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Keep the Trust

March 10, 2010 Leave a comment

We hear a lot about “trust” these days and how organizations (individuals too) can spend years building trust and then destroy it with one bad tweet, social networking blunder, reply all, or product failure. Mats Lederhausen, founder of BE-CAUSE, said in a recent interview, “Trust is perhaps the most important currency in business.”

I certainly would agree with that, but has that really changed all that much over the decades? Who remembers the Tylenol Crisis of 1982? How about the Exxon Valdez oil spill in 1989? Fast forward 20 years and Toyota is up to their neck in alligators.

Today we have a 24 hour news cycle and access to instant information via social networking sites and portable communication devices. Back in the ‘80s, CNN was just coming on the airwaves and widespread mobile communications was still a bit off in the future. Is the lightning fast information flow of today altering the landscape with regard to the public perceptions of Toyota, or is it how the organization is responding to events that is really making the difference?

In my mind, it’s not the speed of the information flow, but how each organization responds to the “crisis” at hand that determines the trust they will be able to maintain. The Tylenol and Exxon stories of the ‘80’s were every bit as big as the Toyota story is today. The only difference is, they didn’t exist in an environment of 24/7 news channels, internet news pages or being tweeted and texted.

Johnson & Johnson was able to maintain a good degree of trust by staying true to their principles via a company credo crafted in 1943 by Robert Wood Johnson that, in part, said “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.” This led them to immediately take full responsibility and pull all bottles of Tylenol from the market, even though the fault was positively not theirs. They set up 1-800 numbers and held numerous major press conferences to keep the public informed. Due to these actions the trust levels J&J was able to maintain allowed them to re-introduce the product 6 weeks after the crisis began.

In contrast, Exxon was slow to respond, engaged in an ineffective communication strategy and in the end refused to accept responsibility for the accident. They also were in litigation over the incident and finally took their case all the way to the Supreme Court in 2008. The public perception of this incident was far different from that of the Tylenol crisis.

Meanwhile, back at Toyota, the story is getting away from them fast. Almost daily we hear new stories about runaway cars, new recalls and now employees are coming out indicating the company was taking shortcuts and that management didn’t listen. Will Toyota be perceived as an Exxon or a Johnson & Johnson? Is the speed of communication really affecting the story or is it how the company is responding? I personally would argue it’s mostly the latter. I don’t think it’s too late to right the ship, but they need to find a real solution to problem.

An Interesting question to ponder at this point would be, which organization do you trust more J&J, Exxon or Toyota?

Categories: Leadership

Lets go Old School…

March 2, 2010 Leave a comment

Management, in all business and organizational activity, is the act of getting people together to accomplish desired goals and objectives.

In the best of times, the ability to manage effectively is the factor that shepherds the most profit, production, and talent out of the available resources. In the worst of times, that ability or inability can be the reason a company comes out the other end whole or succumbs to that which we all fear.

No matter the business climate of the time, we can assure ourselves that we’re able to navigate the difficulties in management if we just pay attention to an ‘old-school’ philosophy. Specifically, the recognition that there are two major tools in management’s tool belt – direction and support. For clarity, direction is specific, detailed oriented instructions or tasks, while support is defined by the giving of authority or tools necessary for effectiveness.

At first blush this rule of thought may seem overly simplistic. Simple yes, but easy…absolutely not! Whether you’re a CEO, a director, or front-line supervisor, the understanding and execution of which, how much and when to use either of these tools is critical in keeping each employee and the organization functioning at their highest levels.

The goal of management should be to create an environment that is motivating for every employee and, like athletes on a team, not everyone’s needs are the same. From Greg Greenhorn to Charlie CFO, everyone in an organization is somewhere on his/her growth continuum, and it’s up to their manager to identify whether they need more direction or more support. If a seasoned employee is given too much direction, he/she will feel stifled and micro-managed. Conversely, if a newer employee is not given enough direction, they’ll feel lost and ineffective.

When management correctly identifies the needs of its associates and uses their tools effectively…WHALLAH, they’ve created an environment that will be motivating for each employee. From personal experience, I have learned that when I go into the kitchen with dinner cooking, using a “Directive” communication style doesn’t go so well for me…Supportive is by far a better choice.

So take a look at your workforce and ask yourself if you’re managing (direction vs. support) them correctly. Identify where they are on their competency continuum and make it a point to understand what they need to be effective. By taking the time to go back to ‘old-school’, you’ll find you have created a motivating environment for each of your associates and done what is necessary to ensure that during good times and bad you’ve given your company the best chance for success.

Categories: Leadership