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How to Create a 100 Year Company

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Title: How to Create a 100 Year Company


1
How to Create a 100 Year Company
2
Overview
  • There are some timeless principles to building a
    great company. Apply these principles and youll
    get greatness.
  • Greatness does not lie in accounting, cost
    cutting, or the pure profit motive. It lies in
    building a companys sense of purpose around core
    values that give work meaning.
  • There are principles that will guide you into
    building something bigger and more lasting than
    yourself. If you want to leave a legacy, this is
    what you must do.
  • All this information is rooted in rigorous
    research.
  • Why on earth settle for creating something
    mediocre that just makes money when you could
    create something that makes a lasting
    contribution as well. It takes the same amount of
    time and is more fun and rewarding. Those who
    create a lasting contribution make more money in
    the end as well!

3
Note These Points
  • The Silicon Valley Paradigm of getting a good
    idea, raising venture capital, growing rapidly,
    and then selling out or going public fosters
    impatience and a rise in social instability. Many
    of those high tech companies which were built
    to flip are dead.
  • Success based on a great idea is like telling
    perfect time without a watch, whereas putting
    together and maintaining a company that succeeds
    over time is like building a clock that runs
    forever.
  • A great company does not need charismatic leaders
    or fantastic product ideas. It needs a commitment
    to greatness and a process to get there. Thats
    what Im trying to teach you.
  • Do you build a product or a company? The constant
    stream of great products and services from highly
    visionary companies stems from them being
    outstanding organizations, not the other way
    around.

4
You Can Do It
  • You can improve your organizations position,
    stature, performance and perhaps even become
    GREAT if you consciously apply the framework
    of ideas I show you. These are the secrets to
    success of the 100-year companies.

5
Characteristics of Great Companies
  • Premier company in its industry
  • Widely acknowledged as the Best by
    knowledgeable business people
  • Makes a lasting impression on the world
  • Lasts several generations
  • Goes through multiple products and life cycles

6
Common Misconceptions
  • You do not need a celebrity leader
  • Executive pay does not correlate with going from
    being good to being great
  • Strategy does not separate the good from great
  • You must focus on what NOT TO DO as well as what
    TO DO
  • Technology accelerates change but it does not
    cause a transformation of the company
  • MA play no role in igniting a companys
    transformation to greatness
  • Good-to-Great companies are not necessarily in
    great industries

7
10 Myths of Great Companies
  • You need a great idea to start
  • You need a charismatic leader
  • Their first objective is to maximize profits
  • You need a particular certain set of core values
  • Change is the only constant thing
  • You must play it safe and be risk adverse
  • They are a great place to work for everyone
  • Their best moves are made through brilliant
    planning
  • They should hire outside CEOs to bring about
    fundamental change
  • They focus on beating the competition

8
The Myth of Needing a Great Idea
  • Be a Builder of a Clock (organization) that keeps
    running, rather than a genius perfect Time Teller
  • Just Get started ... and find your way
  • Business school teaches great idea, great
    marketing plan, window of opportunity - nope!
  • The ultimate creation is the company, not the
    product or idea - so put your energies into
    trying to create an organization and design an
    environment conducive to great product creation
    (leaders die but great companies last)

9
Examples ...
  • HP urinal flusher, telescope clock drive, fat
    reduction shock machine, anything
  • Sony rice cooker, tape recorder (failed),
    heating pads
  • HPs creation wasnt the calculator or
    oscilloscope but the company and HP way
  • Masaru Ibukas greatest product was not the
    Walkman or Triniton but the Sony company and what
    it stands for
  • Walt Disneys greatest creation was not any one
    movie but the ability to make people happy
  • etc.

10
The Myth of the Charismatic Leader
  • The great leader theory does not explain the
    difference between good and great companies
  • 3M, PG, Sony, Boeing, HP, Merck,
  • The continuity of great leadership comes from
    great organizations
  • Great leaders are architects and clock builders,
    and give their associates a chance to make a name
    for themselves and show what they can do -
    fanatically driven to produce sustained results
    and workmanlike diligence
  • American Constitution - Thomas Jefferson, James
    Madison and John Adams were organizational
    visionaries same for the lawgivers of Athens and
    Sparta

11
Great Leaders Professional Will Personal
Humility
  • They transform personal ambition into ambition
    for the company
  • They are ordinary people producing extraordinary,
    superb results have a dedication to making
    anything they touch the best it can be yet are
    humble and modest, never boastful
  • Demonstrate unwavering resolve to do whatever
    must be done, no matter how difficult, to produce
    best long term results but act with quiet, calm
    determination and motivate through inspired
    standards rather than charisma
  • Their goal is to build an enduring great company
    they channel ambition into the company not
    the self, and set up the next generation to
    succeed even more than they did
  • They look in the mirror for blame (never others
    or bad luck or the environment) and give the
    credit for success to others

12
Having the Right People
  • Great Leader
  • First WHO - get the right people, build the right
    team
  • (the right people do the right things and best
    results regardless of the incentive system)
  • Then WHAT - with the right people, figure out the
    path to greatness
  • Genius with 1,000 Helpers
  • First WHAT - set a vision and road map
  • Then WHO - enlist a crew of helpers to make it
    happen

13
The Genius with 1000 Helpers
  • The myth of individual genius is destructive we
    think we have to do all the hard work ourselves
  • The most successful people rely on the help of
    other people
  • Surveys show partnerships do better than single
    ownership (2X survival rate, grow faster, higher
    profits/person, last longer)
  • If 2 heads are better than one, 3 heads
  • A partnership is like a marriage without sex, so
    choose your partners as you would evaluate a wife

14
Selecting People - get the Gene Pool Right
  • Rule 1 when in doubt , dont hire but keep
    looking
  • you cannot grow revenues faster than your ability
    to get good people to implement that growth and
    maintain company greatness
  • Rule 2 when you need to make a people change, do
    it !
  • If you feel you need to tightly manage someone,
    you know you hired the wrong person!
  • If it were a hiring decision, would you hire them
    again?
  • If they tell you they are leaving, would you feel
    disappointed or relieved?
  • Rule 3 put your best people on your best
    opportunities, not your biggest problems
  • Rule 4 people are not your most important asset,
    the right people are your most important asset,
    and right often has to do with character

15
You Can Balance Opposites
  • Purpose beyond profits
  • Fixed core ideology
  • Conservatism around the core
  • Clear vision/sense of direction
  • BIG GOALS
  • Managers steeped in the core
  • Ideological control
  • Tight culture (cult-like)
  • Long term investment
  • Visionary, futuristic
  • Organization aligned with a core ideology
  • Pragmatic pursuit of profits
  • Vigorous change and movement
  • Bold, risky moves
  • Groping and experimentation
  • Incremental evolutionary progress
  • Managers that induce change
  • Operational autonomy
  • Ability to change and adapt
  • Short term performance demands
  • Super daily execution
  • Organization adapted to its environment

16
Hedgehog Concept
  • The fox knows many things, but the hedgehog knows
    one big thing.
  • Dont be scattered, diffused, moving on many
    levels
  • Those making the biggest impact (Freud, Einstein,
    Marx, Adam Smith) concentrated on one thing and
    simplified it
  • 3 Things
  • Best in the world at I feel I was born to be
    doing this
  • Economic Engine I get paid to do this? I am
    dreaming!
  • Passion I look forward to getting up and going
    to work and really believe in what Im doing

17
The Hedgehog Concept
  • What can you be the best in the world at?
    (otherwise you can be successful but not great)
    Stick to it. Doing what you are good at will only
    make you good but focusing on what you can
    potentially do better than any others --gt youll
    become great.
  • What drives your economic engine? Profit-per-x,
    cash flow and profitability ... What one ratio do
    you systematically want to increase over time to
    have the greatest impact on your economics? Find
    a metric.
  • What are you deeply passionate about?

18
Nucor Steel is an Example of the Hedgehog Concept
  • Economic denominator - profit per ton of steel
  • Become the best in the world at harnessing
    culture and technology to produce low cost steel
  • Passion for eliminating class distinctions and
    aligning management and workers

19
Examples of Economic Denominators
  • Abbott profit/product --gt profit/employee
  • Fannie Mae profit/mortgage -gt profit/mortgage
    risk level
  • Gillette profit/division -gt profit/customer
  • Nucor Steel profit/division -gt profit/ton of
    steel
  • Philip Morris profit/sales region -gt
    profit/brand
  • Walgreens profit/store -gt profit/customer visit
  • Wells Fargo profit/loan -gt profit/employee

20
Culture of Discipline
  • The purpose of bureaucracy is to compensate for
    incompetence and lack of discipline, but these
    problems go away if you have the right people in
    the first place
  • Most companies build bureaucratic rules to manage
    the small percentage of wrong people, which drive
    away the good people
  • REMEDY create a culture of discipline
  • responsibility accounting
  • freedom and responsibility within a framework
  • fill that culture with self-disciplined people
    willing to go extreme lengths to fulfill their
    responsibilities
  • dont confuse discipline with tyrannical
    disciplinarianism
  • adhere with consistency to the Hedgehog Concept
  • a culture of discipline, not discipline through
    sheer force

21
You Cant Fix Whats Broken With Good Policies
  • Fixing problems with policies sometimes works,
    and sometimes creates lots of conflicting
    policies
  • When a problem arises, instead of a new policy
    try this
  • Contact the source of the reported problem and
    get some idea of the evidence there is a problem
  • If the evidence is legitimate, contact the person
    responsible for solving the problem and ask them
    if they know about it, and how much they know
  • Then ask them to copy you their solution
    (resist the urge to suggest a solution or create
    a new policy) which ensures that the problem gets
    solved, the solution makes sense, and it makes
    sense in the context of the whole business and
    its operations
  • This approach recognizes that good employees
    dont need policies to do good work, and bad
    employees will waste time and screw things up no
    matter what policies you write

22
Culture of Discipline
  • You want to create a culture full of
    self-disciplined people who take consistent
    action consistent with the 3 Hedgehog principles
  • If you get the right people --gt you dont need
    bureaucracy
  • People adhere to a consistent system people have
    freedom and responsibility within that system
  • Its Not about Action -- Get disciplined people
    who engage in disciplined thought and then take
    disciplined action
  • Great companies appear boring from the outside,
    but inside theyre full of people with intensity
    and diligence
  • The more you stay within the 3 principles, the
    more will be your opportunities for growth
  • Once-in-a-lifetime opportunities are irrelevant
    unless they fit within the perimeter of the three
    principles
  • Stop doing lists are more important than To Do
    lists

23
You Need a Council
  • Purpose Understand issues facing an organization
  • Meeting every week or two (ex. meet for lunch
    twice a week), thisCouncil provides a small team
    of people in the firm sufficient "jawbone" or
    talk time to dialogue about the direction,
    priorities, and challenges of moving the business
    forward.  Without this informal talk time, it's
    hard to figure out the important stuff.
  • Argue, debate in search of understanding, not ego
  • Members must have different perspectives
  • The council is a standing body
  • Mentors and the Board of Directors are similar
    but not the same
  • Final responsibility rests with leader, not
    consensus (since consensus decisions are often
    not intelligent)

24
Great Companies Focus on More than Just Profits
  • Merck - free river blindness medicine,
    streptomycin after WWI to Japan to eliminate
    tuberculosis We try never to forget that
    medicine is for the people. It is not for the
    profits. The profits follow, and if we have
    remembered that, they have never failed to
    appear. The better we have remembered it, the
    larger they have been.
  • Ford - criticized for injecting spiritual
    principles into business (go after reasonable
    profit, enable lots of people to enjoy a car,
    twice industry pay rate)
  • Profitability is necessary, but only a means to a
    more important end oxygen is important for life,
    but not the point of life, but without it there
    is no life.
  • Like-minded people come together for the same
    core ideology
  • HP - bigger was better only if it made a
    contribution
  • JohnsonJohnson - to alleviate pain and disease
  • Boeing - to pioneer aviation
  • Find the RIGHT PRAGMATIC SOLUTION in line with
    their CORE IDEALS

25
Core Ideologies - There is No Right One
  • Customers - JohnsonJohnson and Wal-Mart (Sony
    and Ford - no)
  • Concern for Employees - HP and Marriott (Disney
    and Nordstrom - no)
  • Products and Services - Disney and Ford (IBM,
    Citibank - no)
  • Risk Taking - Sony and Boeing (HP and Nordstrom -
    no)
  • Innovation - 3M and Motorola (PG, American
    Express - no)
  • The critical issue is not whether a company has
    the right core ideology, but whether it has a
    core ideology that gives guidance and inspiration
    to people inside that company!

26
A Core Ideology Must Permeate the Company
  • To create a great company, you need a core
    ideology
  • Indoctrinate employees around the core ideology
    -- you want to create a cult like following
  • Select the companys senior management based on
    their skill and their fit with that core ideology
  • Align your goals, strategy, tactics and
    organizational design around that ideology

27
Core Ideology Core Values Purpose
  • Core Values a small set of enduring guiding
    principles you never compromise for financial
    gain or short term expediency
  • Purpose a fundamental reason for existence
    beyond just making money that always guides the
    firm

28
Examples of Core Purposes
  • Israel - to provide a secure place on Earth for
    the Jewish people
  • Walt Disney - to make people happy
  • Sony - to experience the joy of advancing and
    applying technology for the benefit of the public
  • Merck - to preserve and improve human life
  • HP (Hewlett-Packard) - to make technical
    contributions for the advancement and welfare of
    humanity
  • Cargill - to improve the standard of living
    around the world
  • 3M - to solve unsolved problems innovatively

29
Preserve the Core But Go for Progress
Core Big Goals
30
Preserve the Core But Push for Progress
  • A company must be willing to change everything
    about itself (tactics, strategies, costs,
    products) except its basic beliefs or philosophy
    of doing business
  • Ex. IBM - blue suits, white shirts, IBM360 all
    gone
  • 5 Strategies
  • BIG goals challenging, visionary projects that
    stimulate progress
  • Cult-like Cultures great to work there if you
    fit in
  • Try a lot of stuff and Keep what works
    experiment/failure OK
  • Home grown management promote from within
  • Constant self-improvement its never good enough

31
6 Big Factors
  • Special Leadership - quiet, unassuming, no
    self-importance, humility but intense
    professional will
  • First Who Then What - get the right people, get
    rid of the wrong people, put the right people in
    the right spots
  • Confront the Brutal Facts But Never Lose Faith -
    Stockdale Paradox
  • The Hedgehog Concept - what you can be the best
    in the world at what you are deeply passionate
    about what drives your economic engine
  • A Culture of Discipline - with disciplined
    people, you dont need a bureaucracy

32
Confront the Brutal Facts
  • People will filter the brutal facts from you --
    Yes men
  • You need to Create a climate where people can be
    heard and the truth is heard
  • 1) Lead with Questions, not answers
  • 2) Argue, Debate, Dialogue over strategy and
    whats best for the company - evolve over
    agonizing arguments
  • 3) Conduct autopsies without blame, dont hide
    errors
  • 4) Build red flag mechanisms
  • Victims - either permanently dispirited, get
    their life back to normal, use it to define
    themselves
  • Stockdale Paradox - not optimism

33
BIG Goals
  • A goal that grabs people in the gut and gets
    juices flowing, a big finish line so clear that
    it doesnt need to be explained Kennedy go to
    the moon
  • This is unreasonable but we think we can do it
    a goal outside the comfort zone
  • Self-confidence bordering on arrogance
  • The goal is important, not the leader (otherwise
    after the leader there is a stall), and it should
    be bold and exciting by itself
  • The goal should be consistent with the core
    ideology
  • Have follow-up BIG goals (so no weve arrived)

34
Cult-like Cultures
  • If youre not willing to enthusiastically adopt
    the HP way, you dont belong there if dont
    believe in wholesomeness, arent clean cut and
    believe in magic, you dont belong at Disney if
    you dont want to join the quality push at
    Motorola, you dont belong there if you question
    the right of individuals to make their own
    decision, then you dont belong at Philip Morris.

35
Characteristics of Cults
  • Fervently held ideology
  • Indoctrination
  • Tightness of fit
  • Elitism
  • Companies screen out those who dont fit in
    with their ideology and create heroic mythologies
    about individuals who exemplify the corporate
    ideology

36
How to Establish the Cult-Like Mentality
  • Training programs with company values
  • internal universities and training centers
  • on-the-job socialization
  • exposure to persuasive mythology of heroic
    deeds
  • constant emphasis on corporate values
  • tight screening process
  • incentive/advancement programs that fit in with
    the core
  • awards, contests, public recognition to reward
    those who display great effort consistent with
    the core
  • tolerance for honest mistakes that dont breach
    the core
  • celebrations that enforce success

37
Try a Lot of Stuff and Keep What Works
  • Test, test, test, test, test - fail and fail FAST
    - give it a try and fast
  • Accept that mistakes will be made Darwin
    multiply, let the weak die and the strongest
    survive
  • Corporations are evolving species, no one gets
    100 on every test - species evolve (no final
    blueprint) - use evolution to get to the top
  • Try lots of different approaches and stumble upon
    something that works
  • Small opportunities, incremental mutations grow
    into major unanticipated strategic shifts
  • No decision is sacred
  • Give people the room they need allow people to
    be persistent
  • Build the ticking clock

38
Home Grown Management
  • It is not the quality of leadership that
    separates the visionary companies from the
    comparison companies. It is the continuity of
    quality leadership that matters--continuity that
    preserves the core.
  • The key is to develop and promote insiders who
    are highly capable of stimulating healthy change
    and progress while preserving the core. Give them
    responsibility and training.

39
Good is Never Enough
  • How can we do better tomorrow than we did today?
  • Great companies dont achieve their position
    because they have superior insight or special
    secrets, but because they are so DEMANDING of
    themselves
  • Continuous improvement is an institutionalized
    habit, a disciplined way of life
  • Self-improvement includes process improvement,
    long term investments for the future, investing
    in employee training, adopting new technologies
  • PG method - to make sure the company didnt
    become fat, happy and complacent, it created a
    system of internal competition of brand
    management - it instituted discomfort mechanisms

40
  • Merck consciously yield market share as products
    became low-margin commodities, forcing it to
    create new products to grow and prosper
  • Motorola innovate or die mechanism similar to
    Merck
  • GE internal discomfort instituted through
    special employee meetings where managers cannot
    participate but must make decisions on the spot
  • Boeing eyes of the enemy - managers assigned
    to develop strategy as if they worked for a
    competing company
  • Wal-Mart beat yesterday strategy
  • Nordstrom sales per hour rankings that rate you
    against your peers no absolute standards that
    allow you to relax
  • HP refused to take on long term debt forces
    company to learn how to internally fund its
    growth rate

41
Alignment to the Total Picture
  • Theres no one single program, strategy or tactic
    -- its a complete system of everything
    interpenetrating
  • Focus on small stuff, not just the big picture
    day-to-day is the small stuff
  • Cluster your mechanisms Ford quality control
    employee involvement programs mgmt training
    programs promotion based on management skills
    Merck hires top scientists allow them to
    publish allow them to collaborate with
    outsiders dual track
  • Get rid of mis-alignments your incentive system
    should reward behaviors in line with your core
    values, goals and strategies should align with
    your core values
  • Keep the core while inventing new methods

42
Core Ideology
  • Leaders die, products become obsolete, markets
    change, new technologies emerge, management fads
    come and go, but core ideology endures as a
    source of guidance and of inspiration
  • Core ideology is the bonding glue that holds an
    organization together as it grows, decentralizes,
    diversifies, expands

43
Core Values
  • The organizations enduring guiding tenets--a
    small set of timeless guiding principles that
    require no external justification they have
    intrinsic value and importance to those inside
    the organization
  • Finding core values
  • If the circumstances changed and penalized us for
    holding this core value, would we change it?
  • Imagine you have to duplicate the best attributes
    of your organization on another planet but can
    only send 5 people--who are the best exemplars of
    your companys core values (your genetic
    code)--ask them to elucidate it
  • A clear ideology attracts people to the company
    whose personal values are compatible with company
    core values

44
Great Managers
45
Test Yourself Against the Best Managers
  • 1. As a manager, would you rather have an
    independent aggressive person who produced 1
    million in sales, or a a congenial team player
    who produced half as much. Explain your
    reasoning.
  • 2. You have an extremely productive employee who
    consistently fouls up the paperwork. How would
    you work with this person to help him/her become
    more productive?
  • 3. You have two managers. One has the best talent
    for management you have ever seen. The other is
    mediocre. There are two openings available. The
    first is a high-performing territory and the
    second is a territory that is struggling.Neither
    territory has reached its potential. Where would
    you recommend the excellent manager be placed?
    Why?

46
Ask the Employees These 12 Questions Measure the
Fundamental Strength of the Workplace
  • 1. Do I know what is expected of me at work?
  • 2. Do I have the right materials and equipment I
    need to do my work right?
  • 3. At work,do I have the opportunity to do what I
    do best every day?
  • 4. In the last 7 days, have I received
    recognition or praise for doing good work?
  • 5. Does my supervisor,or someone at work, seem to
    care about me as a person?
  • 6. Is there someone at work who cares about my
    development?

47
  • 7. At work, do my opinions seem to count?
  • 8. Does the mission (purpose) of my company make
    me feel my job is important?
  • 9. Are my co-workers committed to doing quality
    work?
  • 10. Do I have a best friend at work?
  • 11. In the last 6 months, has someone at work
    talked to me about my progress?
  • 12. This last year, have I had opportunities at
    work to learn and grow?
  • People join companies for various reasons, but
    1 how long they stay and 2 their productivity
    (how productive they are) is determined by their
    relationship with their immediate supervisor.
    Its better to work for a great manager in a
    lousy company than a terrible manager in a great
    company.

48
Great Managers Know the Following Secret
Story of the frog and the scorpion crossing the
river. I cant help it its my nature.
  • People do not change very much. They resist
    change.
  • So dont waste time trying to put into them
    whats left out of their character.
  • Try to draw out of them what is already inside
    them.
  • Thats a hard enough job just by itself.

49
A Great Manager Should Do 4 Activities Extremely
Well
A managers function is to act as a catalyst that
speeds up the reaction that creates the desired
end product. The catalyst role has 4 main
activities
  • (1) select a person
  • (2) set expectations
  • (3) motivate the person
  • (4) develop the person

50
Heres how Great Managers do those 4 Things
  • (1) Selecting a person - they select for TALENT,
    not simply experience, intelligence, or
    determination
  • (2) Setting expectations - they define the RIGHT
    OUTCOMES but not the right steps
  • (3) Motivating people - they focus on STRENGTHS,
    not weaknesses
  • (4) Developing people - they help him find the
    RIGHT FIT, not the next rung on the ladder

51
The Difference Between Managers and Leaders
  • The difference is focus
  • Great managers look inward - inside the company,
    individuals, notice differences that guide them
    into how to release each persons talents into
    performance
  • Great leaders look outward - at the competition,
    future, alternative routes forward. They focus on
    broad patterns, and press their advantage where
    others are weakest. But it doesnt have to do
    with turning an individuals talents into
    performance.

52
The 12 questions ...
  • 1. Do I know what is expected of me at work? --gt
    You must set accurate performance expectations.
    Not just goal setting. Know how to keep employees
    focused, what parts of the jobs require
    conformity or creativity on their part.
  • 2. Do I have the right materials and equipment I
    need to do my work right? --gt Give them to the
    person. Dont expect them to do well without the
    right tools.
  • 3. At work, do I have the opportunity to do what
    I do best every day? --gt You must know how to
    select a person, and know how much of a person
    you can change. You must know the difference
    between talents, skills and knowledge.
  • 4. In the last 7 days, have I received
    recognition or praise for doing good work? --gt As
    a manager, you have only one thing to invest,
    your time. Who do you spend it with?
  • 5. Does my supervisor, or someone at work, seem
    to care about me as a person? --gt When an
    employee comes to you and asks where do I go
    from here? you should have a ready answer.
  • 6. Is there someone at work who cares about my
    development? --gt When an employee comes to you
    and asks where do I go from here? you should
    have a ready answer.

53
Human Beings are Messy
  • People dont change that much. You cannot force
    everyone into a particular role to do the job
    the exact same way (McDonalds). There is a limit
    as to how much a persons style, needs and
    motivation can be changed. You can standardize
    them only so much. Thats why casting is
    important.
  • An organization exists for the purpose of
    performance, and performance is any valued
    defined by an internal/external customer. You
    have to focus people on performance. The problem
    is that you cannot force everyone to perform in
    the same way. In some cases, you cannot force
    them to follow the same path toward performance.
    (Great managers spend the most time with their
    best, most productive people).

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The Solution
  • The solution -- Define the right outcomes and let
    each person find the way to achieve it. Now the
    fact that (1) people are different and (2) they
    need to focus on performance are in harmony.
  • This encourages risk taking, growth and
    development.
  • This solution is extremely efficient. The most
    efficient way to turn a persons talent into
    performance is to let them find the path of least
    resistance.
  • This solution encourages employees to take
    responsibility. Employees need to feel a certain
    tension to achieve. Defining the right outcomes
    creates that tension. It nurtures self-awareness
    and self-reliance.

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However, Be Careful
  • Dont let employees risk everything and break
    the bank -- thats what people tend to do when
    its not their own money and they feel no
    personal pain at loss
  • Employees must follow certain required steps when
    they are part of a company or industry standard
    (ex. Computer communication standards)
  • Required steps are useful only if they do not
    obscure the desired outcome -- people follow the
    literal rules rather than the meaning of the
    rules so they dont know when to break them
  • Required steps only prevent customer
    dissatisfaction but do not insure customer
    satisfaction. You must go the extra mile for
    that.
  • Customers want accuracy (quality) -gt availability
    -gt partnership -gt advice.

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Casting People Correctly - the Best 1st Solution
  • Your job is not to teach talent but help people
    earn the title talented by matching their
    talents tot he role and giving them development
    opportunities
  • To find talents, know the talents you are looking
    for
  • To help them improve their skills have them
    study the best performers, model their
    excellence, learn NLP to see how they move and
    think, and tape record what they say to make
    scripts
  • STRIVING talents - why they are motivated to
    push, stand out, be competitive or charitable,
    do they just want to be liked to be known a
    technically competent, ...
  • THINKING talents - how he thinks, weighs
    solutions, considers alternatives, ...
  • RELATING talents - who he trusts, fights with,
    builds relationships with, whom they are at ease
    with, who perform best with, ...

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Spend the Right Amount of Time with Your People
  • Write down on the left, in descending order, who
    is most productive. Write down on the right, in
    descending order, who you spend the most time
    with. Connect the two lists with lines.
  • Yes, spend time with strugglers, but best
    managers spend most time with their most
    productive employees. If you think your role as a
    manager is to CONTROL people or INSTRUCT others
    youll spend the most time with strugglers. If
    you think your job is a CATALYST, you are not
    fixing or correcting or instructing. You just
    spend time trying to figure out the best way to
    unleash peoples talents.
  • Set expectations
  • perfect each persons unique style
  • run interference for them and get out of the way

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Spend the Right Amount of Time with Your People
...
  • As a manager you are always on stage. People
    watch what you do and copy it or respond to it.
  • Human beings crave attention. If you pay less
    attention to the productive behavior of your
    superstars, youll get less of it. Because of
    indifference, your stars will start to do less of
    what made them stars in the first place.
  • Investing in your best
  • the fairest thing to do
  • the best way to learn
  • the only way to stay focused on excellence
  • I am going to be consistent with every one of
    you because Ill treat each of you differently.
    The harder you work, the more you perform, the
    more you meet my guidelines, the more leeway Ill
    give you. If not, you wont work here for long.

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How to Manage Around a Weakness
60
Remember this Test?
  • 1. As a manager, would you rather have an
    independent aggressive person who produced 1
    million in sales, or a a congenial team player
    who produced half as much. Explain your
    reasoning.
  • Pick the independent aggressive guy, even though
    they are harder to manage. Great managers arent
    looking for people easy to manage. They are
    looking for the talent to be world class.
    Therefore, take on the challenge of focusing a
    talented individual into performance instead of
    the challenge of turning nonproductive people
    into productivity.

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  • 2. You have an extremely productive employee who
    consistently fouls up the paperwork. How would
    you work with this person to help him/her become
    more productive?
  • Find out why this employee is having trouble.
    Maybe they lack training and if so, supply it. If
    they just dont have the skill for it, find a
    solution that enables them to turn around their
    weakness for administration and focus on their
    productivity instead.

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  • 3. You have 2 managers. One has the best talent
    for management you have ever seen. The other is
    mediocre. There are two openings available one
    is a high-performing territory and the second is
    a territory that is struggling. Neither territory
    has reached its potential. Where would you
    recommend the excellent manager be placed? Why?
  • Great managers always place the most talented
    manager in the higher performing territory. If
    the territory has not yet reached its potential,
    great managers will push for excellence as their
    measure and try to make that territory reach its
    full potential. Taking that territory to top
    excellence is just as challenging to them as
    moving a struggling territory above average.
    Then, take a turn-around expert and put them in
    the poor performing territory. If you put the
    less talented in the top territory, they will
    never make it the best and the poor territory may
    defeat your top manager, which sets up both
    people to fail.
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