Improved Leadership. Competitive Advantage.

Several years ago, we worked with a client who suffered continually poor performance during a Refueling Outage. We suggested some minor staffing realignment prior to the Outage along with changing the format and specific times of critical meetings during the Refueling Outage. Immediately, three managers of varying ranks shot back, “No way. We tried that in 1983, and it won’t work.” We were stunned. But it happens all the time. Let’s strip away the emotion and examine this phenomenon critically.

First, one of the interesting aspects of this story is that two of the managers were in high school in 1983. It was clear that the narrative had been passed down year after year. And it had the gravity and force of fact despite only one of the three managers actually being present at the time. Stories are an important part of the organization. They help transfer knowledge and provide an identity to an organization. However, they become particularly dangerous when they create a bias that many can’t identify or just refuse to challenge.

Second, the response to our recommendation also illustrates the folly of small sample sizes. The absolute scientific and statistical minimum to generate an appropriate inference is from a sample of at least 30. In other words, the research community often considers generating conclusions from samples less than 30 un-scientific, inappropriate, or dangerous. In this case, these three managers were generalizing from a sample size of one that occurred about 30 years earlier!

Third and related, their response shows the power of the prior hypothesis bias. Here, we can look to Starbucks for guidance. The founder and CEO of Starbucks, Howard Schultz, originally pitched his idea of coffee shops with high priced specialty coffee to potential investors and partners. They laughed at him, and told him that it would never work in the United States. We had Folgers, and nobody would pay $1.50 for coffee. But Schultz argued that the times were changing. Americans were getting wealthier (because of women entering the workforce en masse), but also getting busier (also because of women entering the workforce en masse). Schultz argued that men and women would pay for a cup of coffee for the mere convenience and also could enjoy some peace away from a busy home. Besides, he had evidence that it worked in Italy for years. The potential investors balked claiming that we couldn’t be more different than Italy. Starbucks was born because a leader realized that the present was different than the past, and changes in the environment would allow something like Starbucks to succeed. Back to our case, organizations learn and grow and change every day and every year. So, just because something failed 30 years ago, doesn’t mean it will fail now. The organization with new and different (and hopefully better) people may be better equipped today to enact the change.

So, remember, we should always learn from past mistakes, but we shouldn’t be bound to them. There are, indeed, cases where it is time to try it again. To discuss this idea in more depth, please reach out to one of the founding partners of ELP.

The domain of corporate finance has taught us to pay very close attention to ratios—financial ratios that is, ROA, ROE, ROI, the quick ratio. These are just a handful. What if we told you, though, that the most important ratio isn’t financial? Rather, it is leadership in nature, and we call it the ‘SAY:DO’ ratio. It is very simple, and it is a numerical indicator of how well you walk the walk.

If you’ve earned a SAY:DO ratio of 1/.50 that means that for everything you say as a leader, you back it up 50% of the time. That’s not so good—better is a 1/.75 ratio. This means that you follow-through on your verbal commitments about 75% of the time. Of course, the best ratio is the 1:1 ratio. This means that you deliver on ALL of your verbal, written, formal, and informal commitments. You hold your word. You follow-through. You make true the commitments you make to others.

A couple of notes here…. First, this is the hallmark of great leadership. When a SAY:DO ratio is 1:1 that means you set the example. This may hurt a bit, but it is impossible to be a transformational or revolutionary leader without setting the example. Second, this is a necessary condition for trust. When you have a 1:1 ratio, you are building trust because you are delivering on your commitments. Third, it is the followers—not you—that determine your ratio spread. You may think your SAY:DO ratio is a perfect 1:1. What you think pales in comparison to the feelings and perceptions of those you lead. Finally, this ratio should apply in personal, as well as, professional circles. What true value is this ratio if it is only applied to one dimension of your life? Extending this logic just a bit unearths an even more important maxim—make commitments sparingly and only when you know you can “cash the check”. Sheer probability suggests that the more commitments you make, the harder it will be to deliver on each one. So, make commitments and promises with caution and restraint, and be a great leader by under-promising and over-delivering. Nobody gets disappointed here.

To learn more about our leadership ratios, call Robin Bichy, an ELP founder and principal, at 703.999.5676. This may be the most important ratio you’ll ever manage!

Over the last several decades, we’ve observed and worked with hundreds, if not thousands, of leaders. When it comes to feedback, we’ve come up with a taxonomy—an organizing principle—that seems to apply across leaders and across settings. And it involves feedback.

Leaders seem to embrace feedback along one of three distinct lines. The first, and the worst, is the defensive orientation. A leader with this orientation never solicits feedback directly. And when he/she does get unsolicited feedback, they become defensive, angry, and blaming. They hunker down, and they don’t get better. Predictably, they get worse. The next step on the evolutionary feedback hierarchy is those that hold, what we call, a passive but welcoming feedback orientation. Leaders with this orientation, never ask for feedback. They are never proactive about pulling in ways to get better. But when they do get constructive, yet unsolicited, feedback, they tend to embrace it; and they get better from it. By far, the most advanced orientation, and the one that holds the most appeal, is what we call Feedback Seekers. These types of leaders play offense. They are always on the move, asking intrusive questions about their performance and behaviors. To these hard chargers, every piece of feedback is a unique opportunity to learn and to improve. Of course, this demands huge stores of humility along with, ironically, confidence. Confidence is required to put yourself out there with the chance that you may not like what you see or hear.

So, here’s our Leadership-In-Action assignment for you. Sometime this week, approach two personnel that you lead, and ask them for two things that you could do differently or better to be even more effective. They may be shocked—especially if you've never done this before. Or, worse, they may not feel safe giving you the feedback. We encourage you to press while ensuring their safety. So, don’t let them off the hook. They can email it to you, tell you to your face, and you can even give them time to think and reflect. But, just don’t let them get a pass. Just as we, as leaders, need to build the habit of receiving feedback, equally important is developing the skill in our subordinates to deliver feedback.

Here’s some feedback now. Call or email Robin Bichy today, one of the founders and principals at ELP, to better understand how to leverage this pioneering feedback perspective in your organization.