One of the best parts of being a business advisor is that I get to ‘see inside’ the business of my clients.  My client base is quite diverse, with clients in many different industries and locales.  One common thread: they have people problems, and they’ve tried to solve them in a variety of ways - to no avail – before contacting me.  Here are FIVE LESSONS I learned from clients in 2011.  I hope they help you overcome challenges and succeed in 2012. 

 LESSON ONE: People are the ‘black box’ in most organizations.  

 I deal primarily with the people, as opposed to the operations or the financials or the machinery or the technology of the organization.  And PEOPLE, not that other stuff that other advisors work with , are the key ingredient of any organization – small, mid-sized or gigantic; for profit or non-profit. 

When you get right down to it, the majority of business owners and managers don’t really understand what makes their best people tick.  They say they do, but they really don’t. 

Most organizations accept a certain level of dysfunction as ‘normal’, like “X% of turnover is just part of doing business!”  If you ask them to identify the specific differences between their top and bottom performers, most managers talk around it, but it always comes down to actual results.  So, let me see if I understand this correctly.  In order to tell if someone will be right in the job, we need to see if they will sink or swim, right?  So, failure is built right into the system.  Along with low performance, turnover cost and opportunity loss.  Hmmm.  Is it just me, or does this seem absurd?

Forgive my lack of diplomacy here, but I would describe the average Six-Step Hiring Process of these organizations as: 1) hire a bunch of people who we’ve interviewed and really think can do the job, 2) train ‘em, send ‘em out into the workplace and inflict them onto co-workers and customers, 3) after a certain period, tell your managers 4) to keep the ones who can do the job, or 5) to fire those who can’t do the job, and 6) repeat the process, over and over.

The good news is there IS a better way.  But there is usually a cost, and it will require doing things differently.  And it will mean that certain people in key positions of leadership will need to admit that they could do some things better, that they don’t have all the answers and that change – even for them – is good.  After a decade or two of paying change management consultants without much of a positive change, perhaps it’s time to pay attention to your people – your most important asset. 

LESSON TWO: The “A-word’ and ‘D-word’ are critical to your organization’s success.

No, these are not curse words.  But to some who hold roles of responsibility and leadership in organizations, they are bitter in the mouth, and close to unspeakable.  The ‘A-word’ is ACCOUNTABILITY and the ‘D-word’ is DISCIPLINE.

I am consistently amazed at the vague and non-specific job descriptions that are used by organizations.  Even top national organizations.  They describe motivational, warm and fuzzy things, and identify ‘deliverables’ and other things, but they so often miss the mark.  This puts the unfortunate employee in the position of trying very hard to deliver what is undefined for a company or manager that is not capable of clearly defining what is expected from the employee.  At these organizations, things are ‘fine’ until they’re not ‘fine.’  Then we have a difficult performance review, and much unpleasantness.

Perhaps this is why ~50% of currently employed people are dis-satisfied in their current job, and would consider taking another job of equal pay and benefits.  How can I give you ‘just right’ if I don’t know exactly what that looks like?

So, the lesson here is to first define what every employee – from top to bottom – is supposed to do.  And then, to measure their performance against that definition on a regular basis.  And then to hold each individual accountable to perform to those standards.   And then – this is the hard part – to be willing to either reward success or punish failure.   That means that some of the people who work at your organization will either be getting raises…or finding employment elsewhere…based upon their performance.

But wait, didn’t I just say in Lesson One that you shouldn’t just hire and fire people if they don’t perform?  Yes.

Here is the difference, my friends.  The organizations in Lesson One lack the kind of hiring or placement process which uses the best methods and technology to put the right/best people in the right jobs for all the right reasons.  They haven’t clearly defined the jobs and the expectations for those who perform those jobs.   How can I reasonably expect most people to succeed in this hit-or-miss system?

The organizations in Lesson Two hire and place the right/best people in jobs for the right reasons, and exercise accountability and discipline in their culture and all of their processes.  As an employee, I know what is required for success; I am able to deliver it because I have been given the tools, training and opportunity; and I can do what is necessary to succeed.  I know that my performance - if it is better than someone else’s - will be rewarded at a higher level at that other person’s.   People expect to succeed in this type of system, and require little or no motivation or ‘management.’   Slacking is easily identified and is not tolerated.  People who don’t like the rules tend to go away, all by themselves.  It’s WAY more fun to work at an organization like this, too. 

LESSON THREE: You must have a plan and clearly defined goals.    

There are two old sayings which apply here: 1) ‘In the land of the blind, the one-eyed man is king’, and 2) ‘If you don’t know where you’re going, any road will get you there.’

Most organizations expect high performance from their people.   Yet a significant percentage of them have no specific plan for their people to follow, and no goals or objectives against which their people can be measured.   Leaders of these organizations usually have plausible, well-reasoned excuses for why they don’t have a plan and clearly defined goals, such as:

• It’s too hard to predict the future in this challenging economy, so we just take things as they come
• Things change so rapidly in our industry that we haven’t been able to identify our goals, so we just take things as they come
• Our leadership team can’t agree on a plan or the organization’s goals, so we just take things as they come
• We’re just too busy around here to take the time to create our plan and clearly define our goals, so we just take things as they come 
• Our competitors have been attacking us unmercifully, taking our marketshare and our best employeees, and we don’t know how to respond, so we just take things as they come

This can be defined as the ‘We’re losing more and more every day, but we’re planning to make it up in volume’ school of management.  I try to avoid sports analogies whenever possible, but this one just begs for a football example. 

Imagine a football team.  They’re pretty good, lots of talented athletes, a good quarterback, big strong linemen, etc.   But they can’t figure out why they keep losing games.  And their coach tells them, “Guys, as long as we just show up at every game, play hard and have a strong defense, we’ll win the championship!”  Really?  I think a game plan, incorporating info about the competition’s tendencies, strengths and weaknesses; practiced prior to every game in the season; combined with proper training; with the goal of winning every game by scoring more points than the other team in every game - in addition to a strong defense - would drastically increase this team’s chances of success.  Wouldn’t you agree?

An organization with a plan and clearly defined objectives, which is communicated and understood by every person in the organization from top to bottom – will win almost every time, despite the economic conditions, marketplace, competition or industry trends.  Simply put, expecting your employees to perform at a high level or to succeed at their work without a plan and clear objectives is unrealistic, or worse, a failure of leadership.   Most situations where underperformance is the issue can be traced to this cause.  

LESSON FOUR: Your People ARE Your Brand.

There are lots of companies out there doing ‘brand development.’  They charge big bucks to make pretty pictures and generate copy, develop websites, print collateral, produce commercials and purchase marketshare for companies.  But in the end, it’s THE PEOPLE BEHIND THE BRAND that either makes or breaks the brand.  Think not?  I’ve got 3 words for you: Netflix, Google and Chipotle.  

Netflix.  Last year, in a moment of hubris at the demise of their main competitor Blockbuster Video, the CEO of Netflix decided to change the pricing structure and brand identity before checking in with his customers first.   In only one year, their stock has fallen from $176 to $69/share and they are losing customer like rats from a sinking ship.  Blockbuster, once all but dead, is considering re-entry into the video business.  One person in leadership who didn’t listen – made a decision that cost this organization billions of dollars and its reputation.

Next Google.  The myth is that they are THE hot company.  The reality is that their reputation is suffering because of how they treat people.  Google is the subject of Congressional investigations because of their marketing practices; is disliked by programmers and web developers world-wide; and is becoming one of the most hated brands in technology - gaining on Microsoft.  They operate with a secretive, ivory tower mentality, ignoring their customers and those who have helped them become a technology superpower.  And while they treat employees very well, it has been reported that 1500-2000 open positions remain unfilled at Google at any given moment.  In other words, the best and brightest are not going to work for them anymore.  To slightly mangle a saying from the Clinton administration, ‘It’s the people, stupid.’   People, like customers, current and former employees, vendors and the surrounding community talk to each other.  And they create your brand perception. 

Last, I submit Chipotle.  In this challenging US economy with high unemployment, lack of capital and businesses dropping like flies all around us..Chipotle stock rose from $221 to $341/share in the last 12 months.  This fast-food chain which started in Boulder, CO serves up tasty, healthy Mexican food at value pricing in funky surroundings.  What are they doing right?  Their people – wherever I go in the US – are the best.  They greet you when you enter, they smile, they look you in the eye, they talk to you, they say ’thank you’, they make your food just like you want it.   The food is always good and so is the service.   

Mexican fast food is not hard to find.  Haven’t been to one of their competitors for about a year now.  I don’t like the surly, disengaged people who toss the food at me and generally don’t even say ‘thanks’ when I pay them.  Don’t plan to go, either.   

The food is good, but the staff at Chipotle IS the Chipotle brand.   And I’m not a customer, I’m a raving fan, an evangelist.  Do your customers feel the same way about your brand because of how they are treated by your people?  If not, it’s time to fix that. 

LESSON FIVE: When you learn something, put it into action – NOW!

Knowledge is not necessarily power.  Having knowledge and being able to do something with it is power.  Chances are pretty good that one of your competitors has learned at least four of these lessons in the last year, too.   He who implements best, wins.  Remember, a wise man once said, ‘Get moving.  The light at the end of the tunnel might just be an oncoming train.’  

Here’s to a successful 2012!  Oh, and if you need some help, please give me a call.