Right Attitudes

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Managing People

Incentives Matter

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Incentives are Powerful Extrinsic Motivators

The bedrock premise of economics is that incentives matter. This is a powerful device because it applies to almost everything that humans do.

Changes in incentives—monetary and nonmonetary—can sway human behavior in foreseeable ways.

For instance, if a resource becomes more expensive or scarce, people will be less likely to choose it. Higher prices will reduce the quantity of goods sold. Fewer people visit outdoor recreational areas on chilly and rainy days. Whenever fuel prices soar through the roof over a prolonged period, consumers buy less gasoline—they eliminate less important trips, carpool more, and purchase fuel-efficient cars.

Incentives Shape Behavior

If the payback from a specific choice increases, people are more likely to choose it. Students focus in classes when their professors declare what course material will be on the examinations. Pedestrians are more prone to leaning down and picking up a quarter than they would a penny. Traditional incentive systems for executives give rise to corporate “short-termism”—executives’ annual bonuses are often awarded for achieving targets that are insubstantially linked to long-term value creation.

Incentives shape behavior. The economics of wrongdoing and crime suggest that fines be increased to offset the rewards from lawbreaking—for example, traffic fines for speeding are typically doubled in construction zones. Ryanair, Ireland’s pioneering discount airline, purposefully uses exasperating fees for checked bags, airport check-ins, and printing boarding passes to “reshape passenger behavior” and focus on getting passengers punctually to their destinations with the least overhead costs.

Incentives Can Backfire Even If Launched with the Best of Intentions

The “incentives matter” framework of economics explains why bad behavior happens whenever the payoff for such behavior is high and the odds of getting caught and reprimanded are low.

People will scheme—even perpetrate fraud—to achieve the incentives they’re offered. If targets are impracticable and employees realize that they can achieve those targets by cheating, then they will cheat.

Incentive structures are partially to blame for the recent Wells Fargo accounts scandal. Even if Wells Fargo established incentive arrangements with the best of intentions, it tied a substantial percentage of employee compensation to immoderate sales targets. This compelled employees to open millions of sham bank accounts and credit cards in customers’ names, infringing on their trust, and costing them millions of dollars in fees for services they did not willingly sign-up for. As this case makes obvious, incentives intended to stimulate people to do their best can sometimes push them to do their worst.

Idea for Impact: A Little Incentive Goes a Long Way

Incentives matter. They influence choices that humans make. Changes in incentives influence their choices. However, designing effective incentives is a painstakingly difficult problem. Do not underestimate or ignore potential undesired results—increase in dishonest behavior, over-focus on one area while overlooking other parts of the business, imprudent risk-taking, deterioration of organizational culture, and diminished intrinsic motivation.

Wondering what to read next?

  1. Numbers Games: Summary of The Tyranny of Metrics by Jerry Muller
  2. People Do What You Inspect, Not What You Expect
  3. When Work Becomes a Metric, Metrics Risk Becoming the Work: A Case Study of the Stakhanovite Movement
  4. Rewards and Incentives Can Backfire
  5. Be Careful What You Count: The Perils of Measuring the Wrong Thing

Moral Self-Licensing: Do Good Deeds Make People Act Bad?

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When People Do Something ‘Good’ They Feel Licensed to Do Something ‘Bad’ Later

Being—and being seen—as moral, ethical, and principled is an important part of people’s self-concept.

Social psychologists have studied the tendency of people using their prior moral actions to license future morally questionable actions. According to these studies, prior to making morally important decisions, people may survey their previous moral actions. If they recollect engaging in virtuous moral behavior in the past, they may subsequently become less bothered about engaging in morally questionable behavior.

Prior Actions Can Affect Individuals’ Future Behavior

Past good deeds can license people to engage in behaviors that are immoral, unethical, if not problematic—behaviors that they would otherwise avoid for fear of feeling or appearing immoral. The deep-seated human tendency that makes people feel entitled to do something less moral because they’ve done something moral previously is called “moral self-licensing.”

Psychologists reason that people’s previous actions may cause them to feel more self-possessed in their own moral self-worth. As a result, this claim licenses their choice of a more self-indulgent moral choice.

Conversely, when people appear immoral or devious to others, they subsequently take up positive actions to restore their moral image. Psychologists identify this as “compensation or cleansing.”

When ‘Good’ Behavior Supposedly Counteracts Doing Something ‘Bad’

Moral self-licensing has been demonstrated in several realms of human judgment. However, in my opinion, much of the cause-and-effect narratives seem ambiguous. For instance,

  • In a set of pioneering studies, participants who established their racial non-prejudiced attitudes by endorsing President Obama or through selecting a black person for a consulting firm job were subsequently more likely to make pro-white decisions.
  • In one test, after subjects were given a chance to condemn sexist statements, they were found to be subsequently more likely to support hiring a man in a male-dominated profession.
  • One study on consumer behavior suggested that shoppers who brought their own bags felt licensed to buy more junk food.

Contribution Ethic and “Prospective Moral Licensing”

A phenomenon related to moral self-licensing is “contribution ethic” or the “moral credential effect.” When people feel they’ve done their fair share for some noble cause, they decide they need do no more. In one study, after people participated in a pro-social deeds (e.g., doing something good for the cause of the environment,) they felt licensed to behave more selfishly later (e.g., donating less to an environmental program). Another study showed that people who drive hybrid cars tend to get more tickets and cause more accidents than do drivers of conventional cars.

Some studies have suggested that just thinking about past moral behavior or writing about oneself as a moral person can decrease the likelihood of subsequently performing altruistic acts—such as decreasing contributions to charitable causes or being less engaging in cooperative behavior towards friends and colleagues.

Finally, simply planning to do good later can allow people to be bad now. Some studies suggest that when people merely plan to engage in a moral behavior in the future, they feel licensed to respond in a morally questionable way in the present. Psychologists identify this as “prospective moral licensing.”

Idea for Impact: Past Moral Deeds Could Make People Do Morally Wrong Things

Part of becoming wise to the ways of the world and getting along with people is understanding the many peculiarities of human behavior. Learning why people feel licensed to engage in potentially immoral behavior given their demonstrated moral behavior allows for a better understanding of the world in which we live.

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

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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. 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.”

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  3. The Spectacular Rise and Fall of Avon’s Andrea Jung // Book Summary of Deborrah Himsel’s ‘Beauty Queen’
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Our Vision of What Our Parents Achieved Influences Our Life Goals: The Psychic Contract

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Understanding Others’ Motivations is a Key to Building Better Relationships

Understanding others’ deep-held motivations involves recognizing what drives them, why and how they want to work, work styles they may adopt in various circumstances, and what levers you have to motivate them.

Take for example Abraham Maslow’s Hierarchy of Needs, a motivation hypothesis used widely for several decades now. Represented as a pyramid, this hypothesis proposes that people are motivated to fulfill basic subconscious desires such as food and shelter before trying to fulfill higher-level needs such as affection and prestige. Even though academics have extensively debated its specifics, Maslow’s Hierarchy of Needs has provided a handy framework to value the multifaceted composition of human motivation and to understand how to engage others.

The Relationship between Your Own Vision of Success and Your Parental Influence

'The Anatomy of a Great Executive' by John Wareham (ISBN 0887305059) One less-known framework for understanding the provenance of people’s life goals—their deep-seated aspirations for want to achieve in life—is the “Psychic Contract” hypothesis, a concept that dominates The Anatomy of a Great Executive (1991) by John Wareham, a leadership psychologist from New Zealand.

According to Wareham, a psychic contract is a set of “deals” we subconsciously strike with our parents early in life. Our life-goals are defined primarily by our own vision of what our parents achieved—and what they failed to achieve:

As we grow we absorb the values of our parents, and are conditioned to improve (albeit marginally) upon their achievements. We strike a psychic contract with them whereby “success” in life is defined by the attainment of a similar social positioning, which we later embark upon attaining, sometimes very consciously, but often entirely unconsciously.

Throughout our lives, we unintentionally adhere to our psychic contracts, despite the limitations they place on us. We use our psychic contracts to not only define and approach our life goals but also think about how we measure success.

We consciously measure success in terms of milestones and standards instilled by our parents.

As a rule of thumb, about three quarters or more of people in westernized culture seek first to equal, then marginally to improve upon the lifestyle or status level perceived to exist in the childhood home.

Psychic Contract Theory: Children are Programmed to Want to Do as Well as or Better Than Their Parents

In The Anatomy of a Great Executive, Wareham goes into depth explaining how we can know our own psychic contracts and how we can reset our goals to give ourselves permission to succeed. Here are some other prominent learning points:

  • Our psychic contract is based on our birth order, our parents’ birth order, and roles we play relative to our parents in our families.
  • The so-called “prime parental injunction” sits at the heart of our conscious. We go through our lives trying to become the people our parents wanted us to be. Even people who spend their lives trying to become exactly the opposite of what their parents wished are still influenced by this injunction.
  • Every person has a pre-programmed financial comfort level. Most of us strive to reach this level; but once there, we slow down—not because we are lazy, but because we have fulfilled our inner desires and don’t need more. Wareham cites the example of commission-based sales people who, after earning adequate commission to reach their financial comfort level, tend to be less aggressive in selling cars to customers for the rest of the month.

Idea for Impact: “Psychic Contract” is a handy and thought provoking—if unsubstantiated—hypothesis to understand how your and other people’s deep-seated life goals are established. It can give you one more data point in trying to figure people out.

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Five Signs of Excessive Confidence

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Confidence is generally a respectable and necessary workplace trait.

However, there is a darker side to confidence.

People who display overconfidence, hubris, and narcissism engage in self-destructive behaviors at work because their self-aggrandizement blinds them from their personal judgment and their managerial and leadership performance.

If you believe you may be displaying any of the following signs of excessive confidence, you need some coaching and feedback. Ask a trusted friend, colleague, or mentor for some honest feedback. Work to change your attitude—promptly.

  1. You tend to believe that your ideas are the only ones worth acting on. When others contribute ideas and suggestions, you tend to turn them off while promoting only the ideas that you come up with. You tend to get angry with others for their unwise and impractical suggestions. You are resistant to learning from others or from previous experiences.
  2. You tend to act on solutions without input from others. You believe that it is up to only you to supply new ideas and solve problems. You are convinced that you are the only one who knows as much as necessary to do the right thing. When others summon up ideas and suggest watch-outs, you tend to brush them off with “I know that” statements.
  3. 'What Got You Here Wont Get You There' by Marshall Goldsmith (ISBN 1401301304) You tend to express an opinion on everything—even when the topic of interest is outside your area of expertise. You act as if you’ve accepted the reality that you have to work with less-qualified people who just can’t get the right things the right way (i.e. your way.) If only your opinions were considered and if you had your way, your team and company would do “so much better.”
  4. You tend to defend your mistakes and your failures. You don’t recognize your limitations and the mistakes of your ways. You can’t take help. You are closed off to others’ feedback and suggestions for change.
  5. You tend to externalize blame. You’re often a victim of everyone else’s failures or a victim of external circumstances. You gripe that others just don’t understand you or they aren’t qualified enough to see the wisdom of your ways.

If you can’t recognize and accept the problems related to how your behavior comes across to other people, you may be derailing your managerial and leadership potential.

Idea for Impact: Greatness lies in balancing self-assurance with self-effacement. I recommend leadership coach extraordinaire Marshall Goldsmith’s outstanding What Got You Here Won’t Get You There. Addressing already-successful people, Goldsmith describes how personality traits that bring you initial career success could hold you back from going further!

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  4. Power Corrupts, and Power Attracts the Corruptible
  5. Here’s How to Improve Your Conversational Skills

20 Reasons People Don’t Change

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If you have trouble getting people to change, perhaps one—or more—of the following reasons are to blame:

  1. They don’t want to change … they find reassurance in the status quo
  2. Their environment is holding them back
  3. They’ve tried to change in the past, failed, and have given up
  4. Your coaching / feedback is garbled … the benefits of change are unclear
  5. They don’t react well to criticism
  6. They’re suspicious of your motives (i.e. fear of manipulation)
  7. They see little incentive to change
  8. They don’t know how to change
  9. They have no role models
  10. There’s no support (or resources) for change
  11. Change threatens their self-image
  12. They can’t tell what’s really important
  13. They don’t feel courageous enough … i.e. they fear failure
  14. They don’t feel enough pain yet
  15. They’re overconfident or arrogant
  16. They fear their weaknesses will be exposed
  17. They’re too lazy and undisciplined
  18. Change requires giving up something they presently value
  19. They resist change that’s imposed from outside … i.e. they’re not intrinsically motivated for change
  20. Change undermines their self-confidence

Idea for Impact: Temper your expectations of others. Old habits die hard. Even Einstein’s doctor couldn’t get the great physicist to quit smoking despite his deteriorating health.

Be realistic about changing others’ hearts and minds. If you can learn to accept them for who they are and let go of your conceptions of their perfection, your relationships become more richer.

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  4. The Difference between Directive and Non-Directive Coaching
  5. We’re All Trying to Control Others

Bad Customers Are Bad for Your Business

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

Southwest 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

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

Considering 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 cost—every ‘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.

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  4. How to Manage Overqualified Employees
  5. Find out What Your Customers Want and Give it to Them

You Too Can (and Must) Become Effective // Summary of Peter Drucker’s The Effective Executive

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Peter Drucker (1909–2005) is widely regarded as the most outstanding thinker on the subject of management theory and practice. He was amazingly prolific—he produced 39 volumes on management and leadership and worked right until his death a week before his 96th birthday.

Drucker’s The Practice of Management (1954) played a pivotal role in the recognition of management as a professional discipline. In this influential book (see my summary here,) Drucker explained what management is and how managers do their jobs.

'The Effective Executive' by Peter Drucker (ISBN 0060833459) In his bestselling The Effective Executive (1967,) Drucker defined effectiveness as getting the right things done and efficiency as making resources productive. His pivotal message was that effectiveness must be learned because effectiveness is every manager’s job. That’s what are managers get paid for—“the executive is paid for being effective.” Moreover, “Effective executives know that their subordinates are paid to perform, and not to please their superiors.”

Five Practices of the Effective Executive

Drucker devotes five chapters of The Effective Executive to five practices that have to be acquired to be effective. Introducing these effectiveness practices, Drucker writes, “Whenever I have found a person who—no matter how great in intelligence, industry, imagination, or knowledge—fails to observe these practices, I have also found an executive deficient in effectiveness.”

  • Effectiveness Habit #1—Know Where Time Goes: “Time is the scarcest resource, and unless it is managed nothing else can be managed.” In addition, “Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.” Using the three-step time logging, time analysis, and time budgeting practice, effective executives know where there time goes. They exert themselves to make certain that they invest their time in line with their values and priorities.
  • Effectiveness Habit #2—Focus on Contribution: Whatever your span of responsibilities—supervisory, managerial or leadership—you are accountable to your ‘external’ stakeholders. These stakeholders measure your performance solely by your ability to identify opportunities and get things done through the resources you have. Drucker writes, “Effective executives focus on outward contributions. They gear their efforts to results rather than to work. They start out with the question, ‘What results are expected of me?'” Effective executives have a clear understanding of their contribution and their results.
  • Effectiveness Habit #3: Make Strengths Productive: “Effective executives build on strengths—theirs and others. They do not build on weaknesses. They do not start out with the things they cannot do.” Effective executives understand and build on the strengths of themselves, their team, and their organization to make everyone productive and to eliminate weaknesses. The only weaknesses that have a bearing—and must be remedied—are the ones that hinder effective executives from exercising their strengths.
  • Effectiveness Habit #4: Live Priorities: “Effective executives concentrate on superior performance where superior performance will produce outstanding results. They force themselves to stay within priorities.” Setting priorities is easier; the hard part is sticking to the decision and living the priorities. To get things done, focus on one task at a time or two at the most; three is usually impractical.
  • Effectiveness Habit #5: Systemize Decision-Making: “Effective executives make effective decisions. They know that this is a system—the right steps in the right sequence. They know that to make decisions fast is to make the wrong decisions.” For Drucker, decision-making was a matter of wisdom and sound judgment—making a choice between alternatives but seldom between mere right and mere wrong. “The sooner operating managers learn to make decisions as genuine judgments on risk and uncertainty, the sooner we will overcome one of the basic weaknesses of large organizations—the absence of any training and testing for the decision-making top positions.”

Idea for Impact: Teach yourself to become effective. Commit these five tasks to memory and practice them. Read The Effective Executive—it will have a profound effect on your performance.

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  3. Book Summary of Nicholas Carlson’s ‘Marissa Mayer and the Fight to Save Yahoo!’
  4. Book Summary of Peter Drucker’s ‘The Practice of Management’
  5. A Guide to Your First Management Role // Book Summary of Julie Zhuo’s ‘The Making of a Manager’

What it Takes to Be a Hit with Customers

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  1. Be Trustworthy. One of the most important aspects of being effective at work is earning and upholding others’trust through your actions, not through your words. You earn trust slowly but can lose it in a moment—as Warren Buffett often reiterates, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Idea for Impact: Earn trust by making and honoring your commitments. Do what you commit to. Act with integrity. Do the right things for the right reasons.
  2. Be Responsive. We live in a time and age of “instantaneous gratification.” People want immediate results—without delay or deferment. They don’t expect to wait. And if they have to wait on you, their resentment grows. Alas, responsiveness affects how people perceive you. If you’re slow, your customers will suppose you are indifferent or incompetent. If you respond promptly, they’ll assume you’re proficient and on top of your work. Idea for Impact: Respond immediately to requests unless there is a judicious reason to wait.
  3. Be Strong, But Flexible. Respect the rules and traditions but be adaptable to changing conditions. Be watchful and absorb from whatever you can learn—as General Electric’s celebrated ex-CEO Jack Welch once wrote, “The desire and the ability of an organization to continuously learn from any source—and to rapidly convert this learning into action—is its ultimate competitive advantage.” Idea for Impact: Flexibility with rules can be pragmatic in its own right. Learn to make rational decisions by balancing facts and emotions.
  4. Be Realistic, Not Overly Optimistic. Self-help gurus and the media have endlessly touted optimism as the “winning formula to success.” This obsession with cheerfulness has reinforced a false sense of realism and pragmatism. Optimists tend to overlook the reality—they develop a false sense of hope and become too attached to the possibility of positive outcomes. Unfortunately, realists are branded as skeptics and skeptics are quickly shunned as outcasts. Idea for Impact: Take an honest and levelheaded view, no matter what the problem. Embrace the possibility of failure. Plan for the downside. Don’t get caught up in trivial details.
  5. Be Likeable and Interested. Highly competent but unlikeable people do not succeed as well as their fairly competent but likeable counterparts. The American poet and memoirist Maya Angelou aptly said, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” Idea for Impact: Be pleasant, enthusiastic, and friendly—make eye contact, smile, and say ‘hello’ more. Listen. Be open and approachable. Appreciate the individuality of people. Try to be interested, not just interesting.
  6. Be a Good Salesperson. Much of success in life—from getting a Starbucks barista to make a special no-whip, extra-foam latte with half a packet of Splenda to finding a spouse—is really about selling yourself. Every selling situation involves making a connection with an individual who likes and trusts you. An anonymous sales guru once said, “All things being equal, most people would rather buy from somebody they like… and that’s true even when all things aren’t equal.” Idea for Impact: It is useless to work hard and be creative unless you can also sell what you create. Learn to be persuasive. You can’t just talk people into things.
  7. Be Visible and Communicate Candidly. How you identify and respond to a problem or a crisis is the ultimate test of your character. If you do not communicate frequently, people will develop their own perceptions of the problem and its implications. Knowing when to step up your communications efforts to the right levels during difficulties can be a powerful tool in problem solving. Idea for Impact: Keep your eyes open for customers’ inconveniences, difficulties, and troubles as creative problems to be solved. Focus on problem solving. Be visible. Communicate and lead from the front. Learn how to handle upset customers.

Postscript: This Harvard Business Review article argues that, more than anything else, customers want just a reasonable solution to their expectations. Delighting them by “exceeding their expectations” hardly enhances customer loyalty.

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Don’t Be Interesting—Be Interested!

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Management Guru Jim Collins’s “Golden Rule”

In the December 2005 issue of the now-discontinued Business 2.0 magazine, 30 business visionaries disclosed their “golden rules”—attitudes they swear by more than any other. Jim Collins, the renowned leadership consultant and author of such bestselling management books as Good to Great and Built to Last, recollected a lesson he learned from his mentor, the American intellectual and public servant John W. Gardner:

One day early in my faculty teaching career, John Gardner sat me down. “It occurs to me, Jim, that you spend too much time trying to be interesting,” he said. “Why don’t you invest more time being interested?”

If you want to have an interesting dinner conversation, be interested. If you want to have interesting things to write, be interested. If you want to meet interesting people, be interested in the people you meet—their lives, their history, their story. Where are they from? How did they get here? What have they learned? By practicing the art of being interested, the majority of people can become fascinating teachers; nearly everyone has an interesting story to tell.

I can’t say that I live this rule perfectly. When tired, I find that I spend more time trying to be interesting than exercising the discipline of asking genuine questions. But whenever I remember Gardner’s golden rule—whenever I come at any situation with an interested and curious mind—life becomes much more interesting for everyone at the table.

The Technique to Become the Most Interesting Person in the Room is to Find Others Interesting

In the conduct of life, people tend to focus more on becoming more interesting—i.e., impressing others with their personae and their stories. While trying to become more interesting is a worthwhile pursuit, it is certainly not everything in becoming accepted and well-liked. Becoming likeable requires creating lasting impressions in others by becoming genuinely interested in them.

John Gardner’s advice (via Jim Collins) echoes self-improvement pioneer Dale Carnegie’s legendary advice that the ticket to one’s success in life is one’s ability to make others feel good about themselves. In his masterful manual on people skills, How to Win Friends & Influence People, Carnegie writes, “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.”

It is a common fallacy to assume that you must just be an interesting person to get people to like you. Observe this human tendency in the next networking meeting or social gathering you attend. Most people tend to be absorbed in just one thing: being interesting themselves—blabbing “I did this … I did that … I like this … I’ve been there” and offering bits of information that nobody else but them really cares about.

How to Build a Bit of Intimacy, Even in a Brief Conversation

Making others like you amounts to making them feel special about themselves—making them feel that you really “get” them. The next time you meet someone new at a social setting, try this easy technique to be more interested.

  • The key to become absorbed in a conversation is to focus on being curious about others. So, tell yourself repetitively, “This seems to the most interesting person in the world. Let me discover why.” Look for opportunities to connect.
  • When you meet someone new, make eye contact and smile. Introduce yourself with a simple “Hi, my name is Joanna Kovaleski. I am Megan’s real estate agent.”
  • Pay attention and make them feel like they are the only people in the room.
  • Ask a question or two about the person before talking about yourself. “How do you know Megan and Eric?” “Is this your first time in Chicago?” As I’ve written previously, chatting with somebody in socializing situations should be less about discerning the details of the other’s life and more about building a bit of familiarity to initiate stimulating conversations, debates, discussions, and exchange of ideas about topics of mutual interest. These prospects will all be missed if your initial interaction starts with annoying cross-examinations such as “What do you do for a living?”
  • Ask a follow-up question based on what they have just said. Try to understand who they are and why they are there. Learn about their interests and hobbies.
  • Say more about yourself. Use what you’ve just learned about the other person so far to selectively highlight anything you have in common.
  • Then, ask one question to bring the focus back to the other person.
  • People love to talk about themselves; so, make them. Everyone’s got a story to tell.
  • Don’t talk too much or too little. Try taking your focus off yourself.

Idea for Impact: Become Genuinely Interested in Others and Make Them Like You

'How to Win Friends & Influence People' by Dale Carnegie (ISBN 0671027034) To be interested in other people—and consequently get them interested in you—is a significant social skill you must develop and hone. But don’t feign. As Carnegie cautions in How to Win Friends & Influence People, “The principles … will work only when they come from the heart. I am not advocating a bag of tricks; I am talking about a new way of life.”

The following books have helped me with improve my socializing skills. Perhaps you’ll find them useful too.

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