No Boss Likes a Surprise—Good or Bad

Never surprise the boss, particularly on potentially volatile issues that could affect your project’s timeline, budget, or performance.

Even good surprises can backfire. Many an example exists of employees bringing the boss what they believe were good news, only to realize later that that the surprises weren’t so good after all.

Consider the following example of a Boeing test pilot pulling off a shocking stunt on a prototype aircraft, much to the exasperation of his company’s leadership.

A Reckless Stunt That Created a Buzz

Boeing 707 Dash 80 prototype The Boeing 707 was America’s first passenger jet aircraft. Prior to the 707, which entered service in 1958, air travel was mostly limited to the affluent—and even they were hesitant about air travel’s safety. The 707’s in-service safety record and its economic characteristics quickly made travel more accessible and dependable. The 707 ushered in the Jet Age.

But for Boeing, today’s leading aircraft manufacturer, developing the 707 was a big gamble. The 707 had no orders, and Boeing embarked on its development entirely on the wager of its prospective commercial success. When the aircraft’s design commenced in 1951, Boeing’s estimated development costs were $16 million. That was roughly 20% of the company’s value, and more than twice its yearly profits—nearly all of which originated from military contracts.

The Demonstration That Was Far from What the Boss Had Authorized

Boeing built its first and only 707 prototype aircraft in 1955. The company’s leadership decided to show off the aircraft at Seattle’s Seafare Hydroplane races on August 7, 1955.

The display plan was to have Boeing’s Chief Test Pilot, Alvin “Tex” Johnston, do one low pass over the racecourse so that the airline executives, industry pundits, and government officials who attended the high-profile event could witness Boeing’s new undertaking.

Johnston had other plans. In his mind, the audience needed to be sold on the plane’s performance and safety. Seized by the impulse to flaunt the agility of the 707, Johnston had a little more in mind than just an unpretentious flyby.

During the in-air demonstration (see YouTube video,) with the aircraft soaring over Seattle’s Lake Washington, Johnston suddenly pulled back on the controls, and the plane started to climb at a speed of 400 miles per hour. Then, he did a complete 360-degree roll and flew the plane upside down for a moment. As the crowd watched in shock and amazement, Johnston did a second barrel role.

Overconfident Employee, Furious Boss

Alvin Melvin (Tex) Johnston, Boeing Test Pilot In the startled crowd was Boeing’s legendary president William “Bill” Allen. Allen, who had authorized no more than a simple flyby, thought that Johnston’s first barrel role was a mistake. When Allen witnessed the second barrel roll, he feared that either Johnston had lost his mind, or the aircraft was in grave trouble.

According to Robert J. Sterling’s Legend & Legacy: The Story of Boeing and Its People (1991,) Allen summoned Johnston into his office the next day. Allen demanded an explanation and inquired why Johnston had foolishly risked the company’s only prototype.

Pleased with his successful accomplishment, Johnston offered a simple explanation, “I was selling airplanes.” Johnston explained that he had previously tested barrel rolls on the prototype, and it was a safe maneuver. He hadn’t risked the aircraft at all.

Allen reproached Johnston and told him that he appreciated the efforts, but Johnston was never to do anything that had not been approved previously.

Never Let Your Boss Be Surprised by Bad News

If there is only one thing worse than delivering bad news, it’s not delivering bad news as soon as you know that some trouble is brewing.

No boss wants to hear about any looming issue from some third party—especially if it could be worrying—and put her on the spot with her peers and superiors.

When you fail to report any bad news, you are leaving your boss exposed to being blindsided with a potential problem, and the perception that your boss doesn’t have control of her organization.

Idea for Impact: A Good Employee is Predictably Excellent

The surest way to delight your boss is by setting the right expectations, discussing and coordinating on a plan of action, and delivering on her expectations of your performance.

When the status of important any project changes, make it a priority to bring your boss and other affected constituents up to date. If, right from the beginning, you’ve made the true picture clear, your boss may be less surprised with the bad and the good.

Never surprise your boss—just keep her clued-in on a regular basis.

Seven Easy Ways to Motivate Employees and Increase Productivity

If you’re a manager, you can become a motivator by inspiring your employees to high performance—and produce beyond the ordinary.

  1. Seven Easy Ways to Motivate Employees and Increase Productivity Purpose. Even the mundane can become meaningful in a larger context. Howard Schultz, the founder and CEO of Starbucks once said about providing propose, “People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for, that they trust.” Sometimes that’s all people need to get their skates on—because nothing is worse than feeling that they’re are stuck doing a meaningless task.
  2. Autonomy. Empower people to innovate and make decisions. Be clear about performance expectations. Reduce your direct supervision of their work. Don’t micromanage.
  3. Appreciation. Reward your employees’ small as well as big successes. Recognition is easy and need not be expensive and time-consuming.
  4. Involvement. Interact directly with frontline employees, observe their work, solicit their opinions, seek ideas for improvement, and work directly with the frontline to identify and resolve problems. Encourage employees to talk about the “undiscussable,” even if others don’t want to hear it.
  5. Challenge. Put people in situations where they can grow, learn new skills, and gain new knowledge.
  6. Urgency. Disregard command-and-control and, instead, become an expediter and facilitate your employees getting their job done. The pioneering management guru Peter Drucker encouraged managers to frequently ask of employees the one question that can initiate more improvement than any other: “What do I do that wastes your time without contributing to your effectiveness?”
  7. Empathy. Care about your employees’ success and give them hope about their performance. Be sincere. Demonstrate you value differing opinions.

Idea for Impact: The bottom line on motivation is this: People know what motivates them. Ask them. You may not have any idea what they want.

A Sense of Urgency

The most successful managers I know are highly attentive of their colleagues’ sense of urgency and incessantly adapt to them.

In his excellent Steve Jobs biography, Walter Isaacson evokes Apple CEO (and operations wizard) Tim Cook‘s responsiveness and a sense of urgency:

At a meeting early in his tenure, Cook was told of a problem with one of Apple’s Chinese suppliers. “This is really bad,” he said. “Someone should be in China driving this.” Thirty minutes later he looked at an operations executive sitting at the table and unemotionally asked, “Why are you still here?” The executive stood up, drove directly to the San Francisco airport, and bought a ticket to China. He became one of Cook’s top deputies.

Idea for Impact: Bosses and customers often respond more positively to your focus on creating a sense of urgency before emerging problems erupt in a crisis.

Don’t Lead a Dysfunctional Team

The difference between functional and dysfunctional teams often boils down to effective team leadership. If you’ve been asked to lead a team, you’ll get more from your team members if you know what’s expected of the team, and manage your roles and responsibilities.

  1. Define the charter. Find out what your customers want. Find out how much latitude your team has—decision-making, reporting procedure, access to resources and information. Make sure there’s organizational support for these matters.
  2. Build on strengths. If team members are selected for you, determine what each person can contribute to the team’s effort. Ask members to identify their strengths.
  3. Set ground rules. Discuss how the team will operate. Be clear about performance expectations. If necessary, write down the rules agreed upon by team members.
  4. Develop a mission and goals. Get your team talking about what needs to get done, by whom, and when.
  5. Group Polarization: Why Like-Mindedness Is Dangerous “Herd the sheep.” Part of your job is to be a sheepdog. Keep people together and herd them toward goals.
  6. Break up conflicts. Disagreements are fine, even healthy, but outright hostility or anger is counterproductive. Stop the discussion, clarify positions, and try to find areas of agreement.
  7. Avoid groupthink. Don’t compromise too much for the sake of consensus, harmony, and “esprit de corps.” Don’t settle on the lowest-common-denominator decision upon which everybody agrees.
  8. Build bridges. Keep your sponsor, your manager, and each team member’s boss informed of the progress of the team’s assignment.
  9. Be visible. Any crisis calls for constant, candid communication. Knowing how to step up your communications efforts to the right levels during confusion is a powerful tool in managing a crisis.
  10. Captain the ship. You’re responsible for your team’s every outcome—good or bad. You are wholly accountable for everything that happens under your authority. Never pass the blame should things go wrong.
  11. Make the work fun. Give your team lots of recognition. Celebrate the team’s accomplishments.
  12. Establish freedom and autonomy. Empower team members to innovate and make decisions. Encourage all ideas and make sure that they are respected, no matter how strange they may sound. Micromanage only when you must.
  13. Assess performance. Periodically, ask the team to rate its performance. Resolve any problems as quickly as possible.
  14. Get stuff done. Don’t lose sight of your goals and your mission. The only thing that matters is the relevant results.

How to Hire and Promote the Best

Standardized tests, intelligence exams, and personality assessments have been in vogue for centuries for selecting job candidates and promoting employees. For instance,

  • In Plato’s Greece, civil service candidates were required to pass difficult physical and cognitive tests.
  • In China, the Han and Tang dynasties administered tests of literary style and the classics to hire the establishment bureaucrats. Aspirants were required to pass multiple three-day provincial exams and then take a final exam in the imperial capital.

Modern hiring practices have centered on the idea of competencies—specific behaviors, skills, knowledge, and pertinent experiences—identified for successful job performance.

Harvard psychologist David McClelland (Competency Modeling) Harvard psychologist David McClelland first proposed the idea of ‘competence’. In 1973, he introduced a then-revolutionary idea that transformed how companies hire and promote people. In his influential paper, titled “Testing for Competence Rather than for Intelligence,” McClelland made a case that a candidate’s GPA, IQ, or scores from intelligence or aptitude tests were not all as valid predictors of job success as was then imagined.

McClelland argued that another set of factors—“competences”—were better measures for explaining job success. To hire the best person for any job, McClelland recommended that organizations,

  • Begin by analyzing people who now have the job and people who held that job previously.
  • Classify the star performers—say the top 10%—by some logical and meaningful metric.
  • Compare the star performers to people who are merely average by a systematic method.
  • Identify the traits, characteristics, and behaviors in the star performers and not in the average performers.
  • Hire and promote people who have demonstrated the distinct traits and behaviors of the star performers.

Competency Modeling - How to Hire and Promote the Best Over the years, McClelland’s paper has evolved into “competency modeling,” a widespread methodology that is now at the heart of how many companies manage talent and achieve professional development for employees.

Not only are competencies often hard to define and understand, but testing for competencies through simulation or evidence is very difficult. Not to mention of how hard it is to assess employees quickly. Hence, at many “competency-driven” companies, human resources departments have dedicated teams to develop and implement competency models (see example from 3M, the Minnesota-based industrial and consumer products) to hire, train, evaluate, and promote employees.

Competency models form the baseline criteria for identifying high-potential employees, and succession management procedures.

No One Likes a Meddling Boss

William Jones 'Old Captain Bill' General Superintendent of Edgar Thomson Steel Works William R. Jones—“Old Captain Bill” as he was fondly called—was the General Superintendent at Andrew Carnegie‘s Edgar Thomson Steel Works, the genesis of the Carnegie steel empire.

Captain Bill (1839–1889) had little formal education. He certainly didn’t understand much of the science of the steel-making. Nonetheless, he was street-smart, outgoing, forthright, and ingenuous. His workers venerated his boundless energy. With their support, he not only broke many records in steel production, but also developed an array of inventions that touched many aspects of steel-making and rail-manufacturing.

Captain Bill’s boss, Charles M Schwab (1862–1939,) recalled an amusing interaction between Captain Bill and Andrew Carnegie in an essay titled “My 20,000 Partners” in the 19-Dec-1916 issue of The American Magazine:

The captain, I remember, used to characterize Mr. [Andrew] Carnegie as a wasp that came buzzing around to stir up everybody.

One hot day in early summer, Carnegie sought out Jones in the steel factory.

“Captain,” he said, “I’m awfully sorry to leave you in the midst of hot metals here, but I must go to Europe. I can’t stand the sultry summer in this country. You have no idea, Captain, when I get on the ship and get out of sight of land, what a relief it is to me.”

“No, Andy,” flashed the captain, “and you have no idea what a relief it is to me, either.”

No One Likes a Meddling Boss Idea for Impact: Meddling is not managing. While “keeping your eye on the ball” (and management by walking around) is indispensable to managerial control, an overly-engaged boss can create self-induced commotion. Effective managers delegate results when they can and interfere only when they must. Learn to have faith in the ingenuity of your employees, and give much latitude in how they do things.

How to Manage Smart, Powerful Leaders: Book Summary of Jeswald Salacuse’s ‘Leading Leaders’

How to Manage Smart, Powerful Leaders: Book Review of Jeswald Salacuse's 'Leading Leaders'

The Most Valuable People are Often the Most Difficult to Manage

As you climb the career ladder, you will find yourself working increasingly with many other powerful leaders—both inside and outside your organization—who hold the key to your success. Often, you may share responsibility and control with a variety of leaders over whom you may lack authority and influence. Compared to others you’ve worked with in the past, many of these leaders will be more talented, ambitious, competitive, accomplished, assertive, controlling, and ego-centric.

According to by Jeswald W. Salacuse’s Leading Leaders (2005), driving change when you lack influence over other leaders requires you to tread carefully. You must employ all the diplomatic and tactical skills at your command. “Your ability to lead other leaders arises not just from your position, resources or charisma, but from your will and skill.”

The Only Way to Lead Leaders is to Do What is in Their Interests

'Leading Leaders' by Jeswald Salacuse (ISBN 0814434568) Salacuse’s central idea in Leading Leaders: How to Manage Smart, Talented, Rich, and Powerful People is that your success depends exclusively on your personal ability to negotiate shared and conflicting objectives, and subordinate your interests to theirs. “Move your followers to take action by characterizing a problem or challenge in such a way that it is in their interests to do something about it.”

To do this, you must determine the interests of those you wish to lead and then make it loud and clear to them that you are indeed serving their interests. This requires meticulous listening, reframing of your objectives in terms of their interests, and respecting their authority and autonomy.

Salacuse breaks the challenge down into “seven daily tasks,” each of which takes a chapter in Leading Leaders.

  1. How to Direct and Negotiate the Vision: To negotiate a compelling vision for your organization that other leaders will buy into, decide on your direction for them and then have a strategic conversation on that subject. Lead an open discussion that allows for their enthusiastic participation. Do not impose your new vision from the top. Through a series of premeditated questions, pilot them to your conclusions. Such collaboration ensures that the leaders will own and support the decisions you select for them. Learn to identify those internally influential people relevant to your objectives and appeal to them. “Beware of becoming so intoxicated by your own vision that you fail to see clearly the reservations that members of your organization may have about pursuing that vision enthusiastically.”
  2. How to Integrate and Make Stars a Team: Your job as the leader is to make sure that all the members of your organization understand that they have common values, shared history, and collective interests. Focus on communication. Demonstrate both by word and by deed that you put the interests of the organization above your own. Understand the nature of the cultural differences that may divide your organization’s leaders and then seek to find ways to bridge any gaps. “Deal directly with other leaders who are spoilers by converting them or isolating them.”
  3. How to Mediate and Settle Leadership Conflicts: The more autonomous the other leaders are, the greater the odds of conflict over turf, power, style, and goals. A leader must intervene and mediate when other leaders come to disagreement. When conflicts arise, read between the lines. Observe the adversaries’ interactions, and find ways to improve communication. Look beyond the conflicting parties’ stated positions; probe for deeper interests. Work as a bridge, and find areas of agreement that can resolve the conflict. Consider how you could apply the six mediation power tools (incentives, coercion, expertise, legitimacy, reference, and coalition) most effectively to resolve conflicts. “A mediator, unlike an arbitrator or judge, has no power to impose a solution.”
  4. How to Educate People Who Think They are Already Educated: Approach your teaching role tactfully. Leaders tend to be proud and sensitive—they may begrudge being treated as unqualified, unskilled, or inexperienced. Before you instruct them, make sure you understand their frame of reference. To the maximum extent possible, do your educating one-on-one, rather than in groups. Actively involve and invite their contributions. The command and control method of instructing them will be ineffective. Instead, use the Socratic Method—ask questions that encourage people to discover the truth for themselves. “In leading leaders, the most effective instrument is not an order but the right question.”
  5. Tact and Diplomacy Matter More When Leading Other Powerful Leaders How to Motivate and Persuade Other Leaders: Learn as much as you can about other leaders—their backgrounds, interests, and their goals. Design the specific, personalized incentives that will accord with their interests—only individualized incentives persuade people to act in desired ways. Agree on future goals for the short term, medium term, and long term, and show how those goals relate to those of your organization. Be open and transparent with information so everyone knows where they are and where they are going. “Motivate your followers by envisioning a future that will benefit them and communicating that future to them in a convincing way.”
  6. How to Represent Your Organization to the Outside World: As a leader, you are always on the stage. Everything you do will be subject to scrutiny. Your every action and statement, whether in public or in private, can affect your organization’s relationships with the outside world—customers, competitors, regulators, media, investors, and the public in general. Actively manage their perceptions and expectations. If those interests are dysfunctional or unworkable, seek to change or transform them through one-on-one diplomacy. “One of the most important functions that leadership representation serves is the acquisition of needed resources.”
  7. How to Create Trust to Get the Most out of Your Leadership: People will trust you not because of your appeal, charm, or foresight, but because they’ve decided that aligning with your leadership will move their interests forward. Understand the people you lead and know their interests. Manage their expectations and deliver what you’ve promised. Reinforce your communications during problems and crises. Be consistent and predictable in your actions. “Openness is not just an easy smile or a charming manner; it refers to the process by which you make decisions that have implications for your followers’ interests.”

Tact and Diplomacy Matter More When Leading Other Powerful Leaders

Recommendation: Read Jeswald W. Salacuse’s Leading Leaders. This excellent book’s insights make a great template for the basics of executive leadership. You can especially learn how to gain persuasive skills in situations where you may not have much influence.

Beyond the academic pedantry (the author is a professor of law, diplomacy, and negotiation,) the abundant examples from political leadership are far more multifaceted than the narratives in Leading Leaders tend to imply, but they serve as good cases in point.

Leading Leaders offers a matchless resource in documenting what constitutes effective emotional leadership, which is, in spite of everything, all about persuasive power and influence to get things done through people. The key learning point is, “In developing your leadership strategies and tactics, you need to take account of the interests of the persons you would lead. Leading leaders is above all interest-based leadership. Leaders will follow you not because of your position or charisma but because they consider it in their interest. Your job as a leader is to convince them that their interests lie with you.”

The 7 Hidden Reasons Employees Leave [Book Summary]

Employee engagement and retention of top talent is a holy grail of people management—and nearly as hard to pin down.

Employees expect managers to be fair, pay fairly, listen, value opinions, relate, develop, challenge, demonstrate care, advance, and so on. But many employees don’t know when and how to voice their concerns, or negotiate for what they want.

All managers know that engaged employees are happier and more productive. Yet, managers and HR managers cannot simply make employee engagement “happen.”

'The 7 Hidden Reasons Employees Leave' by Leigh Branham (ISBN 0814408516) In The 7 Hidden Reasons Employees Leave, employee-retention expert Leigh Branham discusses how companies can tackle employee disengagement and retain their best and brightest people.

Using a copious amount of facts and figures from interviews and surveys, Branham explores seven reasons for employee disengagement. For each reason, Branham lists signs that managers need to keep their eyes open for, and shows how employers and employees could communicate and understand their mutual needs and desires.

“Some Quit and Leave … Others Quit and Stay”

According to Branham, employee disengagement—and eventual resignation—is not an event; rather, it is a plodding process of bitterness, discontent, and eventual withdrawal that can take weeks, months, or even years until the definite choice to resign happens. He lists the ten most common stimuli that trigger employee disengagement:

  1. Poor management
  2. Lack of career growth and advancement opportunity
  3. Poor communications
  4. Issues with pay and remuneration
  5. Lack of recognition
  6. Poor senior leadership
  7. Lack of training
  8. Excessive workload
  9. Lack of tools and resources
  10. Lack of teamwork

Branham claims to have synthesized some 20,700 employee-exit surveys and has identified four fundamental human needs (compare to Maslow’s hierarchy of needs) that must be met by employers:

  • Employees need to feel proficient. They want to be matched to a job that aligns with their talents and their desire for a challenge.
  • Employees need to feel a sense of worth. They want to feel confident that their commitment and their efforts translate into meaningful contributions to their company’s mission. They desire to be recognized and rewarded appropriately.
  • Employees need to be trusted. They expect their employers to pay attention, and be honest and open in their communications.
  • Employees need to have hope. They want to be treated fairly, and given opportunities to grow their skills and advance their careers.

Why Employees Start Feeling Disconnected from Their Work

Why employees start feeling disconnected from their work The core of The 7 Hidden Reasons Employees Leave is a “how to” guide to address each of the seven reasons to enable a company to pursue the path to become an “employer of choice.”

Reason #1: The Job or Workplace Was Not as Expected. Many new hires join their companies with a wide range of misconceptions and unrealistic expectations. Some stay and adapt, others disengage and stay, and some others disengage and ultimately leave. Branham advocates creating realistic job descriptions, and open communications between managers and employees on achieving their mutual goals and expectations.

Reason #2: The Mismatch between Job and Person. Companies with strong reputations for selecting the right talent and keeping employees well matched with their jobs have a strong commitment to the continuous upgrading of talent. Managers can assign tasks so that employees can be more engaged through the use of their “motivated abilities.” Managers must keep an eye open opportunities to augment employees’ jobs by delegating tasks they might not have considered before.

Reason #3: Too Little Coaching and Feedback. Branham affirms that most managers do coaching and feedback merely as annual or biannual HR-required discussions that bind ambiguous targets to performance-ranking and pay scale. Managers must lead frequent, informal, on-the-job feedback conversations with employees. Branham identifies four principal themes that managers must address to make their performance management practice seem less controlling and more of a partnership:

  1. “Where are we going as a company?”
  2. “How are we going to get there?”
  3. “How does the manager expect the employee to contribute?”
  4. “How is the employee doing? What is going well? What are the key suggestions for improvement?”

Reason #4: Too Few Growth and Advancement Opportunities. Branham observes that most talented employees cannot pinpoint and articulate, and often underuse their greatest strengths. He encourages companies to provide self-assessment tools and career management training for all employees, enabling them to be the best they possibly can be. Most “employers of choice” have a strong mentoring culture. They communicate that employees must take the initiative in their own career development.

Reason #5: Feeling Devalued and Unrecognized. To Branham, many companies do not have a formal and informal culture of recognition because their managers are themselves too busy with their nominal responsibilities to pay adequate attention to employees’ performance. Or, they can’t discern between average and superior performance. He lists recommendations for competitive base- and variable-pay linked to achieving business goals. He reminds managers that employees are hungry to be listened to, and want their ideas sought and implemented.

How companies can tackle employee disengagement and retain their best and brightest people Reason #6: Stress from Overwork and Work-life Imbalance. Branham observes that the relationships employees form with other employees is a glue that binds people to their workplaces. He encourages fostering social connectedness by assigning cross-functional team projects and organizing group outings.

Reason #7: Loss of Trust and Confidence in Senior Leaders. When senior leaders don’t back up pronouncements such as “people are our most important asset” with their actions, even mid-level managers begin to question the decisions and the actions of senior leaders. The result is a manifest lack of enthusiasm in the workplace, and in the rising complaints and questions about policies and practices. Leaders must set the tone for workplace culture and must back up their words with actions to discourage employee cynicism and disengagement.

Becoming an Engaged Leader is the Embodiment of What Leadership Means

Recommendation: Fast read Leigh Branham’s The 7 Hidden Reasons Employees Leave. This book makes a great reading for managers and leaders who will need to scratch beneath the surface to recognize unhappy employees before it’s too late, and then engage their employees better and retain their top talent.

While many of the book’s themes may appear familiar, The 7 Hidden Reasons discuses many ideas and “engagement practices” in great specificity to help managers and leaders keep their antennae up for signs of bitterness and discontent, and correct before they lose their best and brightest people. This practical tome can also help employees discuss and resolve their needs and desires.

Developing a deep understanding of what causes employees to lose motivation, disengage, and leave cannot be ignored or overlooked. Managers and leaders who can resolve the divergence that employees feel between their personal values and the best interests of their businesses will gain immeasurably by having a highly engaged and productive workforce.

One of the Tests of Leadership is the Ability to Sniff out a Fire Quickly

One of the tests of leadership is the ability to recognize a problem before it becomes a disaster

I’ve previously stressed the importance of problem-finding as an intellectual skill. I’ve also highlighted why risk analysis and risk reduction should be one of the primary goals of any intellectual process. In this article, I’ll write about being proactive in identifying problems before they evolve into crises.

How Wells Fargo Failed to Recognize a Problem and Address it before it Became a Bigger Problem

As the Wells Fargo accounts scandal unfolded, it was clear that Wells Fargo’s leadership was well aware of the burgeoning problems early on, but failed to act decisively and nip the problem in the bud.

Given impossible sales quotas to reach, Wells Fargo’s “high pressure sales culture” opened as many as two million bank and credit card accounts on behalf of its customers without their consent. Employees were rebuked or even fired for not meeting aggressive cross-selling targets.

Human nature is such that high-pressure demands can deplete the willpower people need to act morally and resist temptations. And such demanding circumstances encourage people to go into defensive mode, engage in self-interested behaviors, and consider only short term benefits and dangers.

Leadership Lessons from the Wells Fargo Accounts Scandal: “A Stitch in Time Indeed Saves Nine”

Leadership Lessons from the Wells Fargo Accounts Scandal Wells Fargo’s leadership reportedly had data about ethical breaches, but they ignored or misjudged the impact of the problem. Wells Fargo even held a two-day ethics workshop in 2014 unequivocally telling their employees not to do that. As per an internal review, managers knew that 1% of employees had been fired for “sales integrity” violations.

Wells Fargo’s leadership didn’t act quickly and decisively to mitigate the effects of the crisis. Warren Buffett, one of the Wells Fargo’s biggest investors, summarized this leadership inaction at the 2017 Berkshire Hathaway annual meeting:

There were three very significant mistakes, but there was one that was worse than all the others … The main problem was that they didn’t act when they learned about it … at some point if there’s a major problem, the CEO will get wind of it. And at that moment, that’s the key to everything, because the CEO has to act. It was a huge, huge, huge error if they were getting, and I’m sure they were getting, some communications and they ignored them or they just sent them back down to somebody down below.

Leadership: “Only the Paranoid Survive”

Andy Grove (1936–2016,) the illustrious cofounder and CEO of Intel, was a famous worrier. At Intel, the focal point of Grove’s leadership style was worry and skepticism. He believed that business success contains the seeds of its own destruction, and that in order for an organization to have longevity, it needs to continue to worry about the future.

'Only the Paranoid Survive' by Andrew S. Grove (ISBN 0385483821) Grove’s principle was immortalized in his famous proclamation, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” He eloquently explained his worrisome mantra in his bestselling corporate memoir, Only the Paranoid Survive (1996.) He wrote in the preface:

The things I tend to be paranoid about vary. I worry about products getting screwed up, and I worry about products getting introduced prematurely. I worry about factories not performing well, and I worry about having too many factories. I worry about hiring the right people, and I worry about morale slacking off. And, of course, I worry about competitors. I worry about other people figuring out how to do what we do better or cheaper, and displacing us with our customers.

At Intel, worrying about the future created a culture of triumph that propelled change and innovation. Grove never let Intel rest on its laurels and led the company to break boundaries in microprocessor innovation. During his tenure as CEO from 1987—98, Intel’s stock price rose 32% a year. Grove also said, “A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.”

Idea for Impact: Learn to Sniff out a Fire Better than Anyone Does

The principal tasks of leadership are (1) identifying the biggest risks and opportunities, and (2) allocating organizational resources. Therefore, one of the tests of leadership is the ability to recognize a problem before it becomes a disaster. If identified and addressed early, nearly any problem can be resolved in a way that is beneficial for everyone involved.

Many leaders tend to be reactionary—they claim, “why fix something that isn’t broken.” Even when they see an impending problem, they may assume that the problem “isn’t that big of a deal” and wish the problem will just go away. Alas, many problems never go away; they only get worse.

To become a good leader, be paranoid—always assume that “there’s no smoke without fire.” If, according to Murphy’s Law, everything that can go wrong will go wrong, the paranoid leader has an advantage.

Whenever you are doing anything, have your eyes on the possibility of potential problems and actively mitigate those risks. Never allow a problem to reach gigantic proportions because you can and must recognize and fix it in its early stages.

As the medieval French philosopher and logician Peter Abelard (1079–1142) wrote, “The beginning of wisdom is found in doubting; by doubting we come to the question, and by seeking we may come upon the truth.”

Bad Customers Are Bad for Your Business

Herb Kelleher: “Dear Mrs. Crabapple, We will miss you.”

Herb Kelleher of Southwest AirlinesSouthwest Airlines is a paragon of superlative customer service. Southwest’s happy and engaged employees routinely go out of their way to delight their customers. In spite of such remarkable devotion to customer satisfaction, there have been times when Southwest had to decide that some customers were just wrong for their business.

In the very entertaining and enlightening Nuts!: Southwest Airlines’ Crazy Recipe for Business and Personal Success, authors Kevin and Jackie Freiberg narrate how Southwest had to let go of a customer who couldn’t be less satisfied with her travel experience. This customer relations-story is best appreciated in light of the fun-loving and gregarious nature of Southwest’s legendary founder and ex-Chairman/CEO Herb Kelleher.

'Nuts- Southwest Airlines' by Kevin and Jackie Freiberg (ISBN 0767901843) A woman who frequently flew on Southwest, was constantly disappointed with every aspect of the company’s operation. In fact, she became known as the “Pen Pal” because after every flight she wrote in with a complaint.

She didn’t like the fact that the company didn’t assign seats; she didn’t like the absence of a first-class section; she didn’t like not having a meal in flight; she didn’t like Southwest’s boarding procedure; she didn’t like the flight attendants’ sporty uniforms and the casual atmosphere.

Her last letter, reciting a litany of complaints, momentarily stumped Southwest’s customer relations people. They bumped it up to Herb’s desk, with a note: ‘This one’s yours.’

In sixty seconds, Kelleher wrote back and said, ‘Dear Mrs. Crabapple, We will miss you. Love, Herb.’

Bad Customers: Wrong for Your Business, Wrong for Your Employees

Bad Customers: Wrong for Your Business, Wrong for Your Employees

Customers are the lifeblood of any business. Customer satisfaction begets loyalty, and loyalty begets revenues and profits. Businesses can therefore never place too much emphasis on their customers.

However, with slogans like “the customer is always right,” many businesses fall into the trap—and the slippery slope—of trying to satisfy every customer’s every wish.

Although your business may need all its customers—even the irksome ones—the reality is that some customers can actually be bad for your business. You can’t sustainably run a business without trying to satisfy every customer—particularly those cranky, annoying, or unreasonable ones.

Be wary of customers that fall into these categories:

  • Customers who require high maintenance but cannot be charged more
  • Customers whose demand for price destroys your profitability
  • Customers who want a lot more (better product, better service, better schedule) but are tightfisted
  • Customers who require supplementary services or products (especially those that are not part of your business’s core competencies) and tailored solutions that you don’t provide and can’t profitably offer to the rest of your customer base
  • Customers who don’t subscribe into the future vision of your business or your industry, which they’ll need to strategically commit to as some point in the future
  • Customers who tend to be aggressive and hostile, and disrespectful to your employees, regardless of how well they serve the customers

Strategic Customer Management Involves Being Tough Minded with Some Customers

Strategic Customer ManagementConsidering your long-term business goals, sifting through who should and who shouldn’t be your customers is an important element of strategic leadership.

With every product or service you offer, focus on who you want your customer to be, what expectations they have of you, and what you can profitably provide to them. Once you have figured that out, customers who don’t fit well need to be managed judiciously and decisively.

Without strategic customer management, you run a risk of disrupting your ability to converge around the needs of your principal customer base.

Remember the notion of opportunity costevery ‘no’ is a ‘yes’ to something important.

Idea for Impact: Let Go of Some of Your Troublesome Customers

Sometimes, it may be better to lose certain customers by turning them down than to dilute your ability to serve other valuable customers profitably. Stop trying to delight every customer. Take a hard look at the past, current, and future of every customer and prioritize whom you can going to serve better and more successfully.