LWD 2010WK35 – Are You Counting What Counts?

Digest

About ‘Leadership Weekly Digest’ (LWD): The goal of this weekly newsletter is to highlight quality articles from the past week –in a condensed format– that discuss leadership, with a focus on employee engagement. Much of the content comes from those we follow on Twitter, and members of the Employee Engagement Network.

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China’s Great GDP Leap Forward by Liu Shengjun

Usually, all the posts featured on LWD relate directly to the topics of leadership and employee engagement (with the occasional distantly-related article that is too cool not to share). Since this week’s edition has a theme, the first article is going to serve as fertilizer to grow the unifying theme in later summaries:

For those that didn’t catch the reference in the title, the ‘Great Leap Forward‘ was a period from 1958 to 1961 where China’s communist government made economic and social changes that unintentionally contributed to the deaths of ~20 million citizens. Outside of China, this period is typically referred to as the ‘Great Leap Backward’. There has been a lot of press covering China’s recent jump past Japan to take 2nd place in Gross Domestic Product (GDP), which is the most often used metric of a country’s economic well-being. Consistent with out theme of ‘counting what counts’,  Liu Shengjun sites several examples of why the Chinese shouldn’t be so proud of this accomplishment:

  • The huge GDP gains by Chinese government and industry have pushed the citizens share of GDP down by 10%, indicating an unhealthy structure
  • A widening gap between rich and poor (beyond levels in Japan and Europe)
  • A high environmental cost & increasing levels of corruption
  • A per capita income ranked 124th in the world at only $3,600, less than 1/10 of those in Japan and United States.

In business, important numbers like revenue and margin are typically the quarterly focus. Other measures that better predict the current and future health of the company, often take a distant back seat…

Measuring What Makes Life Worthwhile by Chip Conley

In this video, Mr. Conley highlights a quote which is most often attributed to Albert Einstein:

“Not everything that can be counted counts, and not everything that counts can be counted.”

Chip Conley was featured in last week’s LWD, and when I came across his TED video, it set the tone for this week’s LWD: Measuring What Makes Life Worthwhile… which I liberally translated into counting what counts.

For me the key take-away was something that I have often seen, but rarely seen put into words so eloquently: businesses often take great pains to measure items that relate to ‘survival’ but rarely put measures into place that will evaluate if the business is motivating their employees and their customers to move up Maslow’s hierarchy (or Conley’s derivative ‘Transformation Pyramid’). There is LOTS of supporting evidence to show that many of the standard metrics are significantly improved by increasing your level of employee and customer engagement.

Both Sides of the Counter by Kneale Mann

Kneale (I’m usually more formal with names, but Kneale is a buddy), helps illustrate something about customers that rarely gets measured in any meaningful way; and I hope the featured business’ owner gets to see Kneale’s feedback!

You’ve contracted someone to do a hard job for you, and all else being equal, wouldn’t you rather they do the job with a smile instead of a scowl? IMHO I would rather the guy working on my house be in a good mood, I think it will translate into better quality work and fewer future problems. Kneale shares his story with us:

Eleven guys were working on my driveway: two on the paving machine, three with hand packers, three more with rakes, another guy driving a small roller machine, one guy in the truck and a supervisor. This was not a stoic grumpy bunch, just the opposite. They were talking and laughing and cracking jokes and having a good time. They were laying 300 degree asphalt in stinking hot 90 degree weather. It was certainly good for the old perspective.

Everything you do is marketing: If anyone saw this crew working and needed a new driveway, they’d be inclined to hire this company. It’s contagious to be around positive people.

I wonder how this business owner counts this business attribute, an attribute that so clearly counts?

If I’m flipping the burgers and you’re paying for lunch then we have our roles. But if later in the day, you are changing my oil and I’m paying the bill we simply switch places. It is easy to lob complaints when we are on the customer side. But we often would like to think our customers will understand we are trying our best. Eventually we will be serving each other so perhaps it is something we should keep in mind.

Yep!

The New York Times Is Dead Wrong by William Taylor

Years of talking about the importance of gender diversity in leadership roles has surely paid off by now, hasn’t it?!

For 2010 as a whole, the Times has published 698 obituaries–and only 92 were of women.

What’s going on here? The question is especially vexing since the percentage of women in the paper’s 2010 obituaries is virtually identical to the percentage of women chronicled in Times obituaries back in 1990. “Are the world’s prominent women–the ones deserving of NYT obituaries–simply living forever?” the NYTpicker wonders. “In the last two decades, has there been zero growth in the number of notable women who’ve died? Does it stand to reason that no more women have worked their way into the limelight in the last twenty years than in the previous twenty?”

Oh my!

A related question is, What really matters? As a society and business culture, we still tend to equate money with success. If someone is rich, the thinking goes, he or she may or may not be a no-good SOB, but a fortune is evidence that someone is smart, or at least shrewd, and no doubt a success. Which helps to explain why so many wealthy males get The New York Times obituaries, while women who died with smaller bank accounts, but who may have led richer lives, don’t get the attention they deserve.

If we’ve learned anything from the boom-and-bust cycles over the last 20 years, it’s that money is a pretty empty (and fleeting) metric of success.

[...]

So as I think about the bizarre gender gap in the obituary page of The New York Times, I worry less about what it says about the newspaper of record–and more about what it tells all of us about who deserves such recognition in the first place, and what their stories might suggest about a life well-lived.

It seems that the NYT Obituaries may be yet another organization guilty of not counting what counts! Read the complete article for their take on an alternate definition of success.

Does Your Company Suffer from Process Attention Deficit Disorder? by Brad Power

So what causes leaders to so often over-emphasize short-sighted metrics? Brad Power contends that there is a tendency for senior executives to get distracted from integrating continuous process improvement in the DNA of a company (he calls it PADD or ‘Process Attention Deficit Disorder’), in favour of the things often associated with the fastest path to the top: “People are recognized for growing new markets, launching new products, or doing deals. The best and brightest go into marketing, sales, or finance, or they run a profit center. They don’t go into process improvement.”

I have previously provided cautionary tales about hiring smart creative people and subjecting them to too much process, but the ‘process’ that Mr. Power is talking about here is the continuous re-evaluation of how the customer is impacted by the company’s products, services and direct-touch employees. This is in contrast to what becomes a static blind process that sucks the life out of your smartest most creative talent when left to fester; this festering is actually a byproduct of PADD:

In my research, I have found that one of the main causes of Process Attention Deficit Disorder is that the topic of “process” — how work is organized — is not part of the background, education, or career advancement of most executives. Senior managers don’t know what process improvement is or don’t believe it matters. Senior executives believe they are responsible for strategy and achieving quarterly (or monthly or weekly) financial results and growth. Middle managers, supervisors, and staff manage how work gets done.

In a magnified culture of personality, where senior leaders draw 500 times what front line workers earn, too many leaders see themselves, implicitly or explicitly, as superheroes. In the tension between the personal and the institutional, many leaders see themselves as personifying the organization, rather than serving as stewards. In this guise, they often don’t see the value of investing in strengthening core capabilities, institutionalizing process competence, or building innovative cultures. Their egos get in the way of them seeing this. They focus on themselves and their strategy, not their company’s operational capabilities. By thinking only of their results now, they pay less attention to their firm’s outcomes later.

So, what to do?

Process performance isn’t measured, tied to financial results, or tied to compensation. Most measures are tactical or transactional. They do not capture the full needs of the customer or the relative health of a process. Resources are managed by functions, or markets, or products — not by processes.

So in my glib summary: fix the problem by starting to count what counts…

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