Coaching Tip: The Leadership Blog

Why Every CEO Needs a Coach

Every Chief Executive Officer (CEO) is "on the stage" the majority of his or her work life but needs pre-performance quiet and confidential time to be creative, bounce their ideas off someone in a safe environment, and explore the unintended consequences of their future actions.  Engaging in a personal coaching conversation is a refreshing opportunity where the CEO can be completely open and creative in a confidential and safe place.

When asked what was the best advice he ever received, Eric Schmidt, Chairman and CEO of Google, recognized it was from John Doerr, who in 2001 said, "My advice to you is to have a coach."  Schmidt initially resented the advice, because after all, he was a CEO.  He was pretty experienced.  Why would he need a coach? 

CEO Schmidt asked himself, "Am I doing something wrong?"  His argument was, "How could a coach advise me if I'm the best person in the world at this?  But that's not what a coach does.  The coach doesn't have to play the sport as well as I do.  They have to watch you and get you to be your best.  In the business context a coach is not a repetitious coach.  A coach is somebody who looks at something with another set of eyes, describes it to you in [his] words, and discusses how to approach the problem."

Schmidt said, "Once I realized I could trust him and that he could help me with perspective, I decided this was a great idea.  When there is  [a] business conflict you tend to get rat-holed into it.  [The coach's] general advice has been to rise one step higher, above the person on the other side of the table, and to take the long view.  He'll say, 'You're letting it bother you.  Don't.'"

When a person faces a challenge and becomes stuck, he or she may seek the services of a personal coach.  Once this commitment is made, the person begins to experience a different, more hopeful, world as his or her perceptions evolve in meeting the personal challenge.  Professional coaches understand that the success of a coaching engagement depends on the willingness of the person-being-coached to commit to his or her personal development process. 

Team Cultural Fit

The recession has forced companies to be more competitive than ever; employees and managers have to be extremely customer-oriented and at the top of their game.

What this means is that all new hires have to be star players.  The have to be able to hit the ground running and get up-to-speed almost immediately, because the company doesn't have the luxury of waiting. 

They have to be ready, willing and able to play their position well and know how to play on an All Star Team...putting in the extra effort required in practicing their intercommunication skills to allow the team to win.  And they need to be employees and managers who appreciate and apply the team training and personal coaching the company invests in them.

Cash Remains King

The nation's monetary base--consisting of bills and coins in circulation plus banks' deposits at the Fed--has climbed 114% over the past year through May.  For comparison, the biggest annual increase before this crisis, going back as far as 1960, was a little under 16%.

Whether it's voluntary frugality or under the coercion of creditors, Americans have abruptly switched from living beyond their means to saving more and working down the debts they incurred during the bubble years.  Normally, consumer spending accounts for about two-thirds of U.S. gross domestic product...and...when you're saving, you are not spending as much as you did before.

The dramatic pullback in consumer spending means money that otherwise would have gone into raising prices is going into propping up the faltering economy.  Banks have drastically increased their reserves at the Fed rather than making new loans.  That's the biggest cause for the increase in the monetary base.  "At every level of the economy and every level of society, the demand for cash is unprecedented," says David A. Rosenberg, chief economist and strategist for Gluskin Sheff & Associates, a Toronto money manager.  Says Rosenberg: ""If the Fed didn't meet that demand for cash, we'd have a destabilizing deflation on our hands."

As a matter of fact, the economy is making ends meet, creating a deflationary spiral...where cash is king.

Excluding food and energy, consumer prices rose a modest 1.8% in the 12 months through May--and including food and energy, they fell 1.3%, the most since 1950.  Cutbacks by consumers are bringing about deflation in business, with unemployment in May at 9.4% and manufacturing using only 65% of their capacity, the lowest since recordkeeping began in 1948.  Small businesses that were aggressively raising prices a year ago are now "worried about weak demand, the fact that they don't have many customers," says William C. Dunkelberg, chief economist of the National Federation of Independent Business.

Source: BUSINESSWEEK, June 29, 2009

For information on how not to invest your funds:  5 Fatal Flaws of Trading
By Jeffrey Kennedy

EWI Senior Analyst Jeffrey Kennedy discusses why most traders lose, the five flaws associated with losing, and how to overcome these five flaws to become successful. Read More.

Big 3 Blind Spot: Quality Builds Marketshare

R.L Polk tells us that the average length of car ownership in the U.S. is up 24% since 2002.  Some 64% of people plan to keep their current car longer because of the recession.

Big 3 Leadership Blind Spot Led to Marketshare Erosion

Motor vehicle production now makes up less than 2% of U.S. gross domestic product versus as much as 5% in the early 1970s when the Japanese began to assemble automobiles here in the U.S.  

When Honda began to assemble cars in North America their product quality was not very good...yet, Honda leadership focused on building a quality product.  Over time, Honda did just that. 

Today, the leadership at Ford Motor is now starting to focus on quality and plans to build market share as consumers perceive the improved styling, design and quality improvements of the Ford brand.  Specifically, Ford expects to claim 25% of the expected marketshare losses of GM and Chrysler.

From Worker Burnout to a Winning Team Attitude

A dysfunctional work environment, if left unchecked, can deteriorate to the point of employee burnout. Burnout is a familiar term these days: it's the physical or emotional exhaustion that results from long-term stress or frustration.  Chronic fatigue is a major symptom of burnout: one feels physically, emotionally and spiritually exhausted. Behaviorally, the burnout worker becomes cynical, indifferent and increasingly ineffective in the job.   

According to Herbert J. Freudenberger, the New York psychologist who coined the term in 1972, burnout describes a specific condition. It is an emotional state characterized by an overwhelming and enduring feeling of exhaustion or aggravation.  Burnout is a condition that develops gradually as the person's creativity and effectiveness erode into fatigue, skepticism and an inability to function productively. 

Traditionally, the worker is the one who gets the blame but research shows that the cause of burnout lies mainly in current economic trends, the use of technology and management philosophy within organizations.  As managers become de-energized and lose confidence in their abilities, these emotions are transferred to employees.  Employee engagement and long-term improvements in corporate performance can't be accomplished with a burned out, low energy and low confidence leadership team.

Leaders can turnaround a failing work environment by helping employees move from the language of "blame" to the language of "personal responsibility.”  The first step is to instill confidence in the employee’s ability to meet and overcome workplace challenges.  Experience tells us that confidence precedes competence.  A person must first believe they can succeed by developing a winning attitude reinforced by skill-building training.

Why Leadership Development?

In this recessionary period, layoffs and other drastic measures are being taken by companies to insure their future survival.  However, leadership development programs are seen as vital for corporate survival today and in the future.

While it may be true that organizations are cutting funding for "training programs," that is not the case when it comes to grooming emerging leaders.  According to the 2008 Bersin & Associates Leadership Development Survey, a study of 400 organizations conducted last October by the Oakland, CA-based talent management research firm, 40% of those polled, said their spending on leadership development has remained the same, while about 36% of the organizations said their budgets were slated to increase this year. 

Deflationary Salaries

In a time of rising unemployment, would you welcome a salary reduction as an alternative to a layoff?

In the past nine months a growing number of major companies, including FedEx, Hewlett-Packard, Advanced Micro Devices and The New York Times, have all trimmed their staffers' base pay.  Most have made larger cuts for senior executives and smaller ones for the rank-and-file.

According to a Hewitt survey, some 16% of companies in a study of 518 large U.S. employers have made base salary reductions during this recession, and another 21% say they are considering one.

The key is to be sure stars still make more than their lesser-performing colleagues, even after a pay cut.  Telling an A+ player that he or she is going to take home less money this year, despite stellar performance, seems like a sure recipe for undermining enthusiasm.

Dave Ulrich, a professor at the University of Michigan's Ross School of Business, adds that trimming salaries is less risky in well-managed companies.  He thinks pay cuts may even boost morale if they avert layoffs among highly engaged employees.  "I don't think it's just pay that keeps people connected to a company," says Ulrich.

But other human resource experts argue that managers are paying too little attention to the perils of such cuts.  "We haven't yet seen the unintended consequences," says William J. Conaty, an advisor to private equity firm Clayton, Dubilier & Rice.  "People have long memories.  They'll remember whether they think they were dealt with equitably."

Source: BUSINESSWEEK, June 8, 2009 

Assessing Job Candidates

The importance of assessing job candidates prior to hiring can not be overstated, especially considering all the wasted time, money and negative publicity that can occur when Human Resource Departments (HR) don't do its necessary homework.

Employee turnover is inevitable.  Yet, unmanaged employee turnover can easily steal your company's knowledge base, profits and competitive edge in the market.  Organizations that do not actively manage the impact of turnover will find not "keeping the keepers" costly.

The major reasons for high employee turnover are:

Improper recruitment

The nature of the job and company

The characteristics of the individual employee

By focusing on improving incoming employee efficiency (from sharpening recruitment methods to better matching of candidates with the job and company culture) and reducing the length of time that a position is vacant, can substantially reduce turnover costs.

Focusing on the front end by screening job candidates carefully to engineer the right job fit allows for matching up the right person with the work they find challenging.  Today's pre-employment assessment tools screen for learning ability, personality and candidate interests to compare with a composite profile of your best job performers.

New data shows how costly an unreliable hire can be for organizations' bottom lines.  According to the U.S. Bureau of Labor Statistics, companies lose approximately 2.8 million workdays each year from unscheduled time off, aka absenteeism.  But pre-employment assessments make it easier for hiring managers to gauge a candidate's reliability as well as his or her ability to adhere to rules and regulations.  Assessments from companies such as Profiles International, Insight Worldwide and SHL are designed to identify job candidates who are more likely to be unreliable and unsafe in the workplace.

The forward thinking HR executive will employ such pre-employment assessments because they provide objective data to protect a company from any possible discriminary claims.

Source: Human Resource Executive, May 16, 2009

For more information, visit www.SelfAssessmentCenter.com and/or subscribe to the Assessment Industry Network by sending an email message to: personalassessments-subscribe@yahoogroups.com

Gold is still Money

By Robert Prechter, CMT

The following article is excerpted from a brand-new eBook on gold and silver published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. For the rest of this fascinating 40-page eBook, download it for free here.

Have you ever traveled abroad and taken a look at the local currency and wondered how the citizens of that country could take seriously what looks like “Monopoly money?” I’ve got news for you: You’re using the same stuff. Monopoly money is the money over which some government has a monopoly. It is the currency of the realm only because the state makes it illegal to use any other type.

Decision Making Safeguards

When no red flags exist, the decision-making process can be fast and simple.

When we spot red flags, we can design appropriate, effective safeguards that are less likely to demotivate everyone involved in the decision process:

 

1.    Experience, Data and Analysis: In business, there are many ways data can be collected and experience broadened.  Discussion with key customers can provide valuable feedback.  Consultants can be hired to offer objectivity and outside perspectives.

2.    Group Debate and Challenge: The process of debate can help expose assumptions and beliefs.  It’s vital to choose the right participants, as the group must identify appropriate challenges that meet organizational goals.

3.    Governance: It may be necessary to set up a separate governance team if one doesn’t exist apart from the decision-making team.  The new team should be designed as a vital backstop to stand in the way of any flawed judgments that make it past the decision team.

4.    Monitoring: The monitoring process tracks the progress of the decision.  Awareness of monitoring encourages decisions makers to think carefully before making their recommendations.  If decision makers know the outcome will be recorded and publicized, they will be motivated to think—and rethink—their positions.

Source:  Sydney Finkelstein: Think Again: Why Good Leaders Make Bad Decisions and How to Keep it From Happening to You