Kairospl

July 18, 2010

Below is an article from Steve Martin from Influence At Work, UK which I would like to share with:

This month I want to persuade you to buy a car. It’s a compact sedan with a small trunk, good gas economy although the performance is nothing to write home about. Not a great start I hear you cry. And it gets worse. I am going to charge you several thousand dollars more for this car than other highly efficient and better equipped cars on the market.

The car I want to persuade you to buy is the Toyota Prius, arguably one of the most successful cars of recent times. Many have put its success down to people being incentivised to purchase one by way of the extra tax credits available to them. However after tax incentives were removed in 2006 rather than falling off a cliff, Prius sales actually rose by over 68%.

So what is persuading purchasers to be so keen to go green and can we apply the same lessons to our influence attempts?

In a recent study, published in the Journal of Personality and Social Psychology, Vladas Griskevicius from the University of Minnesota along with Joshua Taylor and Bram Van den Bergh from the University of New Mexico and the Rotterdam School of Management claim that making environmentally conscientious purchase decisions can be seen as altruistic and as a result publically enhance people’s status. As a result people can be persuaded to pay more money for a product that is green, not necessarily because it is any better than a comparable non-green product, but just because it is green.

To test their ideas a series of studies were set up where participants were asked to consider the purchase of three everyday items; a car, a dishwasher and a common household cleaner, each of which was available for purchase as either an environmentally conscientious green option or as a non-green option. In effect there were 6 products in total – 3 green and 3 non-green.

Each of the product types were equally priced, however it was clear that the features of the non-green products were considerably more luxurious than the more environmentally friendly ones. To give an example, the dishwashers had the same price ($1,100) but the luxurious non-green option featured a revolutionary drying system and came in a choice of finishes whereas the ‘green’ dishwasher used a water recycling system and was made with recycled parts.

Before they were asked to consider which of the products they would most likely choose, half the study participants were primed to think about ‘feelings of status’ by reading a story describing how they had landed a great new job and how very impressed they were by all the trappings of the office’s high-status features like the upscale lobby and the designer furniture. The other half read a control story that didn’t elicit any feelings of status.

When it came to choosing between the green and non-green options, getting people to consider their status had a significant influence over their choices. In the case of the car, 54% of participants who were primed to think about status chose the more environmentally conscientious green option compared to just 37% in the control condition. Similar results were recorded for the dishwasher and the household cleaner products. But why?

The study authors suggest that there are two potential influences at play here. The first is ‘costly signaling theory’ which is the idea that people often show off by drawing attention to excess energy and other resources they possess -  much like a peacock showing off to attract a mate. The second is ‘competitive altruism’ which is the idea that public displays of selflessness can build desirable reputations – think Bill Gates for example. To test these ideas a couple of further studies were conducted.

The first of these found that people in the ‘status’ group were less likely to choose green option products when no one knew about their purchases – for example if they made a purchase online.

A follow up study found that people in the status group preferred green option products less if they cost less to purchase. Thinking about their status and position persuaded people to make a less than optimal economic decision by choosing a more expensive but green option. It was like they were saying “look at me, I am a friend of the environment and I can afford to be a friend of the environment”. 

Perhaps this is the reason why, contrary to the belief that Toyota Prius sales would plummet after the tax incentive was removed, they actually continued to rise. It might also explain why so many Hollywood stars were persuaded to ditch their Ferraris and drive to the film set in their new Prius instead.

For those of us who would like to persuade more clients and customers to choose the green option there is some potentially good news. You don’t necessarily have to compromise on price, providing you think of ethical ways to publicly recognise your customers as environmentally conscious individuals.

This research should also prove insightful to those in the public sector who have the challenge of influencing whole communities to behave in more environmentally conscientious ways. Ensuring that there are mechanisms in place to publicly elevate the status of those who are acting in desirable ways can be very effective – just as effective as providing financial incentives.

 And for those of you who are yet to be persuaded to buy that Prius from me. Forget about the extra money it will cost. Instead imagine how wonderful your neighbors will think you are when you drive it to the store at 5mph so that everyone can see it really is you.

And remember not to park it in the garage!  

Source:
Griskevicius, V., Tybur, J.M., Van den Bergh, B. (2010) Going green to be seen: Status, reputation and conspicuous conservation. Journal of Personality and Social Psychology Vol. 98(3), 392-404

Watch out for the annoucement for the next Principles of Workshop in Kuala Lumpur, Malaysia.

June 11, 2010

Let me share with you this persuasion article from Noah Goldstein of the co-authors of the book, “YES” together with Steve Martin and Robert Cialdini. I am conducting a workshop on the Principles of Persuasiaon (POP) at the Park Royal Kuala Lumpur, Malaysia from July 1-2, 2010. The POP brochure for this workshop can be accessed from this website. Write to info@kairospl.com to register.

Yes” might just be the most beautiful word in the English language when we’re trying to persuade someone to take a particular course of action. But all too often, in cases in which there is a delay between Yes and when the course of action must be taken (e.g. “Yes, I’ll be sure to bring up your proposal in the meeting next week”), the person saying it fails to deliver on his or her promise. Fortunately, a new study points the way to a simple but often ignored strategy to encourage people to follow through with their initial commitments: Have them form a specific plan for where, when, and how they will go about accomplishing task, which researchers call implementation intentions.

Behavioral scientists David Nickerson and Todd Rogers wanted to know whether asking potential voters to form a specific plan for how they would get to the polls on Election Day would actually influence whether these voters made good on their intention to vote. To answer this question, they conducted an experiment in which a large sample of individuals eligible to vote in the 2008 presidential primary were called at home using one of several different scripts:

1. The Standard Script encouraged people to vote by reminding them about the election and suggesting that voting is an important responsibility. 

2. The Self-Prediction Script was the same as the Standard Script except it also asked whether the person intended to vote. This script was based on previous research suggesting that asking people to simply predict whether or not they will perform a socially desirable behavior increases the likelihood that they’ll do so by encouraging them to say yes, which leads them to feel committed to that course of action.

3. The Voting Plan Script (i.e. implementation intentions script) was identical to the Self-Prediction Script but also asked three follow-up questions designed to encourage individuals to create a voting plan on the spot. These questions were, “What time will you vote?” “Where will you be coming from?” and “What will you be doing beforehand?” The notion here is that by answering these questions, individuals will be able to generate a concrete plan that actually takes into consideration all of their other obligations that day, one that will be simple to follow come Election Day.

There was also a Control Condition that did not involve any contact with the potential voters whatsoever.

Realizing that asking people to report whether or not they voted after the election could produce a whole host of biases and inaccurate data, the researchers instead examined the official voter turnout records to see who did and did not end up actually voting in the election. The results clearly showed that the most effective script was the Voting Plan Script, which increased turnout by at least 4 percentage points compared to control. What’s more, the researchers found that this script had the most impact among households in which there was only a single eligible voter, increasing their turnout by 9.1 percentage points. Although there are several possible explanations, the evidence appears consistent with the possibility that multiple-eligible-voter households are much more likely to spontaneously generate concrete voting plans than single-eligible-voter households because they have more schedules to juggle, which means that the single-eligible-voter households have more of an opportunity to benefit from being asked to generate a plan by an outside party than do multiple-eligible-voter households.

This research makes it very clear that simply hearing “Yes” from another person is just a starting point, rather than an ending point, for persuasion. To optimize the likelihood that others will follow through with their intentions, consider specifically asking them how they plan to go about accomplishing the goal they’ve promised to pursue. This doesn’t need to be done in a micro-managing or demanding way. Rather, you could ask about the details as they relate to whether or not there are specific aspects of the tasks with which you can help.

March 25, 2010

Why is persuasion the world’s most researched skill? That’s easy—as history shows, it’s the world’s most important skill!

Take a trip back to the Fifth Century B.C., when Athenians were experimenting with a new form of government. The Athenians quickly discovered that to succeed in a democracy, they had to be persuasive. Leaders used persuasion (then called rhetoric) to gain agreement and win support. Everyday citizens used persuasion before a new legal body—the jury.

Recognizing its importance, Athenian scholars, including Plato and Aristotle, began to study the powerful process of persuasion. Circa 435 B.C., they defined three elements of the process of persuasion: Logos, the appeal to logic, reason, and facts; Pathos, the appeal to emotions; and Ethos, the appeal of the speaker’s character and credibility. These scholars found that one or more of these appeals characterize any instance of persuasion.

Aristotle wrote three books about persuasion. Among his conclusions, he stated that logic is the most reliable appeal, and that it is a “human failing” that people sometimes tend to be persuaded less by logic and more by emotion. Scientists are now learning precisely why appeals to logic can be so unproductive. And they’ve learned that Aristotle had it all backward when he defined logic as the most reliable appeal to persuasion.

In ancient Greece, persuasion proved to be enormously effective in politics, commerce, jurisprudence and everyday life—so much so, that when the Romans conquered Greece, they continued to study and apply the skill of persuasion. Caesar Augustus became a master persuader. He magnificently used the Ethos appeal, starting every speech with the phrase “Vini, Vidi, Vici.” I came, I saw, I conquered. By establishing who he was and why people should listen to him, he was able to quickly win their support.

Fast forward to the U.S.A. in 1940s and ’50s. Explosive post-war economic growth led to more research into how people could make good things happen through others. Writers produced a spate of books based on the groundbreaking research of Carl I. Hovland of Yale University. Many other prestigious universities and business schools also initiated research into the science, art and skill of persuasion. The race for knowledge on how to gain agreement, compliance, to get to YES was on in earnest!

Politicians of that era also realized that the greatest power in the world was the power to persuade. Even President Harry Truman understood how central persuasion was to his ability to lead. “I sit here all day trying to persuade people,” he said. “That’s all the powers of the President amount to.” Today Condoleezza Rice adds to this from her own position of power, “Power is nothing unless you can turn it into influence.”

In time, new and exciting facts about persuasion continued to appear. In the 1980s, Dr. Robert Cialdini, Arizona State University’s Regents Professor of Psychology, conducted extensive research into the emotional “triggers” of persuasion. By the late 90s, his book, Influence – the Psychology of Persuasion, had become Amazon.com’s best-selling business book. Soon, Harvard Business School and other leading institutions were offering executive courses in persuasion skills.

Today the quest for persuasion knowledge continues at warp speed. While some scientists are unraveling the human genome, defining how our chromosomes and DNA affect our physical bodies, others are unraveling the secrets of the brain, exploring how it processes decision-making information.

In this vein, Jay Conger, Director of the Leadership Institute at the University of Southern California School of Business, tells us why research into the “how to” of persuasion is so critical: “Today’s business contingencies make persuasion more necessary than ever,” he says. “Many businesspeople misunderstand persuasion and more still underutilize it.”

The art and science of persuasion continues to attract the world’s best minds. Why? Because today’s leaders need to know:

• How do I motivate others to act?
• ­­­How do I produce agreement, compliance, and results?
• How do I generate change?
• How do I make important things happen with and through others?
• How do I sell my ideas, my products, and my services?
• How do I trigger YES?

The brilliant minds of antiquity had many answers, and today’s scientists have even more. According to New York University Neuroscientist Joseph LeDoux, “The amygdala [the emotional part of the brain] has a greater influence on the cortex [the thinking part] than the cortex has on the amygdala, allowing emotion to dominate and control thinking.”

Similarly, the book and the PBS series “The Secret Life of the Brain” (funded principally by the National Science Foundation) distills the entire 2,500 years of persuasion research into a single sentence:

“We are not thinking machines. We are feeling machines that think.”

History and modern science agree. To persuade successfully, we must appeal to the listener’s inborn, hard-wired need to satisfy emotional needs and wants. We must frame our presentations to appeal to specific shortcuts, the triggers embedded in each of our brains. We must learn to work with the other person’s brain rather than against it as we have been doing for 2,500 years.

The brilliant minds of Greece and Rome recognized the need for persuasion, and set forth fundamental guidelines. Today’s scientists and researchers have defined the specific process that our brains use to make decisions. For the first time, we understand how to work with, not against, the brain’s decision-making process to help others make easy, non-analytical, yet correct decisions.

Today persuasion is more critical than ever. And for the first time we are learning how to persuade efficiently. For the first time we can see, in vivo, in real time, the brain’s blood, oxygen and neuron flows as it responds to decision stimuli. We can see distinct brain elements “light up” as they are brought into play. The exciting news is that we finally understand the persuasion process, a process we’ve been doing poorly for 2,500 years. And that understanding enables us to produce YES, agreement, action and results with and through others.

For the first time in history, we have the scientifically documented breakthrough to quickly, easily produce YES, and the results we want and need from others.

(Source: Seven Triggers)

Kairos Performance Learning will be hosting a Principle of Persuasion (POP) Workshop on June 17-18, 2010. Please click on POP on the website page for the brochure.

January 18, 2010

The ability to communicate effectively is vital for anyone in leadership positions. Communication has been taken for granted as leaders assume they have been doing that since their childhood days. Great leaders learn the art of strategic conversation. Below is an article by Jeswald W. Salacuse who is Henry I. Braker Professor of Law and Diplomacy, Tufts University, on the art of strategic conversation.

Much of the work of leading leaders takes place in conversations. Despite their individualized personal nature, successful one-on-one strategic conversations are subject to seven rules and principles that facilitate the task of leading other leaders. What are these rules?

1. Define and Stay Focused on Your Goal. Before you begin a strategic conversation,you should form a clear vision of what you want to accomplish in the meeting and keep that goal firmly in mind throughout.

2. Get to Know the Other Person and Particularly That Person’s Interests. All persons, but especially those who are leaders themselves, want and need to be treated as distinct individuals, not just one in a crowd of followers. So if you want to lead a leader, you need to focus on and understand the person as an individual.

3. Appeal to and Shape Those Interests. Once you understand the interests of the persons you would lead, you need to appeal to and shape them in a way that will bring about desired behavior. Sometimes leaders try to induce their followers to give up their interests for the sake of the company or for the leader personally. These types of appeals are not likely to bring about desired results. To work, they may require undesirable forms of coercion—especially with people who are leaders themselves.

4. Anticipate the Possible Actions of the Other Person. In conducting any strategic conversations, a leader must ask three questions: (1) How will my statements be interpreted by the person I am trying to lead in light of his or her interests? (2) What strategies, tactics, and reactions will the person take in response to my statements? (3) What should I then be prepared to say in response to his or her reactions?

5. Generate Options Together. Engage the other person in a process of generating options that will allow you to achieve your objectives and at the same time satisfy some or all of the other person’s interests. Toward this, create a climate in which the person you are seeking to lead believes he or she can actually participate in the process of decision making.

6. Evaluate the Options Using a Fair Process. Research indicates that persons are more willing to accept an adverse decision if they believe it was arrived at through a fair process, rather than one that is arbitrary. Fair process allows followers to be heard, permits their participation, and considers their interests and concerns.

7. Decide and Gain Commitment for the Decision. Your goal in a strategic conversation is not merely to gain agreement from persons you lead but to gain their genuine commitment to act for the benefit of the organization in the way you have indicated. To secure commitment, the two of you might agree on a plan for verifying your and the other person’s action. The obligation to make periodic reports or to allow you to make periodic inspections act as a force to encourage desired action by those whom you would lead.

January 13, 2010

The speed and execution in the game of football contain great lessons for business leaders interested in winning at work. So Clinton O. Longenecker, Greg R. Papp, and Timothy C. Stansfield contend in their book The Two-Minute Drill: Lessons for Rapid Organizational Improvement from America’s Greatest Game (Jossey-Bass).

The authors explain, “Winning in football today is all about teamwork, utilizing offensive and defensive talent, and developing and executing well-designed game plans.” Likewise, teamwork is critical to executing and accelerating change and improvement in today’s businesses. They see the same two-minute drill in football enabling corporations to accelerate sales growth, implement a lean manufacturing initiative, or roll out an improved customer relationship management program. Longenecker, Papp, and Stansfield suggest you assume that you are the quarterback. As such, you are responsible for the following:

Know the score and define winning.

Ask yourself how the organization is performing and what you really want to achieve. Share that information with team members.

Develop a scouting report. Going into any change effort, it is critically important to know your talents and those supporting you, as well as potential opponents to your change plans.

Create a sense of urgency. It’s important to raise operational levels to implement a plan for rapid change.

Develop your winning two-minute drill package. Now it’s time to take ownership of the effort. Identify the people you will need and the right plays to use.

Execute the right plays. The key here is execution, write Longenecker, Papp, and Stansfield. “Manage the clock and keep the team hustling.”

Close out the game, then celebrate. Before you take bows, be sure that the score holds up. Don’t celebrate until you know you are winning.

Conduct a post-game analysis. Analyze what happened to learn from the experience.

 From: Executive Matters, January 2008, AMA

January 04, 2010

A Happy New Year to all who are reading this blog.

Below is an article on preparing the next generation of leaders by William F. Baker and Michael O’Malley to start the new year:

The four qualities that great leaders are able to instill in others are:

• Self-confidence
• Self-control
• Self-awareness
• Self-determination

These four qualities—confidence, control, awareness, and determination— are not entirely independent. For example, leaders who are self-aware, who are attuned to their thoughts and feelings, in the context in which they are generated, are better equipped to offer calm and measured responses—that is, to stay controlled. Those who are confident are better equipped to take personal responsibility for outcomes and to take necessary action accordingly, without prodding from others. Taken together, these qualities form a cluster of abilities that others may admire as aplomb and maturity.

Self-Confidence

Successful executives naturally do not believe that they control the vicissitudes of life. What they can influence, however, is the way unpredictable occurrences are converted into meaningful experiences. It is only when the unsuspected is welcomed that it can be met with assuredness and the prospect of opportunity. Indeed, confidence in their abilities creates these situations in the first place. Those people who greet their worlds with confidence are much more adventuresome and have the personal resources (and resourcefulness) to meet new acquaintances, locate promising deals, and acquire interesting snippets of facts—even when stumbled upon by chance.

Self-Control

A well-adjusted adult is able to control his impulses in order to maintain a healthy perspective on what is most important and advantageous to his welfare in the long run. A well-adjusted leader, who is presented daily with a host of distractions, must be able to cut through the clutter and avoid being derailed or consumed by temptations and ancillary issues. The proverbial low hanging fruit that many managers reach for may be bad apples. Often these are diversions that use up precious time and resources and sidetrack leaders from the company’s main focus.

Self-Awareness

Great leaders recognize self-awareness and personal examination as virtues because these keep leaders attuned to the kinds of people they wish to be. Conversely, leaders who become divorced from their moral centers are able to justify any act, no matter how reprehensible it may be.

Self-Determination

By self-determination, we mean that ownership of results resides with each individual. Responsibility for one’s actions can’t be carved up or displaced. It means there is always choice.

Rather than hold people accountable, some managers often let employees off the hook by rationalizing or avoiding employees’ failings and thereby becoming duplicitous in excuse-making. But if you really want others to succeed, you have to fight your way through all of the obstacles that prevent honest feedback, and to combat the tendencies people have to deny personal obligation. 

December 14, 2009

What do bad “leaders” have in common? In its June issue, Harvard Business Review spells out some common characteristics.

1. Lack energy and enthusiasm.
2. Accept their own mediocre performance.
3. Lack clear vision and direction.
4. Have poor judgment.
5. Don’t collaborate.
6. Don’t walk the talk.
7. Resist new ideas.
8. Don’t learn from mistakes.
9. Lack interpersonal skills.
10. Fail to develop others.

November 30, 2009

The problem with most of us is that we are the go-fers. We think that we must always be on the go, having no time to rest.  In the article Peter Bregman, advises us to slow down to get more done.

On a Friday afternoon almost twenty years ago, soon after I had started working at a New York consulting firm, I was working on an important presentation with Andy Geller, who ran the office. We’d promised to deliver it Monday morning, and we were running behind.

At 2 o’clock, Andy  told me he had to leave.

“But we’re not done,” I stammered. Andy was not one to let work go unfinished and neither was I.

“I know,” he said, looking at his watch, “But it’s Shabbat in a few hours and I need to get home. I’ll come back Saturday night. If you can make it too, we’ll continue to work together then. Otherwise, do what you can the rest of today and I’ll pick up where you left off tomorrow night.” I decided to leave with him and we met again at 8 p.m. Saturday night. Refreshed and energetic we finished our work together in record time.

A little back-story: Shabbat is the Jewish Sabbath and it starts at sundown on Friday and ends when it’s dark Saturday night. The exact time changes depending on sundown — earlier in the winter, later in the summer. For observant Jews it’s a rest day. No work, no travel, no computers or phones or TV. The way I heard it once, the idea is that for six days we exert our energy to change the world. On the seventh day the objective is simply to notice and enjoy the world exactly as it is without changing a thing.

Observant Jews spend Shabbat praying, eating, walking, and spending time with family and friends.

They’re onto something.

This life is a marathon, not a sprint. Most of us don’t go to work for 20 minutes a day, run as fast as we can, and then rest until the next race. We go to work early in the morning, run as fast as we can for 8, 10, 12 hours a day, then come home and run hard again with personal obligations and sometimes more work, before getting some sleep and doing it all over again.

That’s why I’m such a fanatic about doing work you love. But even if you love it, that kind of schedule is deeply draining. Not an athlete in the world could sustain that schedule without rest. Most athletes have off-seasons.

So if we’re running a daily marathon, it might help to learn something from people who train for marathons.

Like my friend Amanda, who recently told me she was training to run the New York City Marathon. She’s never run anything before. I asked her how she planned to tackle this herculean feat with no experience.

“I’m just going to follow the plan,” she said and later emailed it to me. Here’s what I learned: if you want to run a marathon successfully without getting injured, spend four days a week doing short runs, one day a week running long and hard, and two days a week not running at all.

Now that seems like a pretty smart schedule to me if you want to do anything challenging and sustain it over a long period of time. A few moderate days, one hard day, and a day or two of complete rest.

But how many of us work nonstop, day after day, without a break? It might feel like we’re making progress, but that schedule will lead to injury for sure.

And when we do take the time to rest, we discover all sorts of things that help us perform better when we’re working. Inevitably my best ideas come to me when I get away from my computer and go for a walk or run or simply engage in a casual conversation with a friend.

There is a down side to rest days though, and it’s serious enough that I believe it’s the unconscious reason many of us resist taking them. They give you time to think. My friend Hillary recently broke her foot and was confined to bed rest for several weeks. “The cast gave me a timeout card which I never would have taken on my own,” she told me, “and when I did slow down, I felt a deep sadness. I had nothing to distract me from the feeling that I had been living a life in which my needs were never a priority.”

But while it was hard for her, it also gave her renewed energy to refocus on her priorities. When we rest, we emerge stronger. There’s a method of long distance running that’s becoming popular called the Run-Walk method; every few minutes of running is followed by a minute of walking. What’s interesting is that people aren’t just using this method to train, they’re using it to race. And what’s even more interesting is that they’re beating their old run-the-entire-distance times.

Because slowing down, even for a few minutes here and there and even in the middle of a race, enables you to run faster and with better form. And, as a side benefit reported by Run-Walkers, it’s a lot more fun.

Faster, better, more fun? The only downside is time to think? You don’t have to believe in God to realize that a day of rest is a good idea. But you do have to be religious about it.

November 26, 2009

When it comes to difficult conversations, leaders may seek to avoid them as they become uncomfortable with them. Below is an article by Sheila Dicks on the 7 strategies to handle difficult conversations.

A good leader has the ability to empower others. It is important that a leader develop people who want to share and help in carrying out the goals of the organization. If it is your intention to develop a company where employees feel valued and appreciated, then how you handle disagreements can be crucial. 

1. Whatever the issue – bring it up in private. When you bring up disagreements in public those not involved feel out-of-place and uncomfortable. Also, their opinion of you is lowered.
2. Be sure of what you want to say, do it as soon as you can and deal only with the facts. Know what you want to say before bringing up the issue and don’t let a lot of time go by before you say anything. Letting the issue sit will not make it go away but will make it bigger. Resentment sets in when there is a problem or a difficult situation and nothing is being done to solve it.
3. There may be many issues that you want to discuss but discuss only one at a time. Too many issues at one time can be overwhelming and it will be difficult to come to a solution.
4. Keep your voice at a moderate tone and do not speak in an accusatory manner. Using a loud voice and an accusatory tone can be intimidating and will be seen as aggression and can lead to a battle of words where no one listens and both parties lose. For those more timid, when faced with an intimidating person they will retreat, say nothing or say anything to keep the peace. 
5. Give the person a chance to state their feelings or opinion and if you think you have heard something that you do not like, ask them to repeat it and try to understand – do not get defensive. Sometimes when we assume we know the whole story and in our quest to be ‘right’ we only half listen. Instead of listening to understand we listen to contradict. Listen to understand 
6. Look at the issue from their point-of-view. Do not assume you know what the other person is thinking or that you know the whole story. Do not bring up things that the person cannot change.
7. Treat the person with respect and try to come to a solution that will benefit both parties. If you were wrong apologize.

November 13, 2009

Below is an article by Mark Vickers, Institute for Corporate Productivity on the leadership competencies that matter in today’s trying economic times.

In August, the Institute for Corporate Productivity (i4cp) and AMA conducted a study to determine which competencies leaders need to succeed.  The top three:  knowing the business, knowing the customer, and having the ability to execute strategy. 

The context for leadership is dramatically different from what it was even five years ago. Customers are harder to get and to keep, profit margins tend to be slimmer, and lots of employees live in a state of anxiety, stressed by overwork and worries about their jobs.

What’s a leader’s role in these trying times, and what competencies do leaders need to succeed? The Insitute for Corporate Productivity recently conducted a major new study in partnership with American Management Association (AMA) to find out.

In August 2009, the Institute received responses from about 600 employees working at the manager level or above in a wide range of industries. We found that three competencies clearly came out on top:

1. Knowing the business
2. Knowing the customer
3. Having the ability to execute strategy

In tough times, companies need leaders who know the nitty-gritty details of their companies, and none of the details is more important than knowing the customer. They also need to be able to act on this knowledge, and that means excellent execution of the strategies that serve those customers.

But these aren’t the only critical competencies today. Respondents were asked to identify, from a list of 14 leadership competencies, the six that best characterize the most successful leaders in their organizations currently. Among the other most widely cited competencies were these:
• Building good relationships
• Having good communication skills
• Creating an environment of trust and respect

These three competencies were more widely cited than such important issues as being able to develop strategy and knowing how to align the organization well.

A similar leadership survey was conducted by the Institute in 2005, also in partnership with AMA. It is interesting to note that while knowing the business and knowing your customer were also important a few years ago (that is, when the economic pressures weren’t as intense), “building relationships” has gained significant ground in importance. Taken together, these results suggest that while technical competence is still paramount, there are softer skills that leaders cannot ignore, especially during the tough times.

One of the companies that has weathered the economic downturn well is McDonald’s Corp., a longtime member of the Institute for Corporate Productivity’s network. When Slate magazine recently looked at “who won the recession,” its answer was that McDonalds did. No doubt McDonald’s business model was largely responsible for its success, but it’s probably no coincidence that the corporation has also been in the forefront of identifying and developing leadership competencies that are helping to build bench strength around the world.

Developing a strategic perspective and maximizing business performance are two key leadership competencies at McDonald’s. Additionally, coaching and developing others and improving the performance of teams are critical components of the leadership mix. That is, the corporation emphasizes the “hard” skills such as maximizing business performance even as it leverages “softer” skills such as coaching and communication.

What’s more, McDonald’s knows that leadership competencies must change with evolving business circumstances, so management constantly scans the external and internal environment to make sure the firm’s leadership competency model accurately reflects current needs.

The Institute’s 4-Part Recommendation:

1. Ensure your leaders understand your business and, especially, your customers. Employees attribute competency to leaders who demonstrate superior knowledge in these areas. By retaining close relationships with key customers during a down economy, good leaders reassure their employees that the organization will weather the storm.

2. Leaders must have the skill of making the right things happen. This is what strategy execution is all about. It isn’t enough to simply tell people “execute this plan.” Good leaders know which people to involve, which processes to promote, how to track progress, and how to untangle situations where progress isn’t being made.

3. Leaders need to be able to do more than interpret the balance sheet. They need to know how to communicate well and build relationships. Leaders can easily forget what it’s like to not be in the information loop. They need to be able to share information and explain why decisions were made. Even an explanation that isn’t well liked will be perceived more favorably than a decision that apparently comes down without rhyme or reason.

4. In a tough environment, good leaders must still be able to create an environment of trust and respect. For example, employees must believe that layoffs and restructurings are motivated by the best interest of the organization instead of pet projects and personal agendas.