Ellen DeGeneres on Truth

May 29, 2009

In a continuation of our series on commencement speeches, I wanted to share Ellen DeGeneres’s address to the “Katrina Class” at Tulane University this year.  DeGeneres is funny and playful, very funny at times, like when she reveals that she never attended college: “I’m not saying you wasted your time and money, but look at me, I’m a HUGE celebrity.”

She also talks about the costs and gifts of adversity, including her experience coming out as a gay performer. DeGeneres made a very deliberate choice to walk away from shame and fear, a choice that came at the price of her immediate career. For years she was considered untouchable by the Hollywood community. She spent this period learning to live without apology, and by the end of it she “had a purpose.” And a wildly successful talk show. And access to an extraordinary platform for impact.


Leadership as Human Buffer

May 27, 2009

Ellison

Business Week recently described how Marvin Ellison, Home Depot’s newly-minted Executive Vice-President of U.S Stores, improved the store experience in the wake of Bob Nardelli’s infamous tenure.  Nardelli made several decisions that have been widely criticized, including some explicit cost/service tradeoffs that eroded Home Depot’s core advantage.  An earlier BW article described Nardelli’s run this way:

His military management style led to 100% turnover among his top 170 managers by the time he left the retailer in January. His cost-cutting moves replaced experienced salesclerks with low-wage students, devastating customer service and handing market share to rival Lowe’s.

Fast forward to today, where Home Depot’s service experience has been transformed by Ellison’s leadership: 

Sarah Larsen used to avoid Home Depot, having dealt for years with surly, hard-to-find employees and indifferent store managers. But about six months ago, faced with a major renovation project, the Naperville (Ill.) communications consultant gave the store another try. She immediately noticed the difference: Sales associates were friendly, helpful, and in large supply. Now, Larsen says, “it has become my go-to store.” 

Ellison made a number of crucial service plays, but I was most struck by his decision to limit the amount of communication that central managers could have with store personnel.  Essentially, Ellison told senior managers that they could communicate with him as much as they liked, and that he would be responsible for store performance.  But they could no longer communicate (read disrupt) store personnel directly.  In some cases, this meant reducing the number of daily e-mails and reports that store managers received from 200 to one.  He also gave his stores just three metrics to care about — cleaner warehouses, stocked shelves, and top customer service. 

Ellison made it crystal clear that managers’ most important constituents were the people in their stores — their customers and the employees who serve them — and not their corporate superiors pestering them from headquarters.  Ellison became a buffer between senior management and the front line, which created the time and space for his people to focus on what really mattered:    

More important, Ellison is enforcing a practice called “power hours”—weekdays from 10 a.m. to 2 p.m. and all day on Saturdays and Sundays—when employees are supposed to do nothing but serve customers. They can stock shelves, unload boxes, and survey inventory at other times. “We could not address customer service needs because we were too busy doing other things,” says Ellison.

The results? CEO Francis S. Blake explained Ellision’s rapid rise this way: “You could go blindfolded into two stores and know when you were in Marvin’s store.” Marvin’s stores, it turned out, had the sweet smell of success. 


In (True) Praise of Dullness

May 23, 2009

David Brooks left his comfort zone this week for a column on CEOs he titled, “In Praise of Dullness.”  At one point he offered a defense of his thinly-veiled distaste for the subject–

…people in the literary, academic and media worlds rarely understand business…the virtues that writers tend to admire — those involving self-expression and self-exploration — are not the ones that lead to corporate excellence.

He’s right about corporate excellence.  Healthy organizations aren’t designed for self-expression and self-exploration, or for people who are primarily motivated by those pursuits.  They’re designed for self-suppression and other-exploration.  Done right, they’re designed to get you out of your own head and into the heads of your colleagues and customers.  It rarely translates into sexy copy, which may explain Portfolio’s spectacular descent.

Brooks uses most of his energy to summarize the recent literature on patterns among successful corporate leaders, observing an emphasis on persistence, focus and analytic ability.  These aren’t traits he particularly values, and he doesn’t hesitate to make the jump to caricature.  The corporate drones he imagines at the top of competitive companies are “anal-retentive and slightly boring.”  They lack empathy and warmth.  And since their underdeveloped people skills keep them from living a more fantastic life of the mind, they tend to congregate in “such unlikely places as Bentonville, Omaha and Redmond.” 

Dull is in the eye of the beholder, of course.  The most interesting people I know are moved deeply by trying to make organizations work, by the creativity and human potential they find lingering around the water cooler.  But here’s another frame on Brooks’s anal-retentive types: unlike the rest of us, they don’t need to make the story about them.  They don’t need to be adored to sleep comfortably at night.  They don’t need our affirmation or approval, which frees them up to focus on the thing that matters most in organizations: creating an environment where other people thrive.


Suze Smackdowns: High Standards, High Empathy

May 20, 2009

The NYT Magazine recently did a terrific story on Suze Orman, increasingly known for the tongue-lashing she’s willing to give viewers who aren’t taking full responsibility for their financial lives. Or as Oprah calls these very public rebukes, “Suze smackdowns.”  Suze — she’s achieved first-name-only status — is a worldwide phenomenon, and I think it has as much to do with how she communicates as what she communicates.

I also think there’s a leadership lesson in her success.  Suze doesn’t let empathy get in the way of enforcing high standards.  Nor does she let high standards get in the way of empathy.  If there’s any secret sauce to leadership, I think it’s this.  I think it’s learning how to deliver both simultaneously. A default assumption for most of us is that these positions tradeoff on each other, that you can be supportive or hold people accountable, but not both. The exceptional leaders I know are defying this tradeoff everyday.  They are demanding excellence from the people around them, while helping them achieve it with relentless support.


David Foster Wallace on Freedom

May 17, 2009

Graduation Speech Season is upon us, which may be my favorite season in American cultural life.  A whole army of amateur and not-so-amateur speakers takes the stage with the explicit task of helping to unleash the next generation of dreamers and doers. Unexpected magic can happen. And even when it doesn’t, we are still focused briefly on the challenge of our collective salvation.  

I want to honor the season’s start with David Foster Wallace’s advice to last year’s graduating class at Kenyon College in Ohio (thank you, Lyn). Wallace finally lost his life-long fight with depression last year, a tragedy on many levels. He may have been the most talented writer of his generation and probably many others.

I’m including a full version of the speech, which the Guardian edited, along with a preview:

…there are all different kinds of freedom, and the kind that is most precious you will not hear much talked about in the great outside world of winning and achieving and displaying. The really important kind of freedom involves attention, and awareness, and discipline, and effort, and being able truly to care about other people and to sacrifice for them, over and over, in myriad petty little unsexy ways, every day. That is real freedom. The alternative is unconsciousness, the default setting, the “rat race” – the constant gnawing sense of having had and lost some infinite thing.


Competing on Customer Pain Points

May 13, 2009

In a recent Business Week article, Virgin Mobile and ING Direct were singled out as companies that are winning by defying industry trends. In particular, these companies are designing services that honor their customers’ preferences and aversions. The article quoted Peter Lurie of Virgin Mobil on its policy of abandoning the much-loathed customer lock-in:

It’s not about inventing a new technology; it’s about providing better service in an industry where [service] is done poorly.

Similarly, ING Direct has responded to its customers’ hatred of legalese and small print by creating a two-page home loan agreement. It’s similar to Commerce Bank’s decision to reject “bankers’ hours” and serve its customers on nights and weekends, when they actually have time to go to the bank.

We celebrate these examples because they are the exceptions. The norm was also captured in the article, personified by Duncan MacDonald’s experience as a Citibank executive when he warned against “penalty pricing,” or the use of fees for almost every imaginable infraction as a way to boost profit. “I was asked to resign three days later,” Duncan recalled.

I am often asked where to begin the service innovation process. One place to start is the well-understood customer pain points in your industry, the cracks in the sidewalk that everyone’s walking around, resigned to their existence and convinced that they’re not fixable. A brief history of service competition should convince you that these cracks are opportunities. Virtually every service industry I know is inflicting pain on their customers, which makes these industries ripe for disruption by a service model that champions the customer. In my experience the customer gratitude you’ll generate can translate reliably into profits.


The Employees You’re Slamming Are Behaving Rationally

May 11, 2009

It is difficult to find something written about change that doesn’t talk about how hard it is. My observation couldn’t be more different. I find that change happens in an instant — deciding what to change and finding the right levers for changing it, those are the complicated parts.

I’ll use culture as an example. I was recently working with some executives who were lamenting that their employees weren’t acting with a sense of urgency. And no matter how many times the senior management team implored employees to move faster, the needle on urgency didn’t move. The team concluded that employees just didn’t believe them that urgency really mattered.

They didn’t, for perfectly good reasons. When I asked the team to explain their employees’ behavior, they attributed all kinds of fundamental character flaws to these individuals they had carefully selected and trained — lazy, uncommitted, distracted, risk averse. I let them get all of that out of their system. And then I asked why a smart, well-intentioned employee would act without urgency in their organization.

It took a few tries to break the habit of judging and psychoanalyzing their employees, but eventually we got somewhere. It turns out that when employees made mistakes in this particular company, they were often pounced on by the most influential of the senior team. In some cases, it bordered on ridicule, a public hearing on someone’s judgment and intellect. Once we uncovered this pattern, we were 95% of the way towards change.

These employees were behaving rationally according to the dominant, if informal performance management system. Senior management could not have been clearer – only present polished work that you’re damn sure is right.  It was no surprise that few people revealed any intermediate progress. It made perfect sense to wait until every i was dotted, every t crossed, before making any sudden movements. That behavior looked like the absence of urgency. And senior managers’ actions were at the root of it.

The solution? It wasn’t to keep clarifying the importance of urgency. This team had to stop punishing small mistakes, particularly mistakes that were a consequence of working faster. And they had to start celebrating speed, with public acknowledgment that moving faster requires new behaviors like sharing unpolished ideas and building on each other’s work.

The lesson? Before setting out to change something, figure out why people might be behaving rationally in the culture and systems you’ve designed (or permitted). The least likely, least useful explanation is that good people have suddenly gone bad. The most likely explanation is that you’ve created an environment that is setting them up to fail. Now change your behaviors that are contributing to that environment. I promise it won’t take long.