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Leaders in today’s organizations need to continuously balance the expectations of three different groups of people—shareholders, customers, and employees. How these three groups are ranked within a company will largely determine the type of culture the organization has. A “shareholder first” organization is very different from a “customer first” or an “employee first” company.

In a recent article for Chief Learning Officer, best-selling author Ken Blanchard asks, “Who is customer number one in your organization? How is that impacting the return on investment, level of service, and levels of employee engagement in your company?”

 Using examples from several well known companies such as Southwest Airlines and WD-40 Company, Blanchard shows how companies that adopt an “employee first” mindset perform best.

But that’s only half the story, says Blanchard.  For best results, leaders need to combine a focus on people with a simultaneous focus on results.  It’s this one-two combination that delivers the greatest impact.

Investing in People

As Blanchard explains, “Leaders in ‘employee first’ organizations turn the traditional pyramid upside down so that the customer contact people are essentially at the top of the organization. In other words, the leaders work for the people who report to them.” This is the high investment in people part of the equation.

To illustrate this, Blanchard points to the philosophy of Garry Ridge, CEO of household-products manufacturer WD-40, who even goes so far as to remind managers of their mutual accountability to employees at performance review meetings. If a manager recommends that a person be let go—or “shared with the competition” as WD-40 calls it—the first question asked of the manager is: “What have you done to help your direct report succeed?” If the manager can’t show that he or she has coached and supported the direct report, the manager—not the direct report—might be “shared with the competition.”

Holding People Accountable

One of the benefits of this serious approach to mutual accountability is that it gives leaders permission to step in when tough love is called for—for example, when people engage in inappropriate behavior.

As an example, Blanchard points to Colleen Barrett, president emeritus of Southwest Airlines.  As Barrett explains, “We are very clear in telling our people what our expectations are. We hold them and ourselves accountable for meeting those expectations every day. Sometimes this means having a real heart-to-heart with people and reminding them what your values are. If you have been intentional and firm in explaining what your expectations are, that gives you the opportunity to point to specific examples where they haven’t exhibited the required behaviors.”

High Investment and High Expectations

As a leader, you need to be supportive and directive at the same time. It can seem like a lot of work, but it is necessary if you want to create the high-investment, high-expectations culture that makes all the difference. When people know that leadership not only expects the best from them, but is also backing them up, they feel safe, prepared and ready to step out to serve the customer in ways that unsupported employees just won’t risk.

What’s your organization’s approach to employee support and accountability? 

Do you use a high-investment, high-expectations approach to talent management? To read more of Ken Blanchard’s thoughts on this topic, check out The Upside-Down Pyramid here.

No, the coach didn’t actually die, but if you perform a “leadership autopsy” on the recent firing of Rich Rodriquez, the former University of Michigan head football coach, I think you’ll find that the ultimate cause of his demise was that he was killed by the culture because he didn’t build trust.

As a college football fan (and in the spirit of full disclosure, a rabid University of Michigan fan), and a student of leadership, I’ve found the Rich Rodriquez era at UM an interesting case study of how a recognized expert in his field, with a winning track record, could experience such turmoil and discord in 3 years that would lead to the loss of his job. His experience is a lesson for those of us in any type of leadership position. My conclusion: he was never a fit for the culture from the very beginning.

Some of that was by design. After 13 years of steady, yet mostly unspectacular success under Coach Lloyd Carr (save one shared national title in 1997), there was a move afoot by school leadership to shake things up and create a more dynamic and electrifying brand of football. Usher in Rich Rodriquez and his high-scoring spread offense, a system heretofore unseen in Michigan. So some of the blame of this failed venture falls directly on the shoulders of school leadership.

However, Rodriquez underestimated two factors (among many others!) that led to his downfall. The first was the power of the culture to kill his efforts to implement such a drastic change in philosophy. Stan Slap, an organizational consultant, calls this failure to recognize the power of the culture the “original sin” of a strategic implementation. Coach Rodriquez committed many cultural missteps when he joined Michigan. He said and did things that showed he didn’t understand or appreciate the longstanding traditions of the winningest program in college football history. When leaders implement a large organizational change, they have to remember that most people view change as a “loss.” People often lose perspective when change occurs so we have to remind them about what isn’t changing so they can have security in some form of consistency. Rapid organizational change rarely succeeds.

A second lesson that we can learn from the downfall of Rich Rodriquez is the importance of building trust. When it comes to building trust, there are four elements that need to be present: ability, believability, connectedness, and dependability. Rodriquez had ability in spades. Before coming to Michigan he was the head coach at West Virginia where he compiled a record of 60-26, four Big East titles, and six consecutive bowl game bids. But ability will only take you so far when it comes to building trust.

Rodriquez’s believability was damaged when NCAA infractions came to light during his second season. For a University who had never suffered any NCAA sanctions, this severely damaged the perceptions of his honesty and values. He also eroded trust through his lack of dependability. Dependability involves being organized and accountable in following through on commitments. Anyone who saw the repeated mistakes and disorganization of the Michigan defense this season can attest to this fact! But most of all, Rodriquez failed to build trust by connecting with folks. He didn’t show the aptitude for communicating well and building relationships. There were times he threw his players under the bus in press conferences and he seemed to be perpetually unhappy and angry over the state of affairs. Perhaps this is all a case of misjudgment, but when it comes to building trust, perception is reality.

By all accounts Coach Rodriquez was an earnest, hard working man who took pride in his efforts. We can learn from his experiences to help us in our own leadership journeys. We have to deftly manage organizational change and respect the power of the culture to work against our efforts, and we can leverage the power of the culture by building trust. Building trust in relationships is the key to success, whether we’re on the playing field or in the board room.

Once, while sharing her thoughts on leadership, Colleen Barrett, president emeritus of Southwest Airlines (stock symbol LUV), was asked if she was worried that competitors would now be able to steal her management ideas—like writing thousands of thank you notes to employees.  She said “no” because the real magic wasn’t in knowing the concepts, it was in doing the work.

For Barrett, doing the work is a key ingredient to the success that Southwest has enjoyed in the tough airline industry over the past forty years.  It’s also one of the reasons why best-selling business author Ken Blanchard wanted to work with Barrett on a new book that captures the real-life leadership examples that have made Southwest Airlines a model of good management. Titled Lead with LUV: A Different Way to Create Real Success, it’s just out in bookstores this month.

 “She does the things I write about,” says Blanchard. “The stuff that I’ve learned and taught over the years, it’s all in there with a real person who did it.”

And one of the things that Blanchard writes about often is the importance of celebrating both people and results.

As Barrett explains, “What’s important is the fact that you’re honoring people and acknowledging that what they do makes a positive difference. In the process, you are making heroes out of them. You are letting them know that you love them for their efforts and you want everybody to celebrate their success.”

But it does require doing the work.  And at Southwest, this means that officers hand-write notes to thousands of employees each year.

As Barrett explains, “Besides being loving, we know this is meaningful to our people, because we hear from them if we miss something significant in their lives, like the high school graduation of one of their kids. We just believe in accentuating the positive and celebrating people’s successes.”

You can learn more about the ways that Southwest Airlines takes the time to stop and recognize their people by accessing the first chapter of Lead with LUV: A Different Way to Create Real Success here.

Also, don’t miss a complimentary webinar that Colleen Barrett and Ken Blanchard will be conducting on January 26.  Hosted by Cisco WebEx, click here to find out more about this free Lead with LUV event.

Earlier this week, Fortune magazine announced this year’s 100 Best Companies to Work For, an annual listing of the companies that provide employees with the best combination of pay, perks, and culture.

It’s a great list that highlights some of the best employers, but sometimes the publicity that accompanies the list’s release gives people the wrong idea about what makes up an engaging work environment. While the consultancy that scores the companies, Great Place to Work Institute, goes to great lengths to measure each company on five serious organizational factors, the follow up stories tend to get reduced down to a series of unique perks and benefits that are fun to read and easy to describe.

That’s unfortunate because there are some very strong cultural concepts common to each of these organizations that can get lost in the shuffle. Here are the five items that each of these best employers has in common:

• Credibility—managers communicate the company’s direction and plans while involving others.  Leaders “walk the talk” when it’s time for action.
• Respect–the organization provides employees with a professional work environment that includes the equipment, resources, and training they need to do their job well.
• Fairness—compensation, benefits and rewards are distributed fairly and equitably.
• Pride—the company maintains a good standing in the industry and in the community.  The organization structures jobs so employees have individual work that they can be proud of.
• Camaraderie—the organization creates a hospitable work environment that is friendly, welcoming, and where people feel that they are part of a team connected by common values and purpose.

As we celebrate these great companies, it’s important to remember what makes them great. On-site saunas, concierge service, and a game room are all nice perks, but the real definition of a great place to work is an environment where employees experience trust, have pride in what they do, and enjoy the people they work with.

The research showing the connection between leadership and the bottom line continues to strengthen. Most recently, researchers Jack Zenger, Joe Folkman and Scott K. Edinger analyzed a database of 300,000 feedback reports on approximately 30,000 managers to answer six questions: 

• How does leadership drive profit?
• How do organizations and leaders maximize, if not double, profit opportunity?
• How do we capitalize on leadership as a means to profit and growth?
• What issues can leaders impact that will most effectively drive profit?
• What data supports the claim that extraordinary leaders double profits?
• How do we identify and develop extraordinary leaders?

Publishing their results in an article entitled How Extraordinary Leaders Double Profits, the authors identified concrete performance metrics that allowed them to compare measurable business results with leadership effectiveness. Using the data they were able to show the performance difference between business units with good leaders versus those identified as having poor leaders and to also identify the leadership behaviors that separated the two groups. 

Be sure to check out this article to learn more about the ways that leaders impact performance. 

If you would like to explore some of the ways that leader behavior is impacting performance specifically in your own organization and what the costs or ignoring it are, take a look at a Cost of Doing Nothing Calculator on The Ken Blanchard Companies web site.  It uses some of the same source material referenced by the authors of this article to help you calculate the impact of better leadership in your own organization.

Dr. Margie Blanchard, past President of The Ken Blanchard Companies who currently heads up the company’s Office of the Future, loves real work problems.  That’s because when you work on real issues instead of hypothetical ones, it really sharpens the process. 

You also solve a problem along the way. 

That’s why we have included real work action learning projects into the leadership development programs we have been building for our clients looking to develop their high potential executives.  By incorporating a real work issue into the process, we’ve found that it increases learning, promotes camaraderie and collaboration, and yields cost-effective results. 

You can get a feel for how this might work in your organization by checking out a recent article in Chief Learning Officer magazine.  The article describes how Dr. Bea Carson led three action learning teams and the results they achieved. 

You can learn more about Blanchard’s approach to leadership development and how we build real work scenarios into the curriculum by checking out the work being done at Skanska, where action learning helped a group of high potential executives grow together while simultaneously solving real work issues that saved their company money and increased revenue along the way.

What is the gap between current and desired performance, costing your organization on an annual basis?   A lot more than you might think going by the results of people who got a sneak peek of The Ken Blanchard Companies’ new Cost of Doing Nothing Calculator at the ASTD International Conference last week in Washington, DC.

In most cases, the size of this gap was over $1 million dollars in companies with 200 or more employees.

The Cost of Doing Nothing Calculator uses a couple of pieces of information—number of employees, annual sales, current turnover rate, and combines it with desired targets for customer satisfaction and employee productivity to generate a “cost of doing nothing” dollar amount.  It’s a great tool for identifying the impact of better leadership in an organization and also making the business case for a training initiative—especially leadership development.

Are you interested in calculating what your current cost of doing nothing is?  Just click here and follow the easy 3-step process.  It’s free, it only takes minutes to complete, and you get access to a complete personalized report immediately.

Most workers do not feel that employee performance reviews are valuable. That’s what Garry Ridge, CEO of  WD-40 Company discovered when he surveyed students in a business course he teaches at the University of San Diego. 

The problem, according to Ridge, is that most performance systems are used for the wrong reasons. They are either arbitrary, only done out of habit, or they are used to document evidence to fire someone. 

Instead, Ridge thinks that performance reviews should be used to develop people. It’s a philosophy he calls “Don’t mark my paper—help me get an “A” and it‘s a key concept in a new book he has coauthored together with Ken Blanchard called Helping People Win at Work. 

Helping People Win at Work is the first in a new series of books written by real-life CEOs describing how they have put the concept of “leading at a higher level” into practice in their organizations. 

For Garry Ridge that means having managers at WD-40 working together with their direct reports on Planning, Execution, Review and Learning. 

• Planning is all about setting goals and establishing the report card for the employee’s “final exam.”  It’s making sure that every employee knows exactly what he or she is being asked to do.
• Execution is where the manager has to keep up his or her end of the partnership relationship on a day-to-day basis, helping and coaching the employee to get an “A.”
• Review and Learning is a quarterly evaluation designed to answer the questions, “What did we set out to do? What actually happened? What should we do differently?”

 You can find out more about the concepts of Helping People Win at Work (including free access to the first chapter) by visiting the Blanchard website . You can also learn more by checking out an online interview with Dan Schawbel where Ken Blanchard discusses the book.

I’ve just fallen in love with a new television series that I’ve discovered online. The program is called Kitchen Nightmares and it features world-class restaurateur Gordon Ramsay, most famous for his television show Hell’s Kitchen.  In this series, Ramsay works with struggling restaurants all across the United States to see what he can do to help them return to profitability. 

The most fascinating thing that I found in watching Kitchen Nightmares is all of the different human resource issues that are being addressed.  It’s almost like a series of Harvard business school case studies presented in a fun, entertaining format.  For example, in the first episode Ramsay works with a family-owned Italian restaurant.  The question?  How do you tell the manager of the restaurant, who also happens to be the son’s owner, that he is the biggest problem holding back the business?

In another episode Ramsay works with a downtown Manhattan restaurant that is absolutely filthy.  The problem here?  Apathetic employees and incompetent managers.  Ramsay’s solution?  Fire the general manager and instead turn to the floor manager to run the restaurant while he simultaneously brings in a new chef.

In all of the episodes you have the opportunity to watch a wide variety of real life human resource problems solved on a practical basis.  I was struck by the complicated nature of the problems that each of these businesses faced and how it ultimately fell back to a people problem in all cases.  Certainly, in some of the episodes the issue also turns out to be poor promotion, a too-complicated menu, or an unfocused business plan, but in the end you can always trace the problem back to an individual. An egotistical owner, an incompetent manager, or apathetic employees who just don’t care anymore.  The result?  A poor experience for the customer, and of course, poor results at the cash register.

The series gives you a chance to see the subtle people issues that managers have to deal with on a daily basis and how, if neglected, ultimately cause the business to suffer. 

If you have ever wondered whether good people management matters, tune in. You’ll see real life examples of the difference that good leadership makes. Look for it under popular TV shows at www.hulu.com.