Published in CEO-IQ, Volume 4, Jan-Feb2004

Coaching is the art of helping people identify and achieve their goals. Generally a coaching relationship exists between two people, the coach and the client. Working under the guidance of the coach they team up as thinking partners to identify the client’s personal and professional goals. Most coaching models will then focus on identifying behaviors to help the client achieve these goals while eliminating those behaviors that create obstacles or barriers to success.

Though a client’s subordinates and peers may be well–intentioned, many of them have agendas of their own when addressing the client’s issues, challenges, and concerns (e.g. staying in the boss’s good graces). A professional coach provides the client with objective feedback, drawing from education, and personal experience along with the experience gained from coaching other clients.

Coaching is not consulting. A good coach always asks pointed questions, and only rarely gives advice. This method creates true learning and growth for the client as new solutions and options come from insights that are uniquely their own. There are other distinct and equally important differences in coaching versus consulting.

• Consultants are often paid to deliver one thing, advice. A good coach is with you, as a thinking partner over the long haul.
• Consultants are usually told what the problem is and hired to fix it. A coach is often told there is a problem and hired to help the executive identify the problem then serve as a guide to successful execution the steps to eliminate the problem.
• Consultants are generally not invested in your outcome. A coach’s outcome is synonymous with yours.
• Consultants are prescriptive. In contrast, coaches are discovering solutions alongside you.
• Consultants generally give you advice that works for others. Coaches generally help you discover solutions appropriate for you.
• Consultants are paid to shape the company. Coaches are paid to improve personal performance, making company success a natural by-product.

When properly coached, a client sees clear objectives, and is held accountable by the coach to initiate and sustain the actions necessary to succeed. Look for my follow–up article entitled “Are You Coachable?”

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

FOCUS is one of those concepts that is very easy to talk about and very hard to apply. This report provides practical, actionable steps you can take to sharpen your focus.

The Power of Focus

Consider two sources of energy: the sun and a laser. The sun is a powerful source of energy. It showers the earth with billions of kilowatts of energy every hour. Yet, with a hat and some sunscreen you can bask in the sunlight for hours with little negative effects. On the other hand, a laser is a weak source of energy. A laser takes a few watts of energy and focuses them in a cohesive stream of light. But with a laser, you can drill a hole in a diamond or defeat a cancer. That’s the power of focus! It works the same for individual and team performance. A crystal clear focus requires less input (energy) to yield greater output (results).

If a clear focus is so powerful, why do so many leaders struggle with diffused efforts toward their goals? Today’s competitive, change-intensive, information-loaded business world offers so many distractions, that it is hard to stay focused on our goals. These distractions themselves may not hinder your success, but the energy they steal from you can quickly derail success. I recently read this on a poster, “When winds of change blow hard enough, even the most trivial of objects can become deadly projectiles.”

These “winds of change” often hurl leaders into the “Ship is Adrift” syndrome. There are three levels of this syndrome:

Organization Level – Have you ever heard a good brain surgeon say, “Hey, I have this brain surgery gig down pretty well. Let me see if I can break into heart, lung or liver surgery and become a general surgeon?” Of course this does not happen in medicine, but it often occurs in business.

Team Level – Your team goes adrift when they have unclear goals, priorities and roles.

Individual Level - Individuals go adrift when they do not have the opportunity to apply the highest and best use of their skills. Just as a land developer strives for the highest and best use of land, leaders have to ensure their return on human investment by ensuring the highest and best use of their people. Within the recent rash of downsizings of the past few years, many survivors in companies are currently under-employed.

Your team’s focus starts with YOU. Your actions have ripple effects throughout your team and organization that reach farther than you would ever imagine.

Success Factors

There are three success factors for leaders who are able to sharpen their focus:

• Find your One Thing.
• Know when to say “No.”
• Keep it Simple.

1. Find your One Thing.

A clear leadership focus (and the resulting organizational focus) is a common theme for the most successful teams. Therefore, define the One Thing you will focus on to drive results.

A laser-sharp focus does not happen overnight. It takes time and effort to reinforce and refine it. Do not be too quick to find your One Thing. It crystallizes over time. In fact, for the most successful companies, it took several years to refine their One Thing. It can seem counter-intuitive that defining your One Thing typically broadens your opportunities rather than narrowing them. For example, Honda’s One Thing is to “make the best engine in the world.” This opens up a world of opportunity for them to place their engines in lawn mowers, cars, scooters, motorcycles, etc. Also, consider Disney whose One Thing is to “make dreams come true.” This obviously opens a world of venues to deliver their One Thing.

What are you passionate about?
What can you be the very best at?
What is your financial common denominator?
Your team’s One Thing might be: building leading edge products; creating relationships that customers just can’t walk away from; making the world a cleaner, more efficient or friendlier place; creating defect-free products or providing the fastest service available. These are just examples – your One Thing has to beyour One Thing. It should guide all your decisions and actions.

2. Know when to say “No.”

If you try to be everything to everybody, you will be nothing to nobody. Your time, energy and money are precious resources – if you spend them in one area, they are not available to be spent in another area. In other words, saying “Yes” to one thing always means saying “No” to something else. A clearly defined One Thing makes it easier to say No to non-value-added tasks and stay focused on your goal.

By not saying “No” to tasks that diffuse your focus, you can quickly find yourself drifting off course. The farther you drift off course, the more time, money and energy will be required to get you back on track. Here is a quick illustration.

One day, an expert in time management was speaking to a group of business students and, to drive home a point, used an illustration those students will never forget. As he stood in front of the group of high-powered overachievers, he said, “Okay, time for a quiz,” and he pulled out a one-gallon, wide-mouth mason jar and set it on the table in front of him. He also produced about a dozen fish-sized rocks and carefully placed them, one at a time, into the jar. When the jar was filled to the top and no more rocks would fit inside, he asked, “Is this jar full?”

Everyone in the class yelled, “Yes.” The time management expert replied, “Really?” He reached under the table and pulled out a bucket of gravel. He dumped some gravel in and shook the jar causing pieces of gravel to work themselves down into the spaces between the big rocks. He then asked the group once more, “Is the jar full?”

By this time the class was on to him. “Probably not,” one of them answered. “Good!” he replied. He reached under the table and brought out a bucket of sand. He started dumping the sand in the jar and it went into all of the spaces left between the rocks and the gravel. Once more he asked the question, “Is this jar full?”

“No!” the class shouted. Once again he said, “Good.” Then he grabbed a pitcher of water and began to pour it in until the jar was filled to the brim. Then he looked at the class and asked, “What is the point of this illustration?”

One eager beaver raised his hand and said, “The point is, no matter how full your schedule is, if you try really hard you can always fit some more things in it!” “No,” the speaker replied, “that’s not the point. The truth this illustration teaches us is:

If you don’t put the big rocks in first, you’ll never get them in at all.”

What are the ‘big rocks’ for you and your team? Say “Yes” to your big rocks (One Thing) first and you will say “Yes” to success!

3. Keep it simple.

C.W. Cerum said, “Genius is the ability to reduce the complicated to the simple.”

Keeping things simple for your team helps them stay focused on your One Thing. For example, a study of 39 mid-sized companies found that only onecharacteristic differentiated the winners from the less successful companies: simplicity. Winners sold fewer products, had fewer customers and worked with fewer suppliers than other companies in the same industry that were less profitable. This study found that simple, focused operations were more profitable.

The 80/20 Principle (also known as the Pareto Principle) helps explain the power of simplicity. The 80/20 Principle is alive and well in most businesses:

• 80% of profits come from 20% of customers.
• 80% of problems are generated by 20% of employees.
• 80% of sales are generated by 20% of sales people.

The question is, how do you decrease complexity? The answer is focus on your best 20%. Don’t just rely on your gut to identify your 80/20 rule. Use data to determine the truth about your team’s performance. Look at your processes, systems, services and people and find the 20% of them (your “vital few”) that drive the majority of your productivity, activity, waste, conflicts or down time.

Keeping it simple, keeps you focused!

Prepare for the Sharpening

A lunar voyage is about ¼ million miles to the moon and then back – that’s a 500,000-mile voyage. More energy is spent in the first few seconds and miles of that voyage than in the remaining half million miles and several days. The gravitational pull of first few miles is tremendous (probably a lot like pulling my son away from the T.V. on Saturday morning!). It takes an internal thrust greater than gravity and the resistance of atmosphere to break out into orbit. BUT once it did break out, it took almost no power to perform the rest of the voyage. This is a powerful metaphor for describing what it takes to break out of old habits. It’s very uncomfortable and effortful at first, then once you build a new habit, it feels comfortable and effortless. First, you form your habits, then your habits form you.

Successful people have successful habits and they sacrifice today’s pleasure for tomorrow’s rewards. Your actions, not your intentions, tell the truth! We judgeourselves by our intentions, but others judge us by our actions. Thomas Edison, one of history’s most inventive and productive people, summed it up best years ago, “Genius? Nothing! Sticking to it is the genius.”

Remember, you don’t have to be great to get started, but you have to get started to be great.

Good luck hitting your targets!

Lee Colan
Senior Associate

As always, we welcome your comments. Join us on Facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Published in CEO-IQ, Volume 4, Jan-Feb 2004

In the last issue I discussed enhancing your bottom line by communicating five key messages to employees. In this issue, we’ll look at what to listen for to predict the future profitability of your company.

Every month, CEOs receive financial reports that convey important information such as how much was sold, how much was shipped, what the receivables look like, etc. – Necessary information to know. It clearly tells the CEO where his company has been. Are there any messages imbedded in the huge quantities of data crossing the CEO’s desk every week to tell him where his company is going? CEOs not only need to know how their organization has done, but should be listening for signals that indicate how it will perform in the next couple of quarters. If the CEO can predict negative trends before they show up in last month’s data, he can take corrective action and prevent them from occurring or at least significantly minimize their impact.

However, most organizations don’t willingly yield to such critical data. For the CEO to have early warning signals he can hear, he must build them in to the data gathering structure of his company. He does this with Key Performance Indicators (KPIs).

KPIs measure critical items that the CEO needs to know in advance to tell if his organization will meet its goals and objectives. KPIs are not the same for all companies, but every CEO has said to himself or herself at one time on another, “I wish I’d known about this a few months ago.”

Consider one critical example. In April, the head of a medium size firm was telling his board that everything was on track for meeting the goals for that year. Sales to date were right on target. Margins had slipped slightly. By November, he was telling his board that sales for the year would be eleven percent below the previous year and profits would be seventeen percent below plan. How did a situation that looked so promising become so disappointing? Had the CEO built into his reporting system KPIs for the number of bids, proposals, or quotes sent out per week and the margin on every order booked, he would have heard the message loud and clear.

While sales were still on track in April and May, his KPI for bids would have told him the number of sales opportunities was dropping off. In June and July his margin KPI would have shown that to win the sale, the final pricing on orders from the earlier bids was losing margin. In both cases he could have taken action to prevent telling his board in November that he would fall short of the plan. Better yet, he could have taken steps to reduce the failing performance levels. Build KPIs into your reporting system to ensure you know what you need to know in time to do something about it.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Published in CEO-IQ, Volume 6, May-June 2004

Business research has shown over and over again that even companies with a written business plan have failed when there has been poor execution of that plan.

How do you tell if a company is not executing well? Just compare what is promised with what is delivered, internally and externally. Compare what the leadership of the company envisions with what the company is actually accomplishing. Look at customer satisfaction, re-work, returns, aging inventory, decreasing gross margins and the bottom line.

Execution is what gets the job done, whatever it is. Execution is not strategy nor is it tactics. According to Larry Bossidy in his book, Execution, it “is a defined set of behaviors and techniques that companies need to master in order to have competitive advantage.” This requires discipline to follow a system, i.e. a process of thoroughly discussing what the company is experiencing in all areas, then closely examining how things are done. It means questioning without mercy the who, what, when, where, and why of areas determined to be executing poorly, i.e. exposing reality and taking action. It demands following through and following up on the follow-through to ensure that what has been planned is still on track.

If the leader does not have a detailed understanding of his business, the people he employs, and the environment, he cannot execute well. Many executives regard detail work as beneath their dignity. Nothing could be farther from the truth. Execution is a business leader’s most important job. The inability to identify and address execution issues is the greatest impediment to an organization’s success. It is the genesis of most disappointments that erroneously gets blamed on something or someone else. A leader/CEO does not have to “do the details” himself, just delegate them to competent staff. As the old saying goes, “The devil is in the details.” The leader who doesn’t inspect what he expects is letting details go unexamined and his organization’s ability to execute deteriorates.

All that is required for a company to execute well is for the CEO to have unrelenting passion for honesty about himself, his team members and his organization. Another way to say this is that you must have an intensely focused pursuit of reality and tie that to processes that constantly improve you, your teammates, and your organization. This kind of passionate focus will drive cultural change that will ensure the things CEOs usually watch i.e., sales, margins and profits are where they should be and the leader’s vision becomes reality.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Starting a company and nurturing its growth is as difficult as it is exhilarating. From the get-go, the entrepreneur is necessarily involved in everything. Consider just a short list of typical tasks: customers to identify, money to raise, employees to hire, vendors to procure, bank relationships to establish, infrastructure to build and on and on.

The leader of a new or growing business has a vision of where he or she wants the business to go and how he or she sees it getting there. But the devil is in the details.

Early stage business leaders — less than $20 million in sales — often find themselves too busy to succeed. The lure into this pool of quicksand is subtle. Like the frog splashing around in a slowly heating pan of water, an entrepreneur may enjoy his activity, until the situation becomes clear.

It is usually necessary and generally unavoidable that the founder be the primary if not the only decision-maker. After all, he is the one with the concept, the vision and control of the purse strings. At risk are his own resources and those of the early investors, typically referred to by venture capitalists as the three F’s: friends, family and fools.

Here is a cautionary tale about a software firm launched with the usual high energy and expectations. Let’s call the founder “Jim.” Jim focused on getting the first release of his new suite of programs installed at as many customer sites as possible. Instinctively, he knew what needed to be done and how to do it. Being single-minded, he expected his staff to execute the tasks just as he did. Why? Because Jim knew his way worked. He felt less vulnerable to negative surprises. Why take a chance on something else?

Of course, the staff didn’t instinctively do things his way, and Jim took back more and more of what he viewed as critical tasks. The downward spiral began. The more he did things himself, the less time he had to train his subordinates. Jim’s workload increased along with his need for staff members who could read his mind. Soon he found himself doing most everything. He seduced himself into being a manager rather than a leader. He did things right, but didn’t have time for doing the right things.

One day Jim woke up nearly burned out. Exhilaration of being continually busy with his firm, the adrenaline rush of crisis management and being the one who knows everything about everything had left him exhausted and his company stalled out. Without realizing it, he had trained his employees to let him do it all. For a while, they had used their own initiative, skills and abilities. But repeatedly their efforts were thwarted. Eventually, they just let Jim do it all. They kept taking home their paychecks, but Jim was doing the work.

Fortunately, this story has a happy ending. A friend and fellow chief executive had the savvy to ask Jim for a lunch appointment and made a few helpful suggestions. His gentle advice went something like this: “There are many ways to do something right, which makes delegation such a critical element of business success. If you are uncomfortable at first, start with a few noncritical tasks. That lets subordinates show some initiative, take responsibility and be held accountable for results.” Jim agreed to try it. After a few successes, he became increasingly comfortable allowing employees to do what they had originally been hired to do.

A few circumstances are important here. The company had been launched for some time. Authority and responsibility delegated now wouldn’t sink the company as they might have in its early days if a mistake was made. In time, Jim shed the need to make all decisions and do every important task. His stress level dropped as he communicated a clear vision of what he expected. He coached when necessary and then inspected what he expected.

His employees regained their energy, enthusiasm and creativity, and the company began to grow again. And this time more profitably. As a result of giving his employees a chance to show what they could do within appropriate guidelines, this entrepreneur’s life got easier and his employees grew in their responsibilities and accountability. Most importantly, the company grew and prospered as he had originally envisioned.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Published in CEO-IQ, Volume 6, May-June 2004

As an executive coach I have studied and used many methods to help develop executives into successful leaders. Some of the most compelling research about what makes leaders succeed deals with emotional intelligence (EI).

Emotional intelligence is a set of skills or competencies that influences one’s ability to cope with life’s demands and pressures. It includes the capacity to recognize feelings, to motivate and to manage emotions in both ourselves and others.

Research in this field has shown that developing emotional competencies, such as initiative, self-confidence and the ability to listen to others, can increase emotional intelligence and lead to a significantly positive impact on individual and group performance.

EI and Recruiting Superstar Employees
An analysis of more than 300 top-level executives from fifteen global companies showed that six emotional competencies distinguished stars from the average performers: Influence, Team Leadership, Organizational Awareness, Self-Confidence, Achievement, Drive and Leadership. (Spencer, L. M., Jr., 1997).

EI and Improving Productivity
After supervisors in a manufacturing plant received training in emotional competencies, lost-time accidents were reduced by 50 percent, formal grievances were reduced from an average of 15 per year to 3 per year, and the plant exceeded productivity goals by $250,000 (Pesuric & Byham, 1996).

EI and Outperforming Peers
In a large beverage firm, division leaders with emotional intelligence competencies outperformed their targets by 15 to 20 percent. – Those who lacked them under-performed by almost 20% (McClelland, 1999).

EI and Increasing Productivity
Optimism is another emotional competence that leads to increased productivity. New salesmen at MetLife who scored high on a test of “learned optimism” sold 37 percent more life insurance in their first two years than pessimists (Seligman, 1990).

EI and Improved Sales Results
Another EI competence, was linked to success for a retail chain. Store managers that were best able to handle stress had higher net profits, sales per square foot, sales per employee, and per dollar inventory investment (Lusch & Serpkeuci, 1990).

EI can be measured and learned. An executive that is determined, passionate and future-focused is more likely to improve their EI with the guidance of a mentor or coach.

By developing your emotional intelligence, as well as that of your executive staff, the overall performance of your company is substantively improved.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Published in CEO-IQ, Volume 3, September 2003

Two significant factors affecting a company’s bottom line are what the CEO communicates and how it is communicated.

Important to the success of any growing business is the CEO’s style of communicating with words and actions what is deemed to be most important. CEOs communicate in a myriad of ways: verbally, non-verbally, with action, non-action, and so on. Thoughtful CEOs will always be aware of their style of communication and the kind of messages their public is receiving from them.

The cardinal rule for CEOs is “Consider what your words and actions communicate.”" Do they reflect your corporate culture and demonstrate respect for your company’s value system? Do your words and actions make it clear that you value your employees and their suggestions?

If most of the organization can answer the following five simple questions without hesitation, you are communicating well and your company can avoid experiencing the confusion and employee dissatisfaction that erodes the company’s bottom line.

Why am I here? Employees need to know the company’s goals and understand what their contribution to those goals is.

What do my supervisor and teammates expect of me? Everyone should understand priorities (not just schedules and profits) and the factors for winning the big order or launching the new product, and their part in its achievement.

How am I performing? Employees must know how their work is measured or they will think it is not important enough to be measured.

If I am performing inadequately, where do I go for help? If they are having trouble learning a new skill or task, they need to be unafraid to ask for help.

What’s in it for me? This is not about money. Your employees need to feel their work is recognized and appreciated and that they are contributing to something significant.

Every year, billions of dollars across America either make it to the bottom line or are silently eroded, based on how much thought the CEO gives to communication. Clear communication is an easy way to enhance profits.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Published in CEO-IQ, Volume 5, Mar-Apr 2004

Plato said, “The beginning is the most important part of the work,” and so it is in business. How a new enterprise begins exerts significant influence on how it operates and ultimately how it ends. The majority of all privately held businesses that have made it successfully through the start-up phase are now busy growing. However, in the beginning they did not visualize and plan for the end. Thus, when the owner-entrepreneur reaches the stage in life where retirement is desirable, it will be out of reach. True, the founder imagined what life would be like when he or she sells the company, but did not design the initial business plan to ensure the company would achieve its full potential value in time for retirement.

A very important part of the work in the beginning is deciding how long the company will be run by the founder, when retirement will come and what a life of leisure will look like. This means that in addition to a plan for the business, the CEO needs to have a personal/family financial plan that is supported by the success of his company. In the college course I teach for entrepreneurs, I have yet to find anyone who has developed both plans and linked them together. Yet, they all expect their new enterprise to sustain them into old age.

Without a business plan that describes in financial terms the enterprise’s increasing value, when the time comes to collect on sweat equity, the valuation will not be sufficient to support the retirement lifestyle envisioned. Typically, the CEO stays meaningfully busy in his or her company, making money, sending kids to college, taking vacations, doing deals, and enjoying the ride. The missing ingredient that was not planned for in the beginning is what the company will be worth when the CEO/founder of the company is no longer there.

Planning is generally not what start-up founding CEOs most enjoy. Growing the business, finding new customers and creating new products are where they usually find enjoyment. If an exit strategy is built-in to the long-term plan, then when a buyer has an independent firm derive a valuation of the company, it will yield the price the owner had long ago calculated to meet the need for twenty years of retirement. Unfortunately, this is the exception rather than the rule. Usually, the verdict is that while the company has assets and a healthy cash flow, without the chief entrepreneur there, it is not worth half of what it could be to a new buyer.

Even if a CEO has been in business for a few years, it is not too late to marry his exit strategy to his personal financial plan. Mid-course corrections can be executed and he/she will have the comfort of knowing that when they are ready to “hang it up,” life will indeed be sweet. Once the plans are married, all they have to focus on is execution, which I’ll discuss in my next column.

As always, we welcome your comments. Join us on Facebook to share your experiences or email us at moreinfo@dynamicresults.com.

They say that two heads are better than one.

James Surowiecki, author of “The Wisdom of Crowds: Why the Many are Smarter than the Few and How Collective Wisdom Shapes Business, Economics, Societies and Nations,” goes even further.

He thinks that under the right circumstances, groups — from a handful of people to mass markets consisting of millions — are remarkably intelligent. In fact, he believes they’re often smarter than the smartest people in them.

This may come as a surprise to CEOs who struggle to get their management teams to reach consensus on a new product offering or the content and timing of a strategic plan. But in his superbly researched and highly entertaining book, Surowiecki makes a strong case for the power of the many outweighing the power of the one.

Consider the following example.

An Amazing “Guess”

In 1968, the U.S. submarine Scorpion disappeared in the North Atlantic. The search area, based on the sub’s last known position, covered an area 20 miles wide and thousands of feet deep.

The top naval brass planned to rely on a few submarine and ocean current experts to guide the search. However, a junior naval officer, John Craven, took a different approach. Craven created several different scenarios to account for the Scorpion’s disappearance and then gathered a diverse group — which included mathematicians and salvage experts as well as submarine specialists — to evaluate the scenarios.

Rather than have the team of experts work together (in fact, he insisted that team members not share information with each other), Craven asked each individual to speculate on a number of data points and then offer their best guess as to the location of the sub.

Craven compiled all the individual guesses and put together a composite scenario of how the Scorpion went down. Then, using a complex formula (called Baye’s theorem), he estimated the Scorpion’s final location. A few weeks later, a Navy ship located the ill-fated sub a mere 220 yards from the spot identified by Craven.
According to Surowiecki, none of the individual guesses even came close to the actual location. Yet, out of a 400-square mile radius, the group estimate came within two football fields of hitting the exact spot.

A lucky guess or a testament to the collective intelligence of crowds?
Surowiecki argues convincingly for the latter, giving example after example of how crowds — often without working together or sharing information — come up with better decisions and prove more adept at solving problems than any individual in the group.

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Smart Teams

Surowiecki believes that when four conditions exist, the collective wisdom of the group will almost always lead to better judgment and more accurate decisions.

These conditions include:

• Diversity of opinion. Each member of the group has some private information, even if it’s nothing more than their own interpretation of the known facts.
• Independence. Team members’ opinions are not determined or affected by the opinions of those around them.
• Decentralization. Members of the group are able to specialize and draw on local knowledge.
• Aggregation. Some kind of mechanism exists for turning private judgments into collective decision.

When a group satisfies these four criteria, suggests the author, more often than not it will outperform even the brightest individuals on the team.

Moreover, groups don’t need extremely intelligent leaders to be smart. Even when individuals in the group are not especially well-informed or rational, the group can still reach a collectively wise decision.

The Dangers of Group Think

Does this mean the collective wisdom of the group will always outperform individual effort?

Of course not, acknowledges Surowiecki. One only has to look at the Columbia space shuttle disaster, the Ford Edsel, the Bay of Pigs and numerous other political and corporate failures to realize that groups have no stranglehold on infallibility. In fact, a phenomenon called “group think” frequently leads groups to trip over themselves in a headlong rush to disaster.

According to the author, group think occurs when groups — especially small ones — lose their diversity and take on an identity of their own. Rather than a collection of individuals operating independently, group members begin to exert real influence on each other’s decisions and judgment, causing them to fall prey to problems like:

• Emphasizing consensus over dissent
• Making snap judgments before gathering all the information
• Allowing personal biases to prevent people from asking the right questions and/or gathering more information
• Unconsciously seeking information that confirms preconceived notions
• Starting with a pre-conceived conclusion and working backward rather than gathering all evidence and seeing what conclusion presents itself
• Re-interpreting information to fit the preconceived conclusion

The problem with group think is not so much that it discourages dissent, argues Surowiecki, but that it ignores it and/or makes it seem improbable. And as small, homogenous groups (i.e., corporate boards and management teams) become more so, they become more insulated from outside opinions and therefore more convinced that their judgment must be right.

The solution?

When setting up a team tasked with solving problems or making critical decisions, make sure the key elements — diversity, independence, decentralization and aggregation — are present and accounted for. If you can’t have all four, at least strive for as much diversity as possible.

Diversity not only enables the presence of different perspectives, it also makes it easier for individuals to say what they really think. This, in turn, enables the group to make decisions based on facts, rather than allegiance, authority or influence. Even when the minority viewpoint is ill-conceived, suggests the author, its presence forces the group to take a more rigorous and balanced approach to the decision-making process.

Ultimately, argues Surowiecki, the confrontation with a minority view forces the majority to interrogate its own positions more thoroughly and carefully — a process that needs to happen far more often in the boardrooms of corporate America.

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Million-Dollar Questions

Expansive in scope, Surowiecki’s engaging book covers far more than the nature and makeup of smart teams.

Starting at the 40,000-foot level and working his way down, the author answers a wide variety of questions that affect businesses, economies and societies, such as:

• If mass markets are smarter than individuals, why do stock market bubbles happen?
• Why do most people pay taxes, even if they think they’re paying more than their fair share?
• Why do movie theaters charge the same price for terrible movies as for great ones?
• What role has trust played in the evolution of capitalism?
• Why do the major television networks continue to do ratings sweeps, at a cost of billions of dollars, when they do a poor job of measuring who watches what?
• Why don’t we have more toll roads in the U.S. to alleviate rush-hour traffic?

“The Wisdom of Crowds” isn’t your typical flavor-of-the-month business or management book. Nor does it offer a checklist of action items to help you empower your employees, add value to customers or increase your bottom line.

Instead, it provides a compelling look at how groups, both large and small, go about the critical process of solving problems and making decisions. By illuminating how we operate in groups, the author teaches important lessons about how we go about running our businesses and conducting our lives.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.

Published in CEO-IQ, Volume 5, Mar-Apr 2004

Tiger Woods, Michael Jordan, IBM, and most any “high achievers” combine their natural talent with sound coaching and persistent practice. Good coaching helps you take wherever or whoever you are to the next level. Even the best often need to re-invent themselves to stay ahead.

Writer, speaker and pastor Chuck Swindoll tells a story about famed Dallas Cowboy’s Coach Tom Landry. At a meeting they both attended, Landry was asked how he was able to forge a team out of individuals so that they would win, something he managed to do every year for twenty-nine years. He paused for a moment and then said, “My job is to get men to do what they don’t want to do in order to achieve what they’ve always wanted to achieve.” For those men it was the victory of the Super Bowl. What they didn’t want to do was the grueling training it would take to get there. Swindoll concludes,

“Achieving anything takes discipline, clear goals and definable action plans. A good coach will help the team achieve its goal by outlining the exercises and motivating the players to stick to the plan. Facilitating and encouraging discipline in order to win—that’s what coaching is all about.”

Having a great coach is only half of the equation. I am sure Landry carefully chose his team members. Similarly, when asked to coach an executive, the first thing I examine is whether this person is “coachable.” Rather than waste a company’s money and an executive’s time, I would rather have the dialog right up front. In fact, it is often the first question I ask, “Are you coachable?” And from there we get into an honest and revealing conversation.

So if you are looking for the right coach for you or your executives, be sure to spend equal time determining the readiness and openness of the individual. Take this quick assessment:

The best candidates exhibit the following attributes:

Courage: You are willing to try new approaches that may be outside of your established “comfort zone”. Simply put, you must be willing to experience a little pain in order to grow.

Trusting: Your coaching experience is greatly affected by your ability to keep your word as well as your willingness to take a “leap of faith” and trust your coach. Trust is usually exhibited by sharing something that made you feel at risk.

Flexibility: You are not only interested in new ideas, you are actively seeking them. You actively solicit the opinions and ideas of others.

Honest: Without honesty the process fails. You must be willing to present “whole” issues, including your contribution to a challenge so that a coach is working with all the facts.

Desire: Are you a highly successful individual who has hit a rut? Success tends to bring complacency (if it ‘aint broke, why fix it). Good candidates want to find new ways of seeing things. Are you willing to engage your imagination to envision what things might be like, without perceived limitations?

Listening: You are not coming to the coaching table to persuade. You are coming to discover new ways of viewing existing perceptions. This takes a degree of openness that does not come naturally to all leaders. I usually ask clients to repeat back what they heard me say not as a test of the words, but to observe their ability to capture the “essence” of what people say to them.

Accountability: Most leaders are great at holding others accountable. A good coaching candidate WANTS to be accountable to the coach for doing what they have both discovered is best. Will you jump right into discovering why you are not sticking to agreements, or even openly discuss what behaviors you have that may be creating barriers or obstacles for yourself?

The coaching clients that achieve the greatest success want an objective thinking partner to help them reach the next performance level. They leverage their coaching relationship to discover approaches and possibilities that they would not have been likely to discover alone. I see them as business partners, and our business is always good when they are achieving their goals.

As always, we welcome your comments. Join us on facebook to share your experiences or email us at moreinfo@dynamicresults.com.