The biggest lesson learned in Q4 of 2009?….that my blog writing is inversely correlated to our business volume. But I’m resolved on this first working day of 2010 to spew more consistent material on these pages going forward. Our goal with this blog is to capture great ideas for managing and leading great workplaces. Cheers to a new year!
My 7 year old son has turned me into a fan of NFL football. And although I often give rabid sports fans grief about their insatiable appetite for meaningless stats and their fantasy leagues—I found a moment of clarity last night during the Dolphins-Colts game.
I passively watched the second half of the game. It was remarkable how much consensus the commentators had about how strong the Dolphins were playing—and how tired the Colts appeared. The Dolphins’ creative running game kept the ball in the hands of their offense all night (45:07 of the 60 minutes, to be exact). The Dolphins converted an impressive 15 of 21 3rd downs. The Dophins this; the Dolphins that. Had I closed my eyes and merely listened, I would have guessed the Dolphins had a 30 point lead. But they didn’t. In fact, the score was tied much of the game—and the Dolphins never owned a lead greater than 7 points.
The Colts only needed 3 plays late in the 4th quarter to march down the field and score the game-winning points.
Commentators—like many consultants—are paid to deliver data in a manner that creates drama. Drama entices. It excites. It creates stickiness. The best commentators (and consultants) are the best storytellers. The downside is that data often obfuscates the only story that matters—the score. The wrong metrics—or too many metrics—focus executive attention on symptoms rather than solutions.
Purveyors of workplace analytics (including my firm) seem to have a message that says “it’s not whether you win or lose, it’s how you play the game.” While that’s a message we teach our kids—it’s childishly idealistic in business. And by “childishly idealistic”, I mean BULLCRAP. We say things like, “treat your people like they’re your most important asset” and “you need a recruitment strategy that elevates your employer brand and attracts THE BEST talent.” If these aphorisms had substance, Lehman Brothers and Circuit City wouldn’t be confined to a graveyard of former “Most Admired” companies.
“Analytics” is all the rage today. Yesterday it was “Scorecards.” Our infatuation with quantitative measurement can be healthy (especially for my business). Data-based decision making trumps leadership-by-guessing. But remember, data is not art. Data do not exist to look pretty and entertain. Data is only as good as the decisions they drive. At the end of the day, the most meaningful scorecard looks something like this:
I sat next to a rancher last week on a flight to Seattle. Despite growing up in Nebraska, I know very little about farming or ranching. So I riddled him with questions about his business. He told me about a recent hailstorm that killed 3 of his cattle. Then he said something that I wrote down.
“The first thing I do when a storm clears is tend to my flock…a storm can have devastating consequences for a herd without shelter. The sooner I assess their strength, the fewer losses the storm will cause.”
I thought about that for a second…..then replied, “Dale, you and I are in the same business after all.”
The economic storm of 2008-09 has cleared. Among the S&P 500 companies, 487 have stock prices higher than the March lows; 128 have seen their stock double; and 39 have seen their stock triple.
But while the newspapers focus on the 9.7% of unemployed Americans, business leaders have the responsibility of worrying about the 90.3% that ARE employed. Has your “flock” suffered “devastating consequences” as a result of the storm? How would you know?
If you’ve never surveyed your flock before, this is the opportune time to do so. Waiting will cost you money and worse–some of your key people.
Check out this headline today, “Companies Hoard Record Cash as Economic Fears Linger”.
Wait a minute. Wasn’t this recession brought about by frozen credit and illiquidity? Isn’t CASH supposed to be KING? Do I need to pull out my pile of Wall Street Journals from the first quarter that had hundreds of headlines about companies laying off workers because of cash shortage?
There’s a lesson here for talent managers. When the pendulum swings, it can pick up momentum fast. Todays headlines usually become the mirror image of headlines to come.
What doomsday headlines stress us out today? Unemployment Near 10%. Face of Health Care Anticipates Dramatic Change. New Legislation Proposed to Make Unionization Easier. Consider for a moment, that the exact reverse of each of these headlines may make the papers in six months or less.
Our job as leaders is NOT ONLY to manage today, but to prepare for tomorrow. We don’t have to forecast the exact timing of the pendulum swing–we simply have to be prepared for its inevitability.
Noah didn’t wait for rain to begin building the ark.
Lots of good information to cheer about in the jobs report released this morning.
–Fewer job losses in July than expected
–Total Unemployment rate declinded from 9.5% to 9.4%
–Average earnings increased
–Previously reported job loss numbers for May and June were even revised down slightly
It’s impossible to say if this is a blip or a trend. Most of the smartest economic minds predicted >10% was all-but-certain. But economic metrics never do what the majority think they will do.
Therefore if 9.5% unemployment marks a “bottom”–I’ve got to stop writing and start looking more seriously at some of the resumes I’ve received.
Our June 30 blog post predicted July would be an “up” month for the Dow Jones Industrial Average. And “up” was an understatement as we saw the stock index climb 8.6% in a single month. That improves the record of our linkage analysis between our Employee Engagement Index and the Dow–successfully predicting movements in 12 of the last 15 months.
Unfortunately our Engagement Index showed a slight decline between April and March. Due to the 4-month lag in our model, we’re expecting a corresponding decline in the Dow for August.
CNBC, are you listening?
Tell Tony Hsieh that corporate culture and workplace engagement don’t matter. He’s likely to laugh in your face. Afterall, his “culture” just fetched $840MM in a sale to Amazon.
Selling shoes online–in and of itself–is a business plan doomed for failure (worse than the infamous Pets.com). But Hsieh was quick to proclaim that his company was never in the business of selling shoes. He was more enamored with the idea of organizing employees around a philosophy of “happiness.” “Happiness” wasn’t a reference to mild satisfaction–rather a true metaphysical condition. And he connected the dots between happiness and customer experience. That connection is what Amazon is buying for $840 million.
While Amazon has been highly acquisitive in its history, it buys very few competing online retailers. Why? Because it doesn’t have to. It’s better at putting competitors out of business. But Amazon understands that Zappos has competitive advantages that go far beyond warehouses and websites. It has a dynamic team of 1200 employees (most of which make just more than minimum wage) that see their job as something much more. Why else would their employee handbook be comprised of employee-submitted essays describing the company (which is currently 500 pages long)?
What’s your culture worth?
Most mornings, my first stop when arriving at the office is the fridge. I’m usually dropping off my protein shake mixer or grabbing an apple. Last Tuesday was no different. Although when I opened the fridge, I saw a 4-pack of Activia yogurt.
“Wow! Who brought the Activia?”………then recalling a Saturday Night Live spoof on the product, I recanted “….or was that a personal question?”
A week later, the 4-pack sits untouched–and the speculation is thick.
The moral of the story is that sometimes the line between an open, social office environment and one that is judgmental and isolating is very, very gray.
Check out the SNL spoof.
My sincere apologies to the team member in the office with the GI issue.
With the stock market’s books closed for June–it turns out our Employee Engagement Index (EEI) did not do its job this month.
As we’ve been reporting, we found a 4 month predictive relationship between our EEI and movement in the Dow. In late May, we used the Index to predict “up” months for the Dow in June and July.
Turns out the Dow was down 0.6% for June (or 54 points). It was close–the Dow was in positive territory early in the session. But no cigar. The good news is that Q2 was the best quarter for stocks since 1998.
This leaves our EEI scorecard at 11 of 14 months. We posted a brief article about the EEI vs Dow relationship on our website. Download here.
A few weeks ago I commented on Google creating internal software to predict which employees were a flight risk. Another article published by the WSJ June 18 talks about organizational changes Google is making to keep new product ideas from escaping to Start-Up-Land.
Perhaps what is most interesting about Google’s recent press is its singular focus on internal talent and retention issues. Meanwhile, news of Google’s most interesting product release–Google Wave–is relegated to the backwaters of YouTube. This is a company that sees their biggest challenges ahead as people issues….not technology issues, not government issues, not economic issues.
Go figure: one of the biggest/fastest growth stories in American business history suggests that attracting and retaining talent is the most critical factor in their strategy.
