Years ago I worked with “Craig,” who, as vice president of engineering, managed a large organization that was responsible for research and development of a complex hardware/software product; a product that required a varied mix of skills, including hardware, software, quality, systems, etc.

Craig was the second best manager I ever worked with.

His people trusted him, knew he was completely fair and wouldn’t tolerate politics.

He understood culture, building teams and was expert at hiring people who would thrive in the environment he provided.

His boss, peers, subordinates and everyone with whom he interfaced including vendors considered him extremely competent—which he was.

And therein lay the problem.

For those who didn’t know him well the competence came over as arrogance, because Craig was missing one very important capability.

Craig was missing empathy.

He handled this by adopting a professorial style where emotion wasn’t required, which worked well in long-term situations, but not short-term ones.

Short-term acquaintances found him arrogant—except for those who really were arrogant. They noticed nothing different from themselves, but Craig saw them as arrogant.

We talked about it once and Craig explained that he had always been cerebral, never emotional, even in his personal life.

I asked him if he was Vulcan.

As to the absolute best executive, he had everything Craig had plus empathy. (More about him next Tuesday.)

Flickr image credit: Kevin

Are you familiar with the saying “let the punishment fit the crime?”

It’s a valid approach, but it’s just as true that the reward should fit the action.

A friend of mine works for a Fortune 1000 company in a tech support role. He’s well respected lead tech in his group.

Last year he developed an idea on his own time and gave it to his company.

As a result, he was flown to annual dinner and presented with an award and a $5000 bonus.

Sound impressive?

His idea will save his company $5 million or more each year.

Still impressed?

My friend isn’t.

He has a friend who is very impressed, but that’s because his company doe nothing; no recognition whatsoever.

My friend feels that a $5K reward for saving the company $5M or more every year, while being better than nothing, is still just short of an insult.

Other than being disappointed what’s the fallout?

He likes his job and his boss, so he’s not planning on leaving, but…

He has another idea that he’s not going to bother developing.

He’s still one of the most productive people they have, but that extra edge is gone.

What do you think his employer should have done?

Join me tomorrow for another look at how, to quote another old saying, companies keep cutting off their noses to spite their faces.

Stock.xchng image credit: dinny

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

I hear a lot from founders about the importance of fairness.

But when it comes down to unfair actions, mostly what I hear are all the reasons that “this is different,” AKA, rationalizations.

There are very few attitudes that qualify as universal truths, but this is one of them, so if you truly want to build a winning company, make this your mantra:

There is never an acceptable reason to treat anyone (employees, customers, investors) unfairly.

How do you know when you’re being unfair?

You know, whether you admit it to another living being or not, deep down you know when you are being unfair.

You can ignore your actions and the comments they incite; practice extreme awareness avoidance regarding your reasons, rationalize them as necessary, but you know.

The solution is simply to stop; no app, fancy action list, books to read, or research to do.

You know when you do it, so you’ll know when you stop.

Option Sanity™ ensures fairness

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process.  It’s so easy a CEO can do it.

Warning.

Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.” Use only as directed.

Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Image credit: Kevin Spencer

Sunday I quoted Colin Powell on this subject and it reminded me of this article. I don’t remember where it was originally used, but it dates back to the dot-bomb recession.

It’s “And” Not “Because”

Last week I attended a quasi-social business function and found myself in conversation with a very knowledgeable and polished executive. When I asked him what he did he said, “I’m not working, I’m looking for my next opportunity.” His answer floored me and I asked again. His initial reaction was to repeat himself, assuming that I hadn’t heard him (it was noisy), but my continued look of inquiry finally brought a second answer, “I’m a CFO.”

It’s sad enough that people choose to define themselves based upon how they earn a living, and very bad when, as in the conversation mentioned above, employment becomes the career validation without which the career ceases to exist. However it’s much worse when people take another step and subconsciously merge their identity with that of their company—I call it ego-merge.

I coined the term in the eighties to describe a state of mind that is not only unhealthy for individuals, but also damaging to the companies for which they work.

Ego-merge is the result of melding “me” and “my company” in the mind of the employee, whether worker or manager. It’s most obvious in tough times and most noticeable in conversation when people use “because” instead of “and,” thereby crediting the company or manager for their skills: “I’m great because my company/manager is great.” instead of, “I’m great and my company/manager is great.”

At first glance ego-merge might actually seem to be a positive for companies, but it’s not. When employees’ egos merge with their company’s, they often blame themselves for the company’s problems even when they have little power and may not have any line responsibility. Worse, it can be a major productivity sapper when times are tough—employees with ego-merge have a difficult time believing that they are good enough to help turn the company around, since in their minds their skills are good because of the company.

Ego-merge is often the by-product of the best companies/managers, where people are very involved, have high esprit de corps, and are passionate about their mission and success. It also happens with more Machiavellian managers who try and foster this attitude within their organization as a retention tool. Ego-merge does, in fact, encourage people to stay, but it also cripples them and reduces their long term value to the company.

It’s every company’s/manager’s responsibility to help their people grow and become stronger, not to subtly cripple them in the hopes that they won’t leave. Better, it’s in both the manager’s and the company’s best interest to become people-builders.

Why? Because reputation, both the manager’s and the company’s, is everything when hiring, and being known for your great G&S (grow and strengthen) policies will help you attract, develop and keep the best and brightest. Sure, you’ll lose them now and then when they’re ready for the next challenge and you can’t provide it, but the benefits resulting from their ultra-high productivity and creativeness during the time they’re with you will far outweigh the loss when they do leave.

How? Through some simple actions. G&S isn’t rocket science, nor does it have to be costly.

1. Treat everyone on your team and in your company with the same level of respect you want.
2. Listen to your people. Encourage and assist them as much as possible in developing the skills they need to take their next step—even when it makes your life a bit more difficult.
3. Always remind them that for all their successes, challenges, and failures it’s “and” not “because.”

But what if you’re a manager pushing G&S down while your own manager is either blind to it or the type who sees ego-merge as a plus? What can you do as just a worker with no control or leverage?

Awareness is the best protection against ego-merge. Recognize that it exists, understand what it is, know its symptoms and whether you’re prone to it, then monitor yourself, always remembering that the opposite of ego-merge is not arrogance.

1. Post a watch for the first symptom of ego-merge: when your glow of accomplishment for an exemplary project you did is quickly quenched by negative internal news or media coverage. The greater the offset the greater the ego-merge.
2. Listen to yourself. When describing a project (successful or not) or coup (large or small), listen to how you describe it and where and how you attribute its success or failure. Adjust accordingly.
3. Offset and reduce ego-merge in others by publicly giving full credit to those around you at all levels up and down for their contributions.

Flickr photo credit to: Svadilfari on flickr

I’ve worked with startups for many years, first as a headhunter and later as a coach. My company is in the process of launching Option Sanity™, an incentive stock allocation system based on founder/company values.

People join startups for many reasons and one is the possibility of substantial financial rewards; they take a sizable risk that only pays off if the company is acquired or goes public.

But what of the gigantic payouts public companies are giving execs who took no real risk and whose actions aren’t actualy responsible for the stock price.

Stock granted when the market is down, as it is in any recession, goes up no matter what management does or does not do. Yes, management skill can drive it higher, but, as the old saying goes, a rising market lifts all boats and that is whether the skipper has a clue or not.

This recession is no different; in fact the payouts are going to dwarf anything seen previously. They may not equal the obscene bonuses paid by Wall Street, but they are pretty obscene in their own right.

An Associated Press analysis of companies in the Standard & Poor’s 500 index shows that 85 percent of the stock options given to CEOs last year are now worth more than they were on the day they were granted. For some the value jumped by a factor of 10 or more. An Associated Press analysis of companies in the Standard & Poor’s 500 index shows that 85 percent of the stock options given to CEOs last year are now worth more than they were on the day they were granted. For some the value jumped by a factor of 10 or more.

I’ve never met workers who thought they should earn what their bosses earned, but they do what they hear in the news to make sense when measured against the company’s success.

I doubt anyone inside or outside of Apple has ever questioned Steve Jobs’ value when they hear about his compensation.

Carol Bartz received $47.2 million in 2009, 90% from stock options that went up primarily because the market did.

I wonder how motivated Yahoo employees are knowing that.

How motivated would you be?

Flickr photo credit to: Svadilfari on flickr

Did you know that as nimble as an ordinary bat is when flying it can’t take off from a level place?
If it is placed on the floor or flat ground, all it can do is shuffle about helplessly and painfully until it reaches some slight elevation from which it can throw itself into the air. Then it takes off like a flash.

That’s also a good description of what happens to workers who aren’t given what they need to succeed.

Whether it’s coherent instructions, correct and complete information, additional training, viable feedback, or something else, without it they struggle to survive, let alone thrive.

If you want your people to perform and succeed then it’s your responsibility to provide the slight elevation from which they can launch themselves.

Identifying and providing that slight elevation is your responsibility, whether you consider yourself a leader or a manager.

That small height isn’t one-size-fits-all nor is it necessarily what works for you, which means you need to learn through interaction and discussion what constitutes a feasible elevation for each individual and provide it.

That’s your job, whether you are a CEO, team leader or anything in-between, that is what you are paid to do.

So if doing it doesn’t float your boat and give you an adrenalin rush every time someone takes off you’re in the wrong position. You may like the paycheck, but you’re leaving your people to shuffle in circles and setting them up to fail.

And doing so will come back and bite you at some point.

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Image credit:  ZedBee|Zoë Power on flickr

Last Monday we discussed some of the ridiculous reasons that managers use to excuse their lack of fairness and Tuesday we covered what most employees actually mean by ‘fair’.

The main focus was on compensation and that doesn’t begin to cover it.

Unfair treatment from pay to perks to training to strokes to any form of attention will create problems.

Note: I didn’t say ‘might’ or ‘may’ cause problems, but will cause them.

Not just engagement, motivation and retention problems, but also problems with creativity, innovation, initiative (AKA leadership) and especially trust—there won’t be any.

So let’s be clear.

There is no acceptable reason to treat any of your people unfairly.

How do you know that you are being unfair?

I have never met or heard of any managers who didn’t know deep down that they were being unfair.

They may ignore their actions and practice extreme awareness avoidance regarding their reasons, but they know.

The solution is simply to stop; there is no fancy action list; no books to read, no research to do.

You know when you do it, so you’ll know when you stop.

Simple—yes; easy—no. But it has to be done if you want your team to excel.

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Image credit: HikingArtist on flickr

Yesterday I told you how monkeys lose productivity when treated unfairly.

Unlike the managers I described in that post, good managers know that unequal pay, but they also know that it’s not just a matter of title/grade.

Not everyone with the same title deserves the same compensation—in fact, to do so would be extremely unfair!

Most companies establish a range for each job and some guidelines within each range, but the guides frequently fall short of what’s needed in the real world.

How do you draw the lines to achieve fairness?

You might think that ‘fair’ is some kind of universal one-size-fits-all yardstick, but all the people I’ve talked with over the years define ‘fair’ relative to themselves and those around them.

Developers working in a small local company didn’t compare their salaries to the developers in IBM, nor to their bosses. They compared them to their peers, i.e., similar job, experience, background, company, industry, location and, lastly, title.

Workers are well aware that every position has a salary range; what they want is for their level within that range to make sense.

The problems arise when the person they sit next to gets X more dollars or a promotion for reasons such as those mentioned yesterday, reasons having nothing to do with skill, experience, attitude or actual work.

This is the critical knowledge that helps you develop working guidelines for your company’s ranges.

Let’s say that ABC Corporation uses a three-level structure in engineering: engineer I, engineer II, and senior engineer and that there’s a $20K range within each level. They currently have five people who are Engineer II. The salary range is $60K – $80K. Of the current people:

• Judy was recently promoted and is at $62K;
• Jim, $68K, and Craig, $72K, both have been working for six years. Although Jim has an MBA, he started in sales engineering while Craig had three years’ experience in a specifically needed skill when he was hired.
• Tracy is making mid-seventies with five years of direct experience; and
• Kim, at $80K and due for promotion, has a Masters’ and 17 years of experience, 5 of them in ABC’s field.

Although they’re all Engineer II, because the salary differences are based on factual points, not charm, politics, or managerial whim, the group is satisfied that they’re being treated fairly.

As usual, it’s not rocket science, it’s common sense—but I’m starting to think that common sense is rocket science these days.

But fairness is about more than just pay; please join me next Monday for further discussion.

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Image credit:  ZedBee|Zoë Power on flickr

As you may know, I coach with a focus on MAP—it’s effects, uses and how to enhance/change it—so I tend to collect articles and information that will help illustrate and/or drive home a critical point.

MAP is both timely and timeless with the same topics arising in successive generations of managers, so the past articles are often of just as much use now as when they were written.

Obvious as it may seem, fair treatment of employees is one of those things to which managers constantly make exceptions citing all sorts of ‘reasons’.

Years ago I read an article about a study by Sarah Brosnan.

Briefly, what Sarah did using capuchin monkeys working in pairs was to start by rewarding them equally with a slice of cucumber for performing a specific task, then rewarding one of the working pair with a grape instead (capuchins eat cucumbers, but love grapes). The results? The performance went from 95% success to 60%, but at least they still did the same amount of work. However, when one received the grape for doing less work, i.e., not performing the task at all, the success level dropped like a stone—all the way down to 20% for the cucumber crowd.

OK, back to the managers. Frequently, when I ask managers about a discrepancy in treatment, compensation, promotion, etc., what I often hear is along the lines of, “X and Y are equal with similar experience attitude, and duties, but…” and they finish the sentence with comments such as:

• “X should earn more because he’s supporting a family.”
• “X needs the promotion because her husband walked out on her.”
• “X just moved here and the housing is expensive!”
• “X is too short to be a manager.”
• “X and I went to the same school.”
• “X is cute.”
• “X reminds me of _________ so I will/won’t…”
• “I don’t like X.”

Enough! This list could go on all day, and it just gets sillier.

However, what never ceases to amaze me is that these managers see nothing wrong (let alone illegal) in their actions and expect either no repercussions or maybe some minor grumbling—or they just don’t care.

What they never seem to expect are significant drops in productivity, high levels of turnover (no matter the economy) and the occasional lawsuit.

In fact, most of them are shocked when something does happen, and harbor serious doubts as to whether the inequities actually have anything to do with it.

Of course, the most hilarious justification I hear is that “nobody will find out.”

You would not believe just how many line managers at all levels, not to mention HR people, actually believe that people don’t discuss their compensation/stock packages.

Some companies even have rules stating discussing it is not allowed and can be “cause for dismissal.” These aren’t old-line, dark ages managers I’m talking about, but enlightened, 21^st century, believe-in-empowerment types.

When will managers learn that secret compensation is right up there on the reality scale with Santa and the Tooth Fairy?

Being treated fairly has always been at or very near the top of people’s wish list. The only real change in the last thousand-or-so years is that it’s moving from the wish list to the demand list.

Since I first read the article I’ve shared it with managers who don’t have a clue; I’ve even emailed it to some of them, but it doesn’t always work.

In fact, the result can be hilarious. Once, when I was at my wit’s end, I sat down with the densest manager I ever worked with and we went through it together.

After discussing it in detail looked at me like I was nuts and said, “So what? I hire people, not monkeys.”

I kid you not!

Please join me tomorrow for a look at what ‘fair’ really means.

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Image credit: Ivan Mlinaric on flickr

There is a dangerous assumption out there that ‘leaders’ are chuck full of positive traits and on the side of the angels, but I’m here to tell you that it ain’t necessarily so. Just as leaders come in all shapes, colors and sizes they come with a wide variety of traits, not all of them positive. But it seems as if succession is tough all over.

Italian police have caught the Sicilian Mafia’s number two, the latest in a string of top-level arrests that has given the crime group that once terrified Italy problems with rebuilding its leadership.

The hero CEO who will save the company easily morphs into the imperial CEO. An intelligent, thoughtful opinion piece by Ho Kwon Ping in Singapore considers the dangers of this happening and assumes it will continue in the US—and it probably will.

The leadership of any company is critical to the success of its mission — but no one individual is mission-critical.

Yesterday I wrote Real Leaders are Fair, which means applying rules equally, but that rarely happens, especially when a government is involved and ours is no different. Consider the non-application of a federal law backed by a presidential proclamation that prohibits corrupt foreign officials and their families from receiving American visas. But business interests always seem to trump fairness.

“Of course it’s because of oil,” said John Bennett, the United States ambassador to Equatorial Guinea from 1991 to 1994, adding that Washington has turned a blind eye to the Obiangs’ corruption and repression because of its dependence on the country for natural resources. He noted that officials of Zimbabwe are barred from the United States.

Finally, on a lighter note, I found the answer given by Ask the Coach to this question to be classic.

Q: I am having a difficult time leading my team. The team members will not follow my instructions, which I am sure would make our project much more successful. What am I doing wrong?

A: What you’re doing wrong is very simple: you have simply forgotten that your team is more critical to the success of your project than you are.

Take a moment and read the whole post, I guarantee you’ll like what you learn.

And if you want more of my picks you’ll find them here.

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Image credit: nono farahshila on flickr