Grow a Big Company by Keeping Your Job Small

 


 

These leadership insights from MCI founder Bill McGowan should sound familiar to my executive coaching clients and to readers of this blog.

 

INC.: You’ve taken a company from nothing and, in the span of 18 years, created a new industry and built a company doing almost $3 billion worth of business. How do you account for the fact that you didn’t allow the company to outgrow you?

McGOWAN: Besides the fact that there is no accounting for it, I suppose it’s because I realized at every point along the way that I didn’t need to be the person who had to do any particular thing other than make sure that the focus and direction of the company was clear, and that the forces and people were set in motion to get us where we were going.

I’m naturally a delegator. I guess I realized early in life that, (more…)

Berkshire’s Radical Strategy: Trust – NYTimes.com

 


 

Here is a top-level endorsement of a principal I have often voiced, most specifically in this popular post, Truth or Consequences? Beyond the Punishment Model.

“By the standards of the rest of the world, we overtrust. So far it has worked very well for us. Some would see it as weakness.” … Mr. Munger and Mr. Buffett argue that with the right basic controls, finding trustworthy managers and giving them an enormous amount of leeway creates more value than if they are forced to constantly look over their shoulders at human resources departments and lawyers monitoring their every move.

“We just try to operate in a seamless web of deserved trust and be careful whom we trust.”

Munger agrees with what I have called natural consequences, citing “late Columbia University philosophy professor, Charles Frankel, who believed ‘that systems are responsible in proportion to the degree in which the people making the decisions are living with the results of those decisions.’ …if you built a bridge, you stood under the arch when the scaffolding was removed.’”

 –Warren Buffett’s business partner
Charlie Munger, Vice Chairman
Berkshire Hathaway
Berkshire’s Radical Strategy: Trust – NYTimes.com.

Read more about the power of trust on this blog by clicking here.

 


 

The Courage to Create Community

Expanded 2nd Edition Now on Sale!

Tony’s short book on building community is now available
with an extra chapter and a guide to additional resources.

The Courage to Be in Community Expanded 2nd Edition

The new chapter is a simple, practical guide to building better relationships at work and at home. The focus of the book is the importance of compassion and authenticity, while this new section is all about implementation, with specific advice on how to be compassionate and authentic in your day-to-day life.

This expanded edition also includes links to recommended books and articles for further study and practice.

Click here to “Look Inside” & see a sample on Amazon.

➤ Paperback , hardcover, and Kindle available on Amazon!

➤ Paperback and hard cover available on Barnes and Noble!

 

iTunes Spoken word version available on Audible

Audio version read by Tony Mayo also available.

 To hear a sample click here for Audible or iTunes.

 

 


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Poor Morals or Poorly Managed?

 


 

As I discussed in my popular article, Truth or Consequences: Beyond the Punishment Model, employers are too quick to act like cops with the result that employees respond like criminals. Here is more support for my advice, this time from a rigorous study of new restaurant software. Instead of using the software mainly to fire workers suspected of theft, all employees were made aware that the software was looking for misbehavior. The results were positive and–to those not familiar with my approach–surprising.

The same people who are stealing from you can be set up to succeed.

–Prof. Lamar Pierce
Washington University

“The savings from the [monitoring software’s] theft alerts themselves were modest, $108 a week per restaurant. However, after installing the monitoring software, the revenue per restaurant increased by an average of $2,982 a week, or about 7 percent.

“The impact, the researchers say, came not from firing workers engaged in theft, but mostly from their changed behavior. Knowing they were being monitored, the servers not only pulled back on any unethical practices, but also channeled their efforts into, say, prompting customers to have that dessert or a second beer, raising revenue for the restaurant and tips for themselves.”

 

How Surveillance Changes Behavior:
A Restaurant Workers Case Study
The New York Times

 


 

Get smarter by asking “dumb” questions




Mine was the Depression generation of journalists. Many of the best people were not educated. When I went to London as a sportswriter, I didn’t even know the difference between the Baltic states and the Balkans. But I learned the advantage of the dumb-boy technique. I found that people love to talk about themselves. You get more news by trust than by tricks.

But that is not a very popular idea with this generation. Because they went to college, they think that they know more than the guys who run the joint, and that’s a pretense that doesn’t work. Also they like big shots. I always felt that the way to gather news in Washington is at the periphery not at the center. You get it from the people who tell the big shots what to say.

 

James Reston
interviewed by Alvin P. Sanoff
US News and World Report

 




What Trust Is

 


 

Trust is increasingly recognized as an essential element of successful personal relationships, effective teamwork, and large-scale commercial relationships. The amount citizens of one country trust the residents of another has even been shown to correlate with the amount of trade between the countries.

Evaluating the level of trust in a relationship is an often evaded and sometimes sensitive task. My work coaching top executives and facilitating work groups has taught me that the “trust topic” is much easier to discuss once we realize that trust has at least five constitutive components. Examining each aspect of trust, one by one, leads us to better judgments and more fruitful conversations.

 

  1. Sincerity
  2. Capacity
  3. Competence
  4. Consistency
  5. Care

 

When we say that we trust or mistrust a person it means that we have evaluated their:

1. Sincerity — Does what the person says match their internal conversation? Are they telling us what they honestly believe and truly intend? Once a person establishes a reputation for (more…)

The asymmetry of give and take

 


 

Boaz Keysar

The Great Recession has led many of my executive coaching clients to reduce 401(k) contributions, celebrations, work hours (through furloughs), and cut other employee perqs. These leaders often explain the reductions as prudent adjustments to avoid layoffs. Employees, unfortunately, are likely to react by becoming less trusting and cooperative with their employers, as this new research illustrates.

 

Although people reciprocate kindnesses proportionately, slings and arrows prompt bullets and grenades.

 

By Laura Putre

 

“Even something that is not so strong as a vindictive action—something simply perceived as a negative act,” [Professor Boaz] Keysar says, “escalates quickly.”

The researchers paired up participants for several games of give and take. In one a designated leader decided how much of $100 to give to a partner. In another, leaders decided how much of $100 to take from their partners. … Subjects in the study also consistently reacted better to receiving something than to having it taken from them, even when the gift left them with less money, say $30 instead of $50.

Leaders, however, thought they were being fair … “They did not anticipate,” Keysar says, “that the other person was going to perceive them as doing something negative.” What’s more, he discovered that as the game wore on, each successive round saw partners grabbing more and more as they alternated the taking role. Perceiving the takers as selfish, the participants became less generous.

How to avoid the retribution? This paper doesn’t say. Other research suggests laying out the facts for employees and letting them design the adjustments. People are much more supportive of changes they have helped create.

 


 

See also, on this blog, step-by-step conversation instructions with video here:
The Conversation Contract.

 


 

It pays to trust your employees

 


 

Study indicates that employees who are trusted by managers do better work and are more loyal to their employer.

Journal of Management

 


 

A Closer Look at Trust Between Managers and Subordinates: Understanding the Effects of Both Trusting and Being Trusted on Subordinate Outcomes

The authors propose that trust in the subordinate has unique consequences beyond trust in the manager. Furthermore, they propose joint effects of trust such that subordinate behavior and intentions are most favorable when there is high mutual trust. Findings reveal unique (more…)

Leadership in a True Emergency

Lippold of the USS Cole

At Accelerent, I was lucky to meet the commander of the USS Cole and hear his story of the day his destroyer was nearly sunk by al-Qaeda. Kirk Lippold made clear that his ship was saved mostly because of how he led and trained his crew in the years prior to the attack, rather than by any dramatic decisions or heroics on October 12, 2000.

His “Five Pillars of Leadership” are:

Integrity

• Vision

• Personal Responsibility and Accountability

• Trust and Invest

• Professional Competence

He gave a thrilling and informative presentation. I particularly thanked him for illustrating the masterful use of chain of command, maximizing his impact as a leader by improving his officers rather than continually reaching down to personally resolve specific issues.

Click for larger image

The Navy, unfortunately, tends to be rather unforgiving of officers whose ships are damaged so Kirk Lippold never made Captain. The military’s loss is our gain as he tours the country sharing his leadership lessons.

Self-Inflicted Wounds




Dan Wertenberg

Business owners all seem to be very busy and over-worked. For most of them, the reason is that most of what they are doing is just creating more things that have to be done, instead of making the business more successful.

Want more time to relax? Stop trying to fix everything.

Dan Wertenberg
Serial CEO and Vistage Speaker
(Paraphrased.)

 


 

The human immune system is a wondrous mechanism. It detects and destroys invading bacteria, viruses, and debris. It is vigilant 24×7 and extends into every tiny and obscure part of our body. Our immune system is adaptable to changing threats because it learns from and emerges stronger from many infections. A fantastic model for an executive to learn from as she designs monitoring and control systems in a business.

The immune system has a flaw that may also be instructive for managers. It can (more…)