.

LEADERSHIP EMPHASIS: A STRATEGIC-PLANNING IMPERATIVE Employees pay attention to what is important to the boss. For the strategic plan to be effectively executed, it must be a top priority of leadership at all levels. Leaders can emphasize the importance of the strategic plan’s execution in a number of ways: Meet with subordinate leadership to explain your intent and expectations ៑ Display posters in work areas showing the organizational philosophy ៑ Post the strategic plan on the organization’s home page ៑ Promote the strategic plan on social media ៑ Address the strategic plan during media events and visits to subordinate organizations ៑ Develop and present supporting plans ៑ Host “town-hall meetings” to express the significance of the strategic plan ៑ Evaluate employees based on the accomplishment of strategic-planning products (goals, objectives, action plans, and metrics) A strategic plan provides the framework for an organization to prioritize and synchronize organizational and individual actions in order to achieve the goals and vision. However, having a plan is not enough. Midlevel leaders, supported by senior leadership, must accept execution responsibilities for the strategic plan by developing goals and objectives, creating and implementing actions plans, measuring progress, scanning the environment, and providing leadership emphasis. Leadership, particularly midlevel leadership, is the foundation of success. MW ៑

Dan Jensen, PhD, is a consultant, educator, and retired military officer specializing in strategic planning, leadership, and organizational development. He teaches organizational leadership at Harrisburg University of Science and Technology. For more information, contact him at danieljjensen@comcast.net Accomplish your strategic goals this year by attending the AMA course Strategy Execution: Getting It Done (www.amanet.org/2209).

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CREATIVE

INSIGHTS

Seven Scientific Principles That Turbocharge Presentations BY CARMINE GALLO In the past 10 years, researchers using MRI brain scans have learned more about the science of persuasion than we’ve learned in all of civilization to date. This research means we now know what moves people, and we can prove it scientifically. There’s nothing more inspiring than a bold idea delivered by a great speaker. Ideas, effectively packaged and delivered, can change the world. And few platforms are more influential in the spread of ideas than TED, the famous conference celebrating its 30th anniversary in 2014. TED presentations have been viewed more than a billion times online. Speakers who have taken the stage include some of the most influential men and women in their respective fields: Bill Gates, Sheryl Sandberg, Al Gore, and many others. After analyzing more than 500 of these presentations and talking directly to successful speakers, I’ve discovered that the most popular TED talks share several common elements that are based on the science of persuasion. Once you’ve learned the secrets that these communicators share, you can adopt them in your own presentations. Here are the seven principles: According to Larry Smith, economics professor at the University of Waterloo, “Passion is the thing that will help you create the highest expression of your talent.” Smith’s TED talk, “Why You Will Fail to Have a Great Career,” has been viewed more than 2 million times. Smith’s message is simple: Follow your passion and you will have a great career. Don’t follow it and you won’t. Although Smith’s advice is based on his 30 years of experience as an educator, neuroscience backs up his claim. Professors Joyce Bono at the University of Minnesota and Remus Ilies, now at the National University of Singapore, conducted four separate studies with hundreds of participants to measure charisma, positive emotions, and “mood contagion.” The researchers found that “individuals who are rated high on charisma tend to express more positive emotions in their written and spoken communications.” Bono and Ilies also discovered that positive emotions 1. PASSION IS CONTAGIOUS

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are contagious, lifting the moods of participants in the audience. When you’re passionate about your topic, your energy and enthusiasm will rub off on your audience.

Carmine Gallo

Nearly every popular TED presentation begins with a story, and yet, most speakers in business today tell stories infrequently. Instead they stick to data, stats, and generic marketing messages. I’ve learned a lot about storytelling from the presentation of Bryan Stevenson, a civil rights attorney whose talk received the longest standing ovation ever at TED. It was so persuasive that the audience members donated $1 million to his nonprofit organization. Stevenson told three stories which reinforced his theme that in underserved and underprivileged communities, many young people grow up without a sense of identity, which leads to profoundly harmful decisions. Stories made up 65% of his presentation. The data Stevenson used to back his arguments comprised only 10% of the presentation. Statistics support your argument; stories connect you with your audience. Uri Hasson, assistant professor of psychology at Princeton University, and his colleagues have discovered that personal stories actually cause the brains of both the storyteller and the listener to sync up. Hasson and his colleagues recorded the brain activity of a speaker telling unrehearsed stories. Next, they measured the brain activity of the person listening to the story and asked the listener to fill out a detailed questionnaire to measure comprehension. The researchers found that “the listener’s brain responses mirrored the speaker’s brain responses.” Meld your mind to that of your listener. Stories inform, illuminate, and inspire. 2. STORIES SYNC OUR MINDS

I spoke to Robert Ballard, the explorer who discovered the Titanic. His TED presentation contained 57 slides. Interestingly, the slides had no words on them, containing mostly pictures, images, and animations. “I’m not lecturing. I’m storytelling,” 3. PICTURES ARE SUPERIOR TO TEXT

CREATIVE

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Ballard explained to me. Scientists call this principle “picture superiority.” If you hear information, you are likely to remember about 10% of it three days later. Add a picture, and your recall rate will soar to 65%. Our brains are wired to process visual information differently from text and sound. In multimodal learning, pictures are processed in several channels, giving the brain a deeper, more meaningful encoding experience. Allan Paivio, a psychology professor at the University of Western Ontario, calls this the “dual-coding” theory. According to his theory, visual and verbal forms of information are stored separately in our memory as images, words, or both. Concepts in picture form are encoded visually and verbally. Words are encoded only verbally. In short, pictures are more richly stamped in our brains and easier to recall. No TED speaker is allowed to speak for more than 18 minutes. TED curator Chris Anderson has said that 18 minutes is long enough to be serious and short enough to hold people’s attention. When you give people too much information, a “cognitive backlog” occurs. The more information you ask someone to retain, the more likely he will be to forget everything. This does not mean you cannot speak for more than 18 minutes when you give a presentation. It does suggest that you should try to build in ways to reengage your audience every 20 minutes or less. Reengagement techniques might include using videos, stories, or compelling slide designs or simply taking a break from your presentation to let the audience ask questions. 4. THE 18-MINUTE RULE PREVENTS OVERLOAD

In 2009, Bill Gates gave a TED talk on the topic of reducing childhood deaths in Africa. “Malaria is spread by mosquitoes,” Gates told the audience as he picked up a glass jar sitting on a nearby table. He opened the jar and said, “I brought some here. I’ll let them roam around. There is no reason only poor people should be infected.” The audience sat in stunned silence for a moment, then laughed, applauded, and cheered. They weren’t happy about the topic, of course, but they knew that Gates had given them a novel way to consider it. Gates created what neuroscientists call an “emotion5. EMOTIONALLY CHARGED EVENTS GRAB ATTENTION

ally charged event.” Such situations grab a listener’s attention and are remembered long after the presentation is over. I’m not suggesting that you release mosquitoes in your next presentation, but I am recommending that you tap into people’s emotions to elicit joy, shock, fear, or surprise. If you can’t explain your big idea in 140 characters—about the length of a Twitter post— keep working on your message. This discipline will bring clarity to your presentation and help your audience recall the one big idea you’re trying to teach them. Since the brain craves meaning before details, the first step to giving a TED-worthy presentation is to ask, “What is the one thing I want my audience to know?” After reviewing the topics of every one of the more than 1,500 publicly available presentations on TED.com, I couldn’t find one title that was more than 140 characters. Here are some samples from the mostviewed presentations. ᔢ “How Schools Kill Creativity” (Sir Ken Robinson) ᔢ “The Surprising Science of Happiness” (Dan Gilbert) ᔢ “The Power of Introverts” (Susan Cain) ᔢ “How to Live Before You Die” (Steve Jobs) The Twitter headline works because it forces you to identify and clarify the one key message you want your audience to remember. 6. THE BIG PICTURE COMES BEFORE THE DETAILS

Psychologist Rod A. Martin has said, “Over the past century a sense of humor has become a highly prized personality characteristic.” Don’t take yourself (or your topic) too seriously. Humor lowers people’s defenses, making your audience more receptive to your message. It also makes you seem more likable, and people are more willing to do business with someone they like. While you may never speak at an actual TED conference, if you want to succeed in business you’d better be able to deliver a TED-worthy presentation. TED represents a bold, fresh, contemporary, compelling style that will help you win over any audience. MW 7. HUMOR MAKES PEOPLE RECEPTIVE

Carmine Gallo is a communications coach and bestselling author. His latest book is Talk Like TED: The 9 PublicSpeaking Secrets of the World’s Top Minds (St. Martin’s Press, 2014). He can be contacted at www.carminegallo.com American Management Association

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Becoming an

Energy Director To Lead and Achieve BY THERESA M. WELBOURNE, PhD

Human energy is required for any type of action, and energy is needed at work to achieve goals. But what do we know about exerting energy at work, and how do we assure that employees are using energy at an ideal rate to do their best? Lastly, what is the role of a manager in optimizing employee energy and directing that energy at objectives which are important to the organization? Overall, this is an area that is not familiar to most managers. However, itâ€™s a key topic for anyone who needs to lead people or projects and achieve success.

DEFINING AND MEASURING ENERGY Turning to physics, we learn that energy is the ability to do work. There are two types of energy: potential (or stored) energy and kinetic (or moving) energy. As a manager, you have little control over your own and employeesâ€™ stored energy, but you do have a role to play in converting that potential energy to moving energy and directing it toward the right goals. In physics, energy is measured by looking at the rate at which it is used or the amount of energy it takes to do something. For example, scientists examine the amount of energy it takes to raise temperature by one degree or to lift something. For our research purposes, we have created a definition and measurement of energy at work. These metrics have been used to study human energy and learn how to help managers be more effective directors of human energy. Energy defined: Energy is the internal force available for you to exert at work (ability to work). This is our version of potential energy. Energy measured: Energy is measured by assessing the level of energy it takes for an employee MWORLD FALL 2014

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to be at his or her best at work (how energy is used). This is our version of kinetic energy. Going beyond physics, we have gathered numerous types of qualitative metrics on energy. For example, we ask employees what it feels like to be optimally energized at work. They have listed the following adjectives: “Passionate, aligned, vigorous, intense, confident, motivated, involved, committed, clear goals, clarity, positive, working as a team—one energy, performing at peak level, buzz from working, positive momentum, excited, shared purpose, delivery, ambitious, fulfilled, high dynamism, confident, can do.” Energy is a concept that has scientific rigor, and it also is something that employees understand. Another way to think about energy is to examine the world of sports and sports physiology. A simple example comes from how we start new exercise programs. If you do not exert enough energy, you’re not burning enough calories and will be less likely to achieve your goals. However, if you exert too much energy, you are physically at risk of doing harm to the body. Most people cannot handle overexertion for long. When you start an exercise routine, you are given guidelines about optimal heart rates and how to work out in a target zone. Why would it be any different when exerting energy at work? Why do we think the human mind and body can multitask, work long hours, and continue to go “above and beyond” and not be at risk of harm? It’s unrealistic to think that energy in the workplace is any different from energy exerted when exercising or during other activities. Energy at work must be optimized and directed to assure success, and the work we all do contributes to the optimization of our own and others’ energy. The role that managers play is mission critical for directing energy.

HOW TO OPTIMIZE AND DIRECT EMPLOYEE ENERGY From physics, we also know that energy cannot be created or destroyed. Therefore, a manager can do two things: Create ideal conditions for energy conversion, from potential to kinetic energy ៑ Direct energy to useful and important tasks The director of a symphony orchestra is responsible for helping each individual by creating conditions under which he or she can perfect individual talents. When they are conducted or directed, the individuals come together in a harmonic work of art. This is the job of every manager—directing and optimizing conditions for work. ៑

The laws of human energy at work include the following: ៑ ៑

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Energy is all about optimization, not maximization. The optimal energy level, where an individual works at his or her best, is different for everyone. There is no magic number, and you can’t use the same methods of energy optimization for all employees. Energy optimization alone is not enough for high performance. Energy needs to be directed at the right goals. Energy fluctuates. Big swings are bad for performance. Employees do best when they can work in “the zone,” at a pace where they are most productive. This pace varies by person. There are occupational differences in the best energy levels for employees. For example, American Management Association

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sales professionals work best at a higher energy level than do engineers or programmers, who tell us they need moderate exertion levels to concentrate. A manager’s energy affects employee energy. It’s catching.

MANAGING LEADERS’ ENERGY AT WORK If energy is catching, then it’s important for managers to evaluate their own energy at work and learn how to optimize and direct their energy. It’s hard to help employees optimize their energy if your energy is suboptimal. Unfortunately, managers are having a tough time achieving these objectives. In the Leadership Pulse®, a major research project we do with a sample of leaders around the world (www.leadershippulse.com), we have been tracking managers’ energy since 2003. In Figure 1, you’ll find the trend data since 2009. When we measure energy, we use a validated metric that is based on more than 1 million data points on employee energy. We have used the metric and process in more than 50 countries, and it predicts numerous outcomes (such as productivity, quality, safety, customer satisfaction, turnover, 360 ratings of performance, turnover, patient Figure 1: Energy Trend for All Leadership Participants satisfaction, and more types of individual, team, and firm- 7.40 level outcomes, including 7.20 7.01 7.00 10-year survival and stock 6.71 6.64 6.80 6.57 price growth at the firm level). 6.45 6.60

6.41

6.31

7.00

6.38

6.24 The metric ranges from 0 to 6.40 6.18 10, with 0 being a report of no 6.20 6.00 energy at work. The numbers Mar Jul Dec Jun Sep Jan May Apr Dec Sep 2009 2009 2009 2010 2010 2011 2011 2012 2012 2013 move up the scale from low to Energy medium to high energy. At about the number 8.5, the metric shows that there is too much stimulus affecting the employee and the energy level is starting to be negatively affected, indicating the individual is at risk of lower performance or burnout. Energy, as we measure it, is an optimization construct. Being at Figure 2: Energy Questions for the Leadership Pulse Survey the maximum on energy is a bad Think of energy as the degree of internal force or power that propels your individual actions at work. You can respond thing. Figure 2 shows the energy with any number on the scale, from 0 to 10 (it's OK to use decimals such as 5.5, 6.8, etc.). graphic and questions used in the last 1. Overall, how would you rate your current energy level at work? (Enter a number from 0 to 10 using the survey conducted for the Leadership Energy Pulse scale on left.) Pulse research project.

Apr 2014

10 - Excessively high - too much going on, at risk of burnout, can't sustain this level of activity and be at your best.

7.5 High energy level

2. What is your energy level where you are at your best at work? (Enter a number from 0 to 10 using the Energy Pulse scale on left.)

5 Medium energy level

3. Please share the factors that are affecting your energy at work. The more detail you can provide, the better, as we are trying to uncover and share the drivers of optimal energy.

2.5 Low energy level

Zero - no energy for work (sick, tired, burned out, distracted)

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In Figure 2, you can see that we ask two questions to obtain quantitative data: What is your energy today, and what is your energy level at your best? These two questions are used to assess risk levels. In the same way that an exercise coach would track a client’s target heart rate, managers can assess employee energy and the risk level of 35

their teams. For our Leadership Pulse sample, we show the trend data, which indicates in Figure 1 that energy is on the rise. Is this good or bad, though? It’s the gap between “energy today” and “energy at your best” that tells the risk story. To determine the team energy risk distribution in Figure 3, we subtracted “energy at best” from “energy today” and then took the absolute value of that score. Shown are gaps, or points, between “energy today” and “energy at best.” Our research shows that a one-point difference between “energy today” and “energy at best” is an indicator that an employee is at risk of lower performance, burnout, or leaving the firm. Therefore, for the Leadership Pulse sample, we calculated the gap between ideal energy and energy today, plotting the number of points and showing the percent of the 550 participating individuals in each bucket. In the most recent Pulse, 52% of respondents were more than a full point from their best energy (see Figure 3). This means 52% of leaders who responded are at risk of lower performance. And if energy is catching, this says that even more employees may be at risk.

ASSESS YOUR OWN ENERGY AT WORK The first thing any manager of people or projects should do is assess his or her own energy at work. If your energy is suboptimal, then diagnose what’s affecting your energy and how you can change your environment to get “in your own zone.” To assess your energy at work, use the sample survey in Figure 2. To find your “gap score,” subtract the energy level where you are at your best (question 2) from the energy today score (question 1), or question 1 - question 2. Your gap will be either positive or negative. If the gap is more than one, this is an at-risk indicator. With your number in hand, ask these questions: Figure 3: Team Energy Risk Distribution for All Leadership Participants

17.7% Zero pts

26.5% 8.6%

0.01 to 0.50 pts 0.51 to 1.00 pts 1.01 to 2.00 pts

25.7%

21.6%

2.01 pts or more

៑ What’s

affecting your energy at work today? ៑ What can you change to get to the point where you are at your best? ៑ If there's a short-term issue that you know will keep you in the at-risk state for some period of time, make a recovery plan. What will you do when the situation is over? How do you get back to being at your best? ៑ How can others help you? Next, track your energy every week; keep a diary and focus on what is increasing or decreasing your energy at work. Start to learn what you can do to stay in your best zone.

When your own energy is optimized, then take those personal lessons to your team. Learn to be an energy director by helping every person working with you to be at his or her own best.

HELPING EMPLOYEES OPTIMIZE THEIR ENERGY The second body of work for any manager concerns helping employees optimize and direct their energy at work. A manager’s efforts will improve individual well-being, team performance, and overall organizational success. Here are two steps to take: Create conditions for optimal energy conversion. In our research, we examined what 36

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happens to either increase or decrease energy into suboptimal levels. Using open-ended comment data, we found that two overall areas were important for creating ideal energy conditions. The first is all about relationships. We used a broad definition of relationships and found that the following were discussed by employees: ៑ Me and my job ៑ Me and my company ៑ Me and my peers ៑ Me and the customers with whom I work ៑ Me and my career ៑ Me and the leaders in the organization About 30% of the comments were on these topics. Thus, diagnosing the state of your team’s relational capital—the value of all these relationships—can help focus your attention on actions that will improve conditions for energy conversation and create optimal energy. Focus on direction and do it frequently. The other 70% of open-ended comments were all

about direction. Employees were energized or de-energized by the following: ៑ Unclear direction, with too many projects being added and no one clarifying priorities ៑ A change in direction they are not told about ៑ No direction, where it’s not about strategy, it’s about what to accomplish this week In our research and client work, we find that direction continues to be a challenge, not just for entry-level employees but for individuals at all levels of a firm. The high rate of change experienced by organizations is affecting employees and creating unclear priorities or perhaps too many number-one jobs. Helping employees by creating frequent direction discussions can have positive effects on energy everywhere. Learning to be an energy director requires knowledge of the energy optimization and directing process. Effective managers assess their employees’ energy, understand what’s impacting energy levels overall, know about recovery patterns, and continually seek to help staff direct their energy at the activities that will create the most positive outcomes.

DRAWING CONCLUSIONS There’s a lot of talk today about employee engagement. Even though millions, and perhaps billions, of dollars have been spent on improving engagement, the numbers continue to decline. Something is missing in our understanding of this work, and we propose that employee energy at work may be the misunderstood component linking people to performance. Also, energy fluctuates tremendously from week to week, so studying it once a year or every other year is problematic and not useful for the everyday manager. Managers who are highimpact energy directors measure employee energy frequently, teach employees how to optimize their energy, examine their own personal energy and how it is impacting their people, and create an ongoing process of optimizing and directing employee energy at work. MW Theresa M. Welbourne, PhD, is president and CEO of eePulse Inc. She is the FirsTier Banks Distinguished Professor of Business and director of the Center for Entrepreneurship at the University of Nebraska-Lincoln. Welbourne’s work focuses on human capital and leadership strategies that drive growth, innovation, and high performance. She can be reached at theresa@eepulse.com Bring out the best in your team—take The 7 Habits of Highly Effective People for Managers (www.amanet.org/2602). MWORLD FALL 2014

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Developing

21st-Century Leadership Skills BY ADAM CANWELL, VISHALLI DONGRIE, NEIL NEVERAS, AND HEATHER STOCKTON

Developing leaders is a major human capital need in today’s organizations. Companies face an urgent need to develop leaders at all levels, including bringing younger leaders online faster, developing leaders globally, and keeping senior leaders relevant and engaged longer.

Twenty-first-century leadership is different from that of earlier generations. Companies face new leadership challenges, including developing millennials and multiple generations of leaders, meeting the demand for leaders with global fluency and flexibility, building the ability to innovate and inspire others to perform, and acquiring new levels of understanding of rapidly changing technologies and new disciplines and fields. For companies around the world, a shortage of leaders is one of the biggest impediments to growth. This challenge is particularly acute today as the global recovery strengthens, companies seek to rapidly grow their businesses in new markets, and older leaders begin to retire at accelerating rates. The executives in our 2014 global survey viewed leadership as the highest-priority issue of all those we asked them about. Yet, despite the acknowledged importance of leadership, most companies believe they are not meeting the challenge (see Figure 1). 38

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GRAPHIC: DELOITTE UNIVERSITY PRESS I DUPRESS.COM

Leadership remains the number-one talent issue facing organizations around the world. In Deloitte’s 2014 Human Capital Trends survey, 86% of respondents rated it as “urgent” or “important.” But only 13% of respondents said they do an excellent job of developing leaders at all levels—the largest “readiness gap” in our 2014 survey.

៑

Only 13% of companies in our survey rate themselves “excellent” in providing leadership programs at all levels—new leaders, next-generation leaders, and senior leaders 66% believe they are “weak” in their ability to develop millennial leaders, while only 5% rate themselves as “excellent” More than half (51%) have little confidence in their ability to maintain clear, consistent succession programs Only 8% believe they have “excellent” programs to build global skills and experiences

CRITICAL SKILLS NEEDED TO SUCCEED Not only are companies not developing enough leaders, but they’re also not equipping the leaders they are building with the critical capabilities and skills needed to succeed. Today’s market environment places a premium on speed, flexibility, and the ability to lead in uncertain situations. At the same time, the flattening of organizations has created an explosion in demand for leadership skills at every level. Our research shows that foundational and new leadership skills are in high demand, including: ៑ Business acumen: understanding the core business well ៑ Collaboration: having the ability to build cross-functional teams ៑ Global cultural agility: managing diversity and inclusion ៑ Creativity: driving innovation and entrepreneurship ៑ Customer-centricity: enhancing effective customer relationships ៑ Influence and inspiration: setting direction and driving employees to achieve business goals ៑

Building teams and talent: developing

people and creating effective teams

Figure 1: Current Leadership Programs Falling Short Number of respondents Providing executive involvement and ownership of leadership 1,175 development

34%

49%

17%

Providing leadership programs for For example, a highly all levels (new, next generation, 44% 43% 13% 1,162 senior leaders) successful global techMaintaining clear and current 1,154 51% 39% 10% succession plans and programs nology company disIncluding global skills and 1,034 covered that it needed 52% 39% 8% experiences in leadership program four leadership archeProviding experiential, 1,142 56% 36% 8% role-based leadership programs types: entrepreneurs Providing focused leadership 1,099 28% 66% 5% who can start a busiprograms for millennials % of total number of responses ness; scale leaders who HR executives’ assessment of leadership program capability levels Weak Adequate Excellent can build up a business; Graphic: Deloitte University Press I DUPress.com efficiency leaders who reduce costs and improve operations; and fix-it leaders who turn businesses around.

The core capabilities for leadership are well understood. Yet Deloitte’s experience over the past decade suggests that the quality of leaders is declining. This would mean that companies need to reexamine and redesign their leadership development programs. Our survey suggests this has become a highly urgent challenge for corporate leaders worldwide, MWORLD FALL 2014

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Figure 2: Urgency vs. Readiness: Who is Leading? Who is Lagging? Leadership

-51

Netherlands

-50

Brazil

-48

Japan

Capability gap grid 100 = Ready ➔

Capability Gap Index (readiness - urgency)

Mexico

-43

-38

Australia

-37

Poland

-37

South Africa

-36

United States

-35

Argentina

-34

Uruguay

-33

Canada

-32

China

-32

All others

Somewhat ready (50)

Belgium

-40

Kenya Portugal 50

India All others United Kingdom

Chile Switzerland Canada

Ireland

Spain

Mexico

Australia

Germany

Luxembourg

Uruguay United States Argentina

Switzerland

-32 -30

United Kingdom

-29

Germany

-29

Chile

-29

Luxembourg

-29

India

Brazil South Africa

Belgium

China 30

-22

Ireland

-21

Kenya

-15

➔ 0 = Not ready

Spain

-26

Netherlands Poland

Japan

40 ➔ 0 = Not important Somewhat important (33.3)

Important (66.6)

80 100 = Urgent ➔

Portugal Graphic: Deloitte University Press I DUPress.com

The Human Capital Capability Gap Index The Deloitte Human Capital Capability Gap Index is a research-based index that shows HR’s relative capability gap in addressing a given talent or HR-related problem. It is computed by taking an organization’s self-rated "readiness" and subtracting its "urgency," normalized to a 0-100 scale. For example, if an organization feels that an issue is 100% urgent and it also rates itself 100% capable and ready to address the issue, the capability gap would be zero. These gaps, which are almost always negative, can be compared against each other. The capability gap grid By plotting the gaps on a grid (with readiness on the vertical and urgency on the horizontal), we can see how capability gaps vary among different countries and industries. • Capability gaps at the lower right part of the grid are those of high urgency and low readiness (areas that warrant major increases in investment). • Capability gaps at the upper right part of the grid are highly urgent, but companies feel more able to perform in these areas (they warrant investment but are lower priority than those at the bottom right). • Capability gaps on the left side of the grid are areas of lesser importance, and those lower in the grid are areas of less readiness.

especially in Brazil, Mexico, and the Netherlands. Executives in few countries appeared to be prepared to meet this challenge (see Figure 2 above).

Building a leadership pipeline requires a high level of sustained investment. The entire industry of leadership development represents a $14 billion marketplace. High-impact companies in the United States spend more than $3,500 per person each year to develop midlevel leaders and more than $10,000 to develop senior leaders. Strong leadership programs target leaders at all levels. At the early stages in the leadership pipeline, potential leaders need to acquire core skills in supervision and management, with frequent assignments to round out their skills. Later in their careers, rising leaders must understand all the business functions and how to run a P&L. It is also critical to understand that, despite the proliferation of leadership fads, there are no shortcuts to building a leadership team that is broad and deep. A new leader typically needs 18 40

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GRAPHIC: DELOITTE UNIVERSITY PRESS I DUPRESS.COM

BUILDING THE LEADERSHIP PIPELINE

months before feeling fully comfortable in a new role; for a midlevel leader, the time period stretches from 24 to 36 months. Although most companies develop somewhat rigid leadership tracks, they may be better served by developing paths to leadership that are more flexible. Some leaders will move into a top role quickly due to situational needs or local talent gaps. Others will develop over the course of many years. High-performing companies now develop leaders locally, tapping into the local cultural experiences of potential leaders in each country. In a recent study of top-leadership progression at a major energy company, we found that the paths for successful leaders in China were dramatically different from those for leaders in the United States. U.S.-based leaders took a more traditional path through a predefined set of business assignments; successful leaders in China were promoted much more rapidly in the energy company. This discovery led top management to rethink the company’s traditional model and enable local teams to be more flexible in the leaders they develop.

THE IMPORTANCE OF LEADERSHIP STRATEGY Building leaders requires more than a portfolio of training programs. Senior executives should create a culture that broadens the opportunity for leaders to develop in new ways. This means putting potential leaders in positions that stretch them beyond their current skill sets and continuously coaching and supporting leaders so that they can build their capabilities as rapidly as possible. While this requirement is increasingly well known, in our experience it is simply not widely adopted and practiced. This process is relevant to all levels of the organization and to all generations of employees. High-potential millennial leaders are looking to be identified early and placed on accelerated development timetables. Midcareer leaders are looking for challenging roles that allow them to make capability leaps—deepening and broadening their leadership skills to prepare them for more senior roles and new business challenges.

BUILDING A PATHWAY TO LEADERSHIP ANZ, a leading Australian bank and financial services provider, set out to transform itself into a “super-regional bank,” focused on achieving aggressive growth outside its home markets of Australia and New Zealand. To meet these goals, ANZ had to ensure that its leaders had the distinctive set of capabilities necessary for the transition. The first phase of the program built the foundation for organizational leadership in the region through the development of a unique ANZ leadership model, with the full commitment of senior executives. The model identified leaders at all levels of the organization and critical leadership transition points. In the second phase, the program was deepened through the adoption of an informal onlinelearning tool implemented widely across the bank. A generalist banker program brought the new strategy to one organizational level; an executive leader program was required for senior executives; and recommended learning was introduced for first-time managers. A speaker series brought the strategy to life for all staff. Currently, in the third phase, the program has adopted a model of leaders teaching leaders, with a renewed focus on identifying and targeting high-potential leaders for the executive leader program. Thus far, more than 5,400 people have completed programs in the pathway, MWORLD FALL 2014

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logging close to 110,000 hours of learning. Business results for the bank have continued to improve throughout the strategy’s implementation. The bank is increasing its rate of internal leader promotions as well.

DEVELOPING LEADERS AT ALL LEVELS ENABLES MISSION SUCCESS Few organizations face more pressing demands for leadership than the U.S. Department of Defense. With more than 1.4 million men and women on active duty, 1.1 million serving in National Guard and Reserve forces, and 718,000 civilian personnel, the Department of Defense requires leaders at all levels capable of understanding complex security threats around the world, making split-second life-and-death decisions, and achieving mission success—all in highly volatile, ambiguous, and continually changing environments. To accomplish this goal, the department invests heavily in developing well-rounded leaders at all levels. Leadership training is embedded into every stage of a military member’s career. Completion of this training is typically required for promotion and advancement, so leadership is effectively built into the department’s performance and rewards system. Prospective officers—the high-potential leaders of the military—undergo four years of progressively more challenging leadership training, either at a service academy or in an ROTC (Reserve Officers Training Corps) program, before they receive their commissions or first assignments. Officer candidates are pushed into leadership roles early and often, allowing them to continually build their leadership skills over time. Upon graduation, officers typically receive leadership training at every stage of their careers. Those officers who reach the highest levels of command typically attend at least three formal schools, with specific leadership training that ranges from several weeks to nine months. During this time, officers focus solely on improving their leadership skills and are free from day-to-day assignments that distract them from their training. At every stage in their career, officers are pushed to expand their leadership skills through training and hands-on field experience. Critical skills such as teamwork, clear communication, contingency planning, adaptability, time management, and aligning priorities and strategy are continually reinforced. The result is a leadership training program that embodies best practices and builds leaders at every level of the organization.

WHERE COMPANIES CAN START Building a global leadership pipeline takes time, investment, and executive focus. Potential starting points include the following: ៑

Engage top executives to develop leadership strategy and actively govern leadership development. Focus on gaining executive commitment to the process. Two trends are

gaining traction: First, companies are involving their executive teams, and increasingly their boards of directors, in the leadership process by providing them visibility to and soliciting their input on the leadership pipeline, gaps, and programs. Second, business leaders are 42

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recognizing that their direct involvement in leadership pipelines and gaps is critical to anticipating challenges in the development and implementation of future strategies. ៑

Align and refresh leadership strategies and development to evolving business goals.

Different business goals—growth, innovation, quality, new markets, acquisitions—require different combinations of leadership experiences and capabilities. As businesses, technology, and competitive and regulatory environments rapidly change, companies are challenged to create new types of leaders with more varied and deeper leadership experiences. ៑

Focus on three aspects of developing leaders: 1. Develop leaders at all levels. Companies are run by first-line supervisors and middle

management. Invest in these levels as well as in top leadership roles. 2. Develop global leaders locally. The days of expatriate leaders are over; high-performing companies build local leaders from the ground up. 3. Develop a succession mindset. It takes years to build great leaders; the pipeline should be growing continuously. ៑

Implement an effective leadership program. Each company needs a unique leadership program. Successful organizations often ensure that their programs feature current leaders teaching future leaders—an idea that has been around for some time but has not been practiced widely enough. Assign a top business and HR executive to take responsibility, and be prepared to spend significant time and money. In developed markets, this investment can be in the range of $2,000 to $10,000 per leader every year. Focus on how to develop leaders more quickly by simplifying competency models, using action learning, and assessing leaders with analytics.

BOTTOM LINE As in previous years, leadership continues to top the priority list in the 2014 Human Capital Trends survey. The challenge is to develop leadership pipelines that are global, broad, and deep, reaching to every level of the organization. This process involves a significant investment of time and resources and a commitment to leadership from the board and executive team. Perhaps the biggest challenge is for business and HR leaders to ask whether they are confident that they are doing enough and whether they are exploring new approaches to moving the needle on their organization’s leadership requirements. MW Adam Canwell is the human capital leader, Deloitte Australia, Deloitte Touche Tohmatsu. He has a strong track record of working with leadership teams on identifying priorities and leading programs to effectively deliver change. Canwell has deep experience in the design and delivery of leadership programs to increase their performance. Vishalli Dongrie is the talent, performance, and rewards leader, Deloitte India, Deloitte Consulting India Pvt Ltd. Dongrie is considered one of India’s most impactful leaders in talent management, leadership, and organization design. In the talent, performance, and rewards space, she has led large international assignments in leadership capability building, top-management assessment and development centers, career paths, and succession planning. Neil Neveras is the global leadership services leader, Deloitte Consulting LLC. Neveras helps clients solve their most complex leadership and talent challenges in areas including strategy, competencies, assessment, program design, succession planning, coaching, career paths, and success metrics. Heather Stockton is the human capital leader, financial services industry, Deloitte Canada. She also is global human capital leader for the financial services industry. Through her work in developing and executing strategic plans, Stockton has become an advisor to executives who are undertaking business transformation, undergoing merger integration, and changing their operating model.

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The Generic Leader Network

And the “Acceptance App” BY ROBERT C. McMILLAN

Accepting your own potential will not automatically open doors for you, but it will allow you to see the opportunities that stand before you. You often have to open those doors of opportunity yourself, and sometimes—to be blunt—you have to flat-out knock them down. The greater the opportunity is, the more challenging the door will be. Sometimes life’s surprises and challenges force you to accept your potential and put it into action. The same can be said about accepting your leadership potential. What leadership potential are you aware of that you may have but have not fully accepted and placed into full action? What behaviors, skills, and talents are you ignoring? What is limiting the awareness of your potential to take action? Just as a smartphone needs apps to fulfill its potential, to become a leader you need to apply “apps” in your thinking. In the Next-Gen Leadership System, accepting your potential is called the “Acceptance Application.” Leadership acceptance is different from leadership awareness. Leadership awareness is a result of recognizing one’s ability to lead others. Leadership acceptance means embracing one’s leadership potential and releasing it into action. Others accept your ability to lead them. Leaders have to connect with others to lead them.

RECOGNIZING GENERIC LEADERS There are several types of leaders. The type I’m concentrating on here is the “generic leader.” These are general leaders who have accepted their accountability to lead. They direct activities and assignments well and monitor progress. However, they struggle with identifying process challenges and issues, given their commitment to timelines. They like to control the decisionmaking process. But when it comes to group thinking and collaborating to solve crossboundary issues, they may become inflexible because of their emotional ties to the process. There also are “brand leaders.” These leaders always stand out from the rest because they have developed their own brand of leadership. In contrast, generic leaders have not developed their own unique brand of leadership, whether they are new to the leadership “marketplace” or have spent their entire careers there. They operate generically. They often are generic because they have 44

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adopted someone else’s leadership brand. The generic leader is packaging and marketing his or her leadership style from that of a mentor, supervisor, or brand that already exists in the culture. As with any system, generic leaders also come with limitations, which have to do with user expectations to a large extent. Leaders often place on themselves false expectations—they feel pressured to play all leadership roles and positions simultaneously. What I call “2G–Generic Network leaders” have several limitations, and each can be transformed into benefits if appropriately developed. One of their limitations is that generic leaders are appointed to their positions, which is challenging in organizations that require leadership acceptance before appointment. They are largely transactional, but not transformational, leaders. The 2G–Generic leader, in many instances, is the most common type of leader and the “network” that most professionals who are given leadership responsibility reside on. Most generic leaders are in management positions, but CEOs and officers operate on this network as well. In many instances, it is their primary residence because they lead based on position, title, and rank. Generic leaders have been observed by peers, supervisors, and management as professionals with the ability to lead a task, assignment, function, process, or project well before they are considered for a formal leadership position. They consistently demonstrate their ability to connect with, build relationships with, and oversee professionals. 2G–Generic leaders have more than just the potential to be leaders; they have the skills and competencies. They have experienced leadership before being promoted into a position of power or authority over others. Operating on the 2G Leadership Network requires the following personal oath: Accept your leadership potential; accept your leadership responsibility; and accept the fact that others must accept you as a leader. If you are willing to do these three things, and put into action the right behaviors, you are on your way to becoming a great leader. To be effective on the 2G–Generic Leader Network, leaders must follow processes, procedures, and business rules to a T. On this network, there is not a lot of flexibility to creatively change, alter, or modify set processes on the fly. Therefore, generic leaders are the referees who ensure professionals are executing assignments within the rules. To this extent, they are designed to limit changes, risks, and errors. To achieve this, generic leaders rely heavily on structure and teams. The best generic leaders are individual contributors who work with their teams as they manage the overall activities and monitor progress as necessary. Generic leaders establish positive relationships with teams and individual contributors. They recognize that everyone is a leader,

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and their actions reflect mutual respect. Generic leaders who optimize the 2G–Generic Leader Network make time to visit the floor, engage with aspiring leaders, and insert themselves into the process without controlling the decisions and actions of others by using their authority. They don’t have to check in because they never check out. To become high-potential leaders and establish recognition as effective generic leaders, they simply lead while doing. In addition to being great generic generalists, generic leaders also are good communicators. They have the ability to communicate in visual and auditory mediums. People are either visual or auditory learners, and leaders must have the ability to determine which medium is most effective for their teams and individual contributors. Generic leaders also must use skills to connect with professionals who may be categorized as introverts or extroverts. The ability to be a good communicator presents leaders with strategic opportunities to create an environment where employees can offer ideas and suggestions on how to deliver products or services more effectively, ultimately improving customer satisfaction both internally and externally. The generic leader is the key leadership role that affects quality, performance, productivity, and profitability. 2G–Generic leaders are a great resource and critical to any organization and team.

DEVELOPING GENERIC LEADERS Unfortunately, being accepted as a leader by others is not standard protocol in corporate America, but it should be a part of every organization’s leadership system. We all know people who are in leadership positions, and as we observe their behavior, we ask, “How did they get in that position? Who hired them?” In many instances, this unfortunate situation occurs because the organization lacks an effective leadership system, resulting in people being promoted into formal leadership positions such as team leads, managers, or directors without the development of their potential. As a result, other employees do not consciously accept and acknowledge the person’s leadership abilities. Generally, these events place the leader and the organization at a huge disadvantage, because employees are clueless about the leader’s abilities, potential, and capabilities and often are resistant to that leader. This also creates a scenario in which the leader is not sure of his or her own potential and has not fully accepted the leadership role. The key to success for the Generic Network leader is to reach leadership acceptance from others first and limit their use of the “leadership-by-appointment card.” A major limitation to 2G–Generic leaders is their inability to separate their approach, style, and behaviors from the culture in which they operate. In terms of tenure, some generic leaders are new leaders and many are intermediate leaders; in both instances, their leadership style is most often a carbon copy of other leaders’ styles, because generic leaders tend to copy someone else’s brand while trying to create or discover their own. It is critical for generic leaders to spend time self-reflecting and developing their own unique approach to leadership that will counter the

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perception that they are leadership clones among those who accept but have not fully embraced their leadership. The biggest mistake you could make with generic leaders is to place them in the role of being transformational leaders. Generic leaders are the complete opposite of transformational leaders. It’s not that they cannot be transformational. Instead, their position requires transactional thinking and processing. Transactional leaders are focused on the short-term processes and procedures that result in the transaction of a product or service. In contrast, transformational leaders are focused on the long term, identifying value-based outcomes that in the future will require changes to transactional processes and procedures to be obtained. Because of complex business issues and challenges, the expectations of generic leaders can at times become blurred as people look for them to be transformational. For generic leaders to achieve their maximum potential, they must focus their energy on the short term of transactional leadership and be able to collaborate with transformational leaders to improve overall business goals and objective outcomes. As a 2G–Generic leader, you need a “mindware” application that will operate as “virus protection software” to protect your self-esteem and confidence and, at the same time, help you process and accept the reality of your leadership situation in your professional and personal life.

USING YOUR OWN “ACCEPTANCE APP” Generic leaders accept what they can’t change and what they can, and they know the difference between the two. The best generic leaders take expectations and develop specific outcomes with measurable steps to achieve the desired results. Successful generic leaders have a leadership “Acceptance App” that guides them to accept their leadership situation and role and helps them decipher the things they can change and those they cannot. 2G–Generic leaders must accept early on in their role that there will be times when they interact with professionals at all levels who may have false perceptions of them, question their leadership ability, and make their leadership experience miserable. This may come as a surprise for many new leaders and can, quite frankly, create such low confidence that some leadership careers may end prematurely. These leaders have not learned how to deal with “professional haters” who try to affect a leader’s thinking and actions and sabotage his or her career. The Acceptance App is critical, giving leaders the necessary defenses to identify the haters and adjust their emotional intelligence to conquer them. MW Robert C. McMillan is a transformationalist and a leadership coach and consultant to emerging, aspiring executive leaders, teams, and organizations. To learn more about The Next Gen Leader™, visit www.robertcmcmillan.com Adapted, with permission of the publisher, from The Next Gen Leader: Cutting Edge Strategies to Make You the Leader You Were Born to Be by Robert C. McMillan. Copyright 2014, Robert C. McMillan. Published by Career Press.

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There’s No Place Like the Classroom We never stop learning. Throughout our lives, from school to careers to what we do in our leisure time, we’re acquiring new skills. And the best way to learn behavior-based skills is through practice. You cannot learn to ride a bike, hit a golf ball, or fly a plane from a book. In order to learn, you need some combination of information, expert feedback, and experience, either simulated or from real-world examples. In this issue of MWorld, Carmine Gallo noted that while TED presenters base their presentations on solid facts, information alone will not communicate a message effectively. The best TED presenters have told stories that helped the audience synthesize the information and engaged them with humor. He also found that presenters who exhibited passion, used visuals instead of text, and didn’t overload their audiences with information were able to communicate messages that had a high level of retention. Training is no different, and Gallo’s findings are echoed by research from Training Industry, Inc., which found that managers overwhelmingly prefer face-to-face learning and believe it’s more effective than training alternatives. (See the First-Time Manager Training Study, 2012, and Training for Leaders of Technical Professionals Study, 2014, at www.trainingindustry.com) An effective facilitator doesn’t simply present best practices; he punctuates them with examples from his own experience and translates them into engaging experiences that learners retain. This style of communication also leads to higher revenues. In our cover story, Brian Tracy talks about his selling model that he has taught to more than 2 million people worldwide. He emphasizes that sales techniques need to be adapted based on real-world interaction with customers. Salespeople need to get feedback from their customers by asking questions and adjusting the sales pitch to their needs; that is the most effective method of closing a sale. This highly productive consultative approach requires sophisticated communication skills best learned through iterative practice. The combination of learning through personal experience, interaction, and feedback is what we at American Management Association are all about. AMA has more than 90 years of experience in determining what individuals, teams, and organizations need, and we have developed a unique brand of experiential learning. We believe the most effective training still occurs in a classroom where students can practice what they learn in a safe environment and get live feedback. We’ve even found a way to make online learning effective through interactive exercises in which participants get coaching from peers and our expert faculty. I encourage our readers to explore all the resources AMA offers—especially face-to-face, experiential learning, whether in our many open-enrollment programs or through our highly effective customdelivered programs worldwide—to improve their skills, their teams, and their organizations.

Edward T. Reilly President and CEO American Management Association

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Talent Transformation is the real key to your organization’s future success. And AMA Enterprise excels at it.

he secret to achieving breakthrough results is your talent— the most valuable asset you have. When teams of people perform at the top of their potential every day, amazing things can be accomplished. AMA Enterprise partners with organizations to unlock the hidden potential and unleash the full power of your talent. We’re a specialized division of AMA that designs corporate and government solutions to help transform your enterprise-wide talent to fuel innovation and high performance, and achieve optimal business results. Our team of expert consultants, program developers and facilitators—in collaboration with your team—creates targeted learning solutions geared to achieving your goals. Find out what AMA Enterprise can do to help your organization reach even greater levels of success. To speak with one of our experts or to get access to our latest thought leadership research, please call 877.880.0264 or email us at info@amaenterprise.org

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Mworld Fall 2014

Brian Tracy on Achieving Unlimited Sales Success

Mworld Fall 2014

Published on Oct 15, 2014

Brian Tracy on Achieving Unlimited Sales Success

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