Kerrying On

Your Very Own Culture Change

When my partners and I first organized our company nearly thirty years ago, we were surprised by the stance our employees took on snacks. That’s right, snacks. The day we opened the doors of our burgeoning consultancy, we decided to stock the communal refrigerator with tasty fruits and juices. The company would purchase these snacks and then give them to employees, vendors, clients, and anyone else who stumbled into our office.

We chose this tactic for good reasons. Not only were the treats enjoyable, we also knew that employees collaborate more frequently and effectively when they routinely bump into each other—say, over a mid-morning “fruit and juice” break. These weren’t just snacks we were giving away, they were fructose-charged team builders.

Another perk we took great pride in sponsoring during those early years was the practice of offering employees an annual bonus. Each December, the entire staff would gather in the main conference room where the founders would sound a trump, beat a drum, and give each employee a sealed envelope containing a check.

“It’s your bonus,” we’d explain, “for the wonderful work you do.”

Despite our best intentions, this practice felt a bit off-kilter. A bonus can feel like a gift and that’s unfortunate because the money we shared with employees each year was something they had earned. It wasn’t a gift the owners had magnanimously bequeathed them. The owners hadn’t earned all the profits and then in an act of colossal generosity, passed out money to anyone tangentially involved. Everyone who worked with us had been an essential part of our success. Everyone had earned a share of the profits.

So, we gave up the practice of handing out bonuses and instituted profit sharing. Staff members would now take home a part of the company’s earnings—based on their salary and the firm’s annual profits. Each employee’s financial well-being was now tied directly to the health and wealth of the company. As corporate profits increased, so did everyone’s profit-sharing check. This put everyone in the same boat, headed in the same direction, and seeking the same destination—in one swift maneuver.

Now, back to our snacks. The day after we announced profit sharing, a sign mysteriously appeared on the refrigerator door: Fruits and Drinks $1. I asked Phil, our art director, what was going on. He explained now that everyone was taking part in profit-sharing, he and the rest of the staff weren’t willing to give away costly treats.

“When we give away fruits and drinks,” Phil explained, “the cost comes straight off the bottom line. Money that’s headed for our pockets is redirected elsewhere. We’re not on board with that.”

Instituting profit sharing led to a significant and enduring change. The minute employees learned that they were participating directly in the company’s financial success, they began treating the company as their own. For instance, it wasn’t long until every new-hire had to be reviewed by a selection committee to determine if hiring the proposed new employee would bring in more money than it would cost to keep the person employed. When other companies were shifting to new copy machines, our employees found that refurbished ones worked just fine. If somebody got thirsty, they had to pony up the cash. You get the point.

As you read this account, you might be intrigued by the idea of sharing profits in your own company, but if you’re like most people, you lack the authority to implement such a system. Don’t let this stop you from talking to those who do have the authority. And if you’d like a sample of how profit sharing works, there is a place where you can conduct an experiment. Your home. Here’s an example of how my wife and I created a culture-change by using the home version of profit sharing.

During our children’s teenage years, our family visited a foreign country each summer—on the cheap. Unfortunately, traveling on a tight budget led to friction. Our children lobbied for buying souvenirs, eating in nice restaurants, etc., whereas Louise and I pressed for not spending a cent that wasn’t absolutely necessary. With each trip, I became increasingly ensconced in the role of “guardian of the family treasure” while the children honed their skills in plundering.

Then came the year of the refrigerator note. I thought to myself: What if we applied the concept of “we’re in this together” to our family? We could create a detailed travel budget and then present it to the kids in the following way: “Here’s our budget (from food, to transportation, to lodging). If we stick with it, we’ll be fine. However, every penny we save against the budget, we’ll put towards our first family computer.” (Something we all sorely wanted.)

It was the company culture-change, all over again. From the day we landed in Paris, the kids refused to eat the restaurant meals we had budgeted—insisting that we buy baguettes and cheese at the local markets and make inexpensive and tasty meals on our own. This plan was coming from my children, not from me. It was their lips that were moving, not mine.

And so, throughout the vacation the six of us carefully kept an eye on the sights and the budget.

“I’m not going to spend my souvenir money that’s in the budget,” our 14-year-old son proclaimed. “Who wants a cheap miniature replica of the Eifel Tower, anyway?”

“If we walk the Champs-Élysées,” explained my oldest daughter, “we’ll see the avenue close up, eventually get to the Arc de Triomphe, and save six bus fares.”

“Plus,” her sister chimed in, “we can refill our water bottles along the way—rather than buy new ones. It’ll save us two bucks a bottle.”

With the goals of enjoying the trip and buying a computer firmly in mind, not once during our vacation did our kids characterize me as a skinflint while they portrayed themselves as the balanced, reasonable ones. Gone was the language of us versus them. In its place stood a shared desire to travel as a family, while carefully watching our expenses.

The effect of sharing a financial goal was so powerful that occasionally we had to deal with proposals that seemed too frugal. For instance, one morning our youngest son announced: “Breakfast is for sissies.” (He desperately wanted a computer and the Frogger game that came with it.) As you might suspect, this pronouncement required a discussion. Nevertheless, imagine talking with your teenage son about the risk of being too frugal. I didn’t think that day would ever come. Creating common objectives can do that. Sharing profits can do that.

So, the next time you find yourself in a heated argument, replace your efforts to defeat others via debate with efforts to seek common ground. The ability to seek similarities in purpose may not be as attention-grabbing as the capacity to deal a clever blow during a fiery debate, but the ability to find common ground is far more effective.

This being the case, did our family’s change plan work as well as the profit sharing efforts we implemented at work? It did. By closely watching our expenses we were able to enjoy Paris and save enough money to purchase a brand-new IBM PC—complete with 256k of RAM. Wow! A whole 256k of RAM. We were set for life.

Want to master these crucial skills? Attend one of our public training workshops in a city near you. Learn more at www.vitalsmarts.com/events.

Crucial Conversations QA

The Manager’s Guide To (Appropriately) Advocating For Your Team

Dear Joseph,

One of the most important roles I have as a manager is to be sure my people are properly recognized for their contributions. I do that through verbal gratitude, annual reviews, monetary compensation, and at times, career advancement. I feel heartbroken these days because my hands are tied on the last two. I can only offer tiny salary increases and no advancement opportunities. How do I help my people know their work is valued and keep them motivated in this climate? And/or how do I get upper-management to be more generous?

Signed,
Lean Times

Dear Lean Times,

Your team is lucky to have you as a leader. I can sense the compassion and interest you have for them. Love is the foundation of good leadership. You’ve got that squarely in place.

With that said, many managers misapprehend their basic role. Many unconsciously adopt an agenda of team advocacy. They think their job is to fight for resources and garner rewards for their team. Proximity to their team engenders a sympathy with their people’s needs while distance from other constituencies breeds indifference to abstractions like budget discipline, shareholder returns, and the needs of other faceless managers or employees. Your job becomes fighting for “your” people.

I say this to explain my first point: the basic role of a manager is to advance the interests of the enterprise. This means there are times when your job is to stand tall and tell your team that meager bonuses are the right decision. When you advocate for bigger rewards for your people, it should be because, as you take an enterprise-wide view, you believe this is where those incremental resources should be placed. Companies suffer when managers squabble over capital investment decisions as though their own local needs are all that matter. The result is a budget that reflects politics more than purpose. Organizations thrive when managers offer their specialized team-level perspective in the service of enterprise-focused decisions.

Enough of the sermon. Understanding that your role is to do what’s right by the organization and your team—let me offer some questions you can reflect on as you influence your team’s motivation and ensure they are appropriately compensated.

  1. Are you maximizing other motivations? Decades of research shows the most important work motivators are not financial. Don’t get me wrong—money matters. But it matters most when other motivators are missing. Three of the most profound are purpose, connection, and mastery. Are you creatively connecting your team to the larger human purpose of the enterprise? Are you investing in developing satisfying connections of trust and intimacy among team members? Do you support individual team members in creating motivating developmental experiences that give them a sense of increasing mastery? These are some of the basics of motivation.
  2. Do you understand the business? Before you advocate for pay or promotions for your team, be sure you understand the larger scheme of the value your team adds to the enterprise, and the relative contribution your people make. Also, do you understand and sympathize with the larger economic realities your senior leaders are navigating? For example: Are you in a growing market? A shrinking market? If you are a government agency, are your budgets increasing or decreasing? Do you work in a growth area of your organization or a declining/legacy area? Your influence with upper management decreases when your motivations narrow. If it’s all about “your” people—expect resistance. If they believe you have a broader enterprise view, they will be far more open to your arguments.
  3. Is compensation internally fair? Is it externally competitive? Your arguments will be more effective if they are more informed. The two strongest arguments for increases have to do with internal fairness (Are people who make similar contributions also making similar incomes?) and external competitiveness (Is your team’s pay lower than the market you’re recruiting from?). Notice I am NOT suggesting that everyone in similar jobs should be similarly paid. It’s about contribution not job description. You need to factor in not only what skill set someone is using but also how meaningfully it is contributing to the enterprise’s most important challenges.
  4. Can you add more value? The only sustainable compensation principle for organizations is that compensation should follow contribution. It isn’t about tenure, title, rank, or classification. It’s about how important your contribution is to the critical problems the organization faces. You should not ask for more unless you believe your people are not being compensated commensurate with their contribution. And if you do, you need to find a way to persuasively demonstrate this gap. Otherwise, work the other direction: help your team see ways they can increase their contribution in order to bolster the case for increased compensation.
  5. What are the natural consequences of the gap? If compensation is clearly out of whack, the best way to influence upward is to meaningfully illustrate the natural consequences of the current policy. Ask yourself:
    • What problems is the current pay gap creating? What evidence do I have of these problems?
    • If the pay gap persists, what problems do I believe will occur? What evidence do I have that they will actually occur?
    • Which of these problems would upper management care about most?
    • How can I present these problems in a potent way? For example, a hospital pharmacy manager who complained for years about underpaid employees finally got results when he showed the relationship between medication errors and staffing turnover.

Best wishes as you continue to care for your team in a way that honors your larger stewardship.

Warmly,
Joseph

Want to master these crucial skills? Attend one of our public training workshops in a city near you. Learn more at www.vitalsmarts.com/events.

Getting Things Done QA

Overcommitted? How To Renegotiate Your To-do List

Dear Justin,

I have a lot to do. Just my standard job responsibilities are more than enough to occupy every minute of my work day, and then some. I’m maxed out, but I hate to turn people down when they ask for my help. So, I end up committing to more work than I really have time to do. I’m just not really sure how to be both productive and helpful. These two qualities seem at odds. Any advice?

Best,
Maxed Out

Dear Maxed Out,

Your situation is one everyone can relate to. This predicament rings all too true: I only have 24 hours in a day, but I committed to 30 hours worth of stuff. I can appreciate your intent—you want to be helpful to others—but your good intentions will get you into trouble, if you aren’t careful.

Here are a few tips to consider:

Accept the reality of time. When you and I continue to say “yes” to agreements we don’t have time to complete, we are deceiving ourselves. In subtle ways, we try to trick ourselves into believing we will, somehow, someway, be able to do more than one thing at a time or find 26 hours in our 24-hour day. We all know that’s silly, yet we constantly rationalize making un-keepable commitments with these types of arguments. The good news is you don’t have to. As David Allen says, “Einstein had 24 hours. So did Mother Teresa. So did Bach.” You can accomplish your most important goals and help others in amazing ways with the time you have available to you.

Master the art of renegotiation.

1. You can’t renegotiate agreements you don’t remember making. I’ve spoken about this idea in many of my articles, most especially the one about not keeping stuff in your head. As you may know, David Allen also says, “Your mind is for having ideas, not holding them®.” It’s tough to know which agreements or to-do’s you need to renegotiate if you don’t have them in front of you. So here is a quick exercise. Sit down for ten minutes and write down, as quickly as you can, every commitment that has your attention—all the stuff weighing on your mind. Write down one item per line on the paper.

Reflect on your list and consider how you feel about those items. Most people feel a little bit better. Why? Maybe because they feel like they have more control over them. Maybe because they can see the next steps needed to complete the items they’ve listed. Maybe because once it’s out of their head, their mind feels clearer. There is often an inverse relationship between how much something is on your mind and how quickly it gets completed. When you get into the habit of writing down all your agreements and seeing the massive lists of things you’ve agreed to, the word “NO” might start feeling more appropriate.

2. Renegotiate with yourself. One of the biggest sources of stress and dissonance comes from not completing commitments we made to ourselves: “I ought to fix that back porch,” “I really want to write a white paper for this product idea I have,” and “I want to take my wife out on a date.” For some, our own desires and values are the largest sources of commitments. When you have too many of these commitments, you can either stress about not being able to get to all of them or you can be better about deciding which ones you’re truly committed to and which ones you’re not. This is where a Someday/Maybe List can be really powerful. The idea here is this: just because you want to say “no” to something right now doesn’t mean you have to say “no” to it forever. Even if you removed it from your list—but deep down inside you still had an interest in doing that thing at some point—your brain won’t let go of it. Your brain will keep reminding you and guilt-tripping you about it. So, you need a place to put items you might want to do but aren’t committed to taking action on right now (because of time, money, circumstance, etc.).

Create a list or a folder called “Someday/Maybe” or “Not Now.” Then, anytime you think of something you want to do, but you know realistically you can’t commit to now or in the near term, drop it into that list. Then, put a reminder on your calendar once a month to review that list. There is no pressure to do anything, but as you review the list, see if there is anything you want to make “current” because you now have the time, money, or circumstance to do it.

3. Renegotiate with others. When you get a commitment you know you don’t have time to complete, it’s time for a renegotiation conversation. This can be a hard one. The reality is there are some commitments you simply can’t say “no” to or renegotiate. If your boss wants you to do something ASAP, you should probably do it. But the key here is finding a way to fully engage with the commitments you make and not feel guilty about the stuff you’re not doing in that moment. The two steps for having a renegotiation conversation are 1) to make your intent really clear and 2) clarify the priority of large projects, not just small actions.

  • Make your intentions really clear. When you begin a renegotiation conversation, your goal is to relay this idea: I am a contributor craving focus, not a complainer craving less. Start by telling the other person your intention, “Hey, Steve, I wanted to chat about assignment XYZ. I want to give this the attention it deserves. Can you help me see how, in terms of priority, this fits with other assignments we’ve talked about?”
  • Projects versus actions. Our tendency is to want to go to our boss (or the person to whom we’ve made commitments) and say, “Look at this massive to-do list I have! I have far too much to do. You’ve got to take some things off my plate.” Complaining about the number of tasks you have will likely not get you much sympathy. Instead, focus the discussion around your projects. By projects, I mean all your big priorities that have multiple moving parts. Talk with the other person about re-prioritizing those. That will give you much greater balance and clarity. Note: One study done by economists and sociologists Neil Gandal, Charles King, and Marshall Van Alstyne at MIT found that a firm’s “all-stars” tend to only work on five projects at once.

You can be both helpful and productive, but not without some key habits to keep it under control. In the end, you also have to take care of yourself. When you commit to far more than you can realistically do, you only create more stress. Being a little nicer to yourself will actually be the best way to help others in the long run.

Good luck!
Justin

Want to master these crucial skills? Attend one of our public training workshops in a city near you. Learn more at www.vitalsmarts.com/events.