Decisioning Models for Leaders

By Mike Myatt, Chief Strategy Officer, N2growth

CEO Decisioning
You cannot separate leadership from decisioning, for like it or not, they are inexorably linked. Put simply, the outcome of a CEO’s decisions can, and usually will, make or break them. Those leaders who avoid making decisions solely for fear of making a bad decision, or conversely those that make decisions just for the sake of making a decision will likely not last long. The fact of the matter is that senior executives who rise to the C-suite do so largely based upon their ability to consistently make sound decisions. However while it may take years of solid decision making to reach the boardroom, it often times only takes one bad decision to fall from the ivory tower. As much as you may wish it wasn’t so, as a CEO you’re really only as good as your last decision.

“CEO Decisioning” is a skill set that needs to be developed like any other. As a person that works with leaders on a daily basis I can tell you with great certainty that all CEOs are not created equal when it comes to the competency of their decisioning skills. Nothing will test your metal as CEO more than your ability to make decisions. That said, nobody is immune to bad decisioning. We have all made bad decisions whether we like to admit it or not.  Show me someone who hasn’t made a bad decision and I’ll show you someone who is either not being honest, or someone who avoids decisioning at all costs, which by the way, constitutes a bad decision.

When I reflect back upon the poor decisions I’ve made, it’s not that I wasn’t capable of making the correct decision, but for whatever reason I failed to use sound decisioning methodology. Gut instincts can only take you so far in life, and anyone who operates outside of a sound decisioning framework will eventually fall prey to an act of oversight, misinformation, misunderstanding, manipulation, impulsivity or some other negative influencing factor.

The first key in understanding how to make great decisions is learning how to synthesize the overwhelming amount incoming information leaders must deal with on a daily basis, while making the best decisions possible in a timely fashion. The key to dealing with the volumenous amounts of infomation is as simple as becoming discerning surrounding the filtering of various inputs.

Understanding that a hierarchy of knowledge exists is critically important when attempting to make prudent decisions. Put simply…not all inputs should weigh equally in one’s decisioning process. By developing a qualitative and quantitative filtering mechanism for your decisioning process you can make better decisions in a shorter period of time. The hierarchy of knowledge is as follows:

  • Gut Instincts: This is an experiental and/or emotional filter that may often times have no current underpinning of hard analytical support. That said, in absence of other decisioning filters it can sometimes be all a person has to go on when making a decision. Even when more refined analytics are available, your instincts can often provide a very valuable gut check against the reasonability or bias of other inputs. The big take away here is that intuitive decisioning can be refined and improved. My advice is to actually work at becoming very discerning.
  • Data: Raw data is comprised of disparate facts, statistics, or random inputs that in-and-of-themselves hold little value. Making conclusions based on data in its raw form will lead to flawed decisions based on incomplete data sets.
  • Information: Information is simply an evolved, or more complete data set. Information is therefore derived from a collection of processed data where context and meaning have been added to disparate facts which allow for a more thorough analysis.
  • Knowledge: Knowledge is information that has been refined by analysis such that it has been assimilated, tested and/or validated. Most importantly, knowledge is actionable with a high degree of accuracy because proof of concept exists.

Even though people often treat theory as knowledge, and opinion as fact, they are not one in the same. I have witnessed many a savvy executive blur the lines between fact and fiction resulting in an ill advised decision when decisions are made under extreme pressure and outside of a sound decisioning framework. Decisions made at the gut instinct or data level can be made quickly, but offer a higher level of risk. Decisioning at the information level affords a higher degree of risk management, but are still not as safe as those decisions based upon actionable knowledge.

Another aspect that needs to be factored into the decisioning process is the source of the input. I believe it was Cyrus the Great who said “diversity in counsel, unity in command” meaning that good leaders seek the counsel of others, but maintain command control over the final decision. While most successful leaders subscribe to this theory, the real question in not whether you should seek counsel, but in fact where, and how much counsel you should seek. You see more input, or the wrong input, doesn’t necessarily add value to a decisioning process. Volume for the sake of volume will only tend to confuse matters, and seeking input from sources that can’t offer significant contributions is likely a waste of time. Two other issues that should be considered in your decisioning process as they relate to the source of input are as follows:

  1. Credibility: What is the track record of your source? Is the source reliable and credible? Are they delivering data, information or knowledge? Will the source tell you what you want to hear, what they want you to hear, or will they provide the unedited version of cold hard truth?
  2. Bias: Are there any hidden and/or competing agendas that are coloring the input being received? Is the input being provided for the benefit of the source or the benefit of the enterprise? 

The complexity of the current business landscape, combined with ever increasing expectations of performance, and the speed at which decisions must be made, are a potential recipe for disaster for today’s executive unless a defined methodology for decisioning is put into place. If you incorporate the following metrics into your decisioning framework you will minimize the chances of making a bad decision:

  1. Perform a Situation Analysis: What is motivating the need for a decision? What would happen if no decision is made? Who will the decision impact (both directly and indirectly)? What data, analytics, research, or supporting information do you have to validate the inclinations driving your decision?
  2. Subject your Decision to Public Scrutiny: There are no private decisions. Sooner or later the details surrounding any decision will likely come out. If your decision were printed on the front page of the newspaper how would you feel? What would your family think of your decision? How would your shareholders and employees feel about your decision? Have you sought counsel and/or feedback before making your decision?
  3. Conduct a Cost/Benefit Analysis: Do the potential benefits derived from the decision justify the expected costs? What if the costs exceed projections, and the benefits fall short of projections?
  4. Assess the Risk/Reward Ratio: What are all the possible rewards, and when contrasted with all the potential risks are the odds in your favor, or are they stacked against you?
  5. Assess Whether it is the Right Thing To Do: Standing behind decisions that everyone supports doesn’t particularly require a lot of chutzpah. On the other hand, standing behind what one believes is the right decision in the face of tremendous controversy is the stuff great leaders are made of. My wife has always told me that “you can’t go wrong by going right,” and as usual I find her advice to be spot on…Never compromise you value system, your character, or your integrity.
  6. Make The Decision: Perhaps most importantly you must have a bias toward action, and be willing to make the decision. Moreover as a CEO you must learn to make the best decision possible even if you possess an incomplete data set. Don’t fall prey to analysis paralysis, but rather make the best decision possible with the information at hand using some of the methods mentioned above. Opportunities and not static, and the law of diminishing returns applies to most opportunities in that the longer you wait to seize the opportunity the smaller the return typically is. In fact, more likely is the case that the opportunity will completely evaporate if you wait too long to seize it. 

If you develop the appropriate blend of a bias to action with an analytical approach to decisioning your stock as CEO will surely rise. Good luck and good decisioning…

Truth Matters…

By Mike Myatt, Chief Strategy Officer, N2growth

Truth MattersThere is simply no substitute for the truth. That said, how do you measure a person’s positional conviction? How do you know if someone is sincere in their communication? How do you know if you’re being told the truth, or just being spoken to in a manner designed to elicit a desired response? Listen to what’s being said…When attempting to evaluate the shifting sands of fluid messaging, or what I like to refer to as spin, examine the choice of words used in the composition of said messaging.

I have long believed that words matter. My experience has consistently shown that astute people listen carefully to the words a person uses in evaluating the constancy and sincerity of their message. If the strength, color, or tenor of an individuals nomenclature changes, common sense would dictate that the underlying message may be changing as well.

Perhaps I’m a bit old-school in my thinking, but in my world form over substance doesn’t get you very far. Call something what you will, but the facts remain the same regardless of how you choose to describe them. Those of you that know me have come to understand that I prefer to cut to the chase, and get to the root of an issue as quickly as possible.

While I appreciate the great oratory skills of those who communicate using wonderful word pictures, or the academics that can wax eloquent while always using best form of prose, I prefer my business communication to be quick and dirty. In the immortal words of Jack Webb: “The facts ma’am…just the facts.” Don’t get me wrong, I’m not word bashing as I enjoy and appreciate anyone who has command of a great vocabulary, but I don’t have time for a 30 minute explanation of something that could have been, and should have been, communicated in 2 minutes. Ah, the lost art of brevity, but I digress.

What all of us need to remain on guard against are the people (notice I didn’t say professionals) that always seem to speak at the 30,000 foot level. A high-level overview is fine as a summary, but certainly not for anything beyond that. Vocabulary should be a tool for communicating expertise, and not masking a lack thereof. Let’s define what I call the black-art practices of confusion:

1. Job security by confusion: Have you ever had an employee in a particular business unit or practice area paint the picture that things are soooo complex that only they can solve your problem? Nothing is too complex to be explained or understood, and no single individual is invaluable. Real knowledge should be transparent, transferable, and heavily leveraged, not horded or kept in isolation.

2. Sales by confusion: Have you ever been party to a sales presentation that was so sophisticated and technical that you arrived at the conclusion that: “surely these guys really know their stuff”; and as a result ended-up purchasing something that wasn’t at all what you thought it would be? Remember, if someone can’t explain the benefits to you in plain English, then the benefits probably don’t exist. The best communicators use clear and succinct statements, that are factually based, and that add value. They are never vague or ambiguous.

3. Intimidation by confusion: We’ve probably all had someone attempt to steamroll us at some point in our careers…multi-syllable techno jargon used in circular conversational patterns with an authoritative posture doesn’t mean someone knows what they’re talking about, rather it usually means they are attempting to dazzle you with feigned brilliance in an attempt to intimidate. Remember that opinion doesn’t miraculously become fact simply by adding emphasis.

So, what is the best way to deal with the black art of confusion? Force people to justify their positions by being specific. Make these wizards’ of confusion give you examples of relevant experience, or have them explain their business logic in understandable terms. Make sure that your client’s, vendors, suppliers, partners, investors and employees all know that you value clear, concise, lucid and accurate communications.

Bottom line…say what you mean, mean what you say, and require the same of others.

Leadership & Employee Engagement

By Mike Myatt, Chief Strategy Officer,N2growth

Employee EngagementThe topic of “Employee Engagement” is something that many CEOs tend to struggle with. Long gone are the days where the executive leadership of a company can remain sequestered in their offices with an internal focus on hard metrics. Given the current economic climate, it takes far more than cost-cutting to survive. It is the CEO who understands the need for focus on the soft metrics of customer centricity and employee engagement that will create sustainable growth in revenue and brand equity. In today’s post I’ll examine the need to have a fully engaged work force…

Before you read any further, I want you to stop and ask yourself the following question: How many of your employees are truly passionate about your company, its values, its vision, its mission, and the role that they play within the organization? Don’t fool yourself…conduct a harsh, critical analysis and come up with a true head count of the passionate employees within your organization.

Your answer to the question above should be a very telling sign about the overall health of your business. Are people just showing-up and punching the clock to collect a paycheck, or are they personally consumed and committed to achieving the company vision? Are your employees corporate evangelists serving as a motivating force to be reckoned with, or do they gather in small groups to gripe and complain about all the things wrong with the company and its leadership?

The key to having an engaged workforce is to have a passionate workforce. And the simple truth of the matter is that no single person in the company can instill passion in the ranks like the CEO can. Despite the consensus recognition that employee engagement matters, the enormity of its impact on the company’s bottom line still appears to be misunderstood by most CEOs. I rarely talk to a CEO that doesn’t understand this principle in concept, but yet I rarely see chief executives who put theory into practice…

So it begs the question, why are CEOs listening but not taking action? The answer seems to be that CEOs continue to allocate considerable effort and resources toward engineering the corporate strategy, yet they seem to be unaware of what forces can prevent said strategy from being delivered successfully. Not surprisingly, employee engagement is often the critical missing factor.

As the CEO you must also become the chief engagement officer. Operating in a vacuum and being out of touch is never a good position to find yourself in as the CEO. I have consistently espoused the value of walking the floor, dropping in on meetings on an impromptu basis, taking employees of all ranks to lunch, and any number of other items that focus on raising your internal awareness and creating a passionate workforce.

It is your passionate employees who are the franchise talent (regardless of position) you should be building around. If you can’t get employees to see the light and become passionate about the company and their contribution, then seek to replace them as quickly as possible. Just as passion is a positive, contagious trait so are apathy and dissatisfaction. Passionate employees are productive, energized, committed and loyal assets. Apathetic employees quickly become disenfranchised liabilities that will hurt both productivity and morale. To drive home the point of how much I value passionate employees, I would take a moderately talented but passionate employee over a very talented but complacent employee eleven times out of ten…

Truly great companies are built around passionate employees. When you walk into a dynamic, thriving company you can sense the passion…you feel a certain buzz and fervor that pervades everything. Contrast this with a company that feels as if it has no pulse…If you’ve ever walked into an organization that feels like rigor-mortis has set in, you know what I’m referring to…In today’s economy, the old saying that “the only thing worse than an employee who quits and leaves is the employee who quits and stays” has never been more accurate.

As a leader you need to understand that your employees not only want to be led, but they want to be led by a passionate leader. Ultimately employees want to be passionate about what they do; in fact, they’ll go to the ends of earth and sacrifice tremendously if passionate about the endeavor. Think of the employees that started off with Gates and Allen at Microsoft, or those that worked with Phil Knight in his garage before Nike even had a name, or those employees that endured the early days with Larry Page and Sergey Brin at Google…it was their passion and commitment that helped change the landscape of business, not their starting salaries.

To build an extraordinary company, you must light the fire in the bellies of your workforce…You must get them to feel passion about your organization and to connect with your vision. You must get your employees to engage. As the CEO, your ability to transfer your passion to your employees is the essence of being a great leader…So much so that if you can’t accomplish this, you simply can’t be a great leader. Think of any great leader, and while you’ll find varying degrees of skill sets, intellect and ability, I challenge to name even one that did not have passion, as well as the ability to instill said passion in team members.

Thoughts?

Organizational Theory

By Mike Myatt, Chief Strategy Officer, N2growth

Since Organizational Theory, and particularly  Organizational Design are such hot topics these days, I thought I’d poke a bit of fun at that old corporate tradition that is the Organization Chart. Over the years I’ve seen every type of org chart in existence. Some have come and gone only to come again. Every year or two the latest revolutionary thinking in corporate organizational theory spawns a new form of charting. The dynamics of corporate organization are so revered by B-school professors and management consultants that an entire generation of corporate management has drunk the org chart Kool-Aid.  These managers often rush to adopt the latest thinking without any consideration for whether or not the new form of structure is even appropriate for their business. So powerful is this dynamic that entire companies and numerous products have been built to support these latest trends. In the text that follows I’ll share the truth about org charts…

So, is an org chart a corporate asset or a waste of time? The answer depends on the purpose behind its creation, the process used to create it, and the corporate purpose for the existence of the chart post creation. The following list contains my top 10 reasons not to create an organizational chart:

1. To give the CEO an opportunity to view his name at the top;

2. Because you need to beef-up your management presentation and you have room for an extra PowerPoint slide;

3. Your management consultant told you to create one;

4. The business planning software you purchased has a template for one;

5. Your CFO just read a new article on corporate organizational theory;

6. You just attended an off-site where someone drew an off-the-cuff chart on a dry erase board and it looked good;

7. When reviewing your competitor’s website you noticed they had one, and well your website needed updating anyway;

8. There wasn’t anything better for the intern to do;

9. Someone got a promotion, and;

10.  It just seems like you should have one.

Putting the humor aside, a business should in fact have an organization chart, in fact several of them. Sure, a sincerely motivated, properly constructed, and actively implemented organizational chart can in fact help refine the operational aspects of any business, but it should be so much more than that. The development of an org chart should be a serious initiative born out of solid underlying business logic, process, methodology, and creativity.  Culture and environment are considerations that are often times completely ignored in the design of and org chart while perhaps representing the most critical architectural elements. I prefer to think of an org chart as a relationship map rather than a rigid hierarchical matrix of reporting lines. People, relationships, and influence matter far more than reporting lines.

Again, organizational design is about far more than drawing circles, boxes, hard lines and dotted lines…it’s about relationships, engagement, influence and outcomes. If whatever form of schematics utilized don’t  roll-up into a representative illustration of an ecosystem comprised of communities of networked relationships that create the right outcomes, you’re missing the point. A chart is static – an ecosystem is living. Organizations that run according to static documents which reflect a snapshot in time are prone to breeding obsolescence by living in a status quo mindset. Conversely, organizations which focus on how to expand and improve relationships, influence, and engagement rather than just document it find themselves creating a culture that embraces leading change and innovation.

There’s an old joke in business circles that says “every company has two org charts…the one that’s put into graphical form and incorporated in the business plan, and the one that never gets published but is actually representative of how things really work.” The process of corporate organization is most succinctly and easily understood by using the following order of operation which I developed more than two decades ago: “Values should underpin Vision, which dictates Mission, which determines Strategy, which surfaces Goals, that frame Objectives, which in turn drives the Tactics that tell an organization what Resources, Infrastructure and Processes are needed to support a certainty of execution.” (Mike Myatt 1988)

Put simply, any analysis of organizational paradigm that doesn’t present a clear picture of who, what, when, where, why and how your organization will function to produce the designed outcomes should be immediately recognized as flawed. I have observed all types of organizational structures (in vogue, antiquated and otherwise) succeed, and I have also seen them fail. It is not the “type” or the “style” of chart used that works or doesn’t, rather it is the process of design that was used in creating the org chart that will determine its usefulness, functionality and adoption. That said, my personal view is it’s simply silly to confine someone to a box – the goal should be to expand influence not restrict it. My best advice is to build a very flat organization, and where the purpose of any framework is to expand relationships not limit them, and to drive complex decisioning down as low as possible within the organization structure.

Please feel free to share your thoughts regarding organizational theory by commenting so that others may benefit your experience as well…

#1 Consulting Blog for 2009

By Mike Myatt, Chief Strategy Officer, N2growth

#1 Consulting Blog 2009We found out today that the N2growth Blog was recognized as the #1 Consulting Blog for 2009 by PostRank. To be ranked as the Top Consulting Blog ahead of firms like Deloitte & Touche, Booz Allen, A.T. Kearny and Towers Perrin is a wonderful honor. What I most appreciated about the list was that the ranking was based upon engagement and influence which means that we’re really connecting with our readers. As some additional frosting on the cake we also made their list of Top Leadership Blogs for 2009 coming in at #12. All I can say is thanks to those who frequent our blog as these results could not have been achieved without you. We’ll work hard to keep up the good work and to continue to earn your loyalty post by post. Last, but certainly not least, thanks to PostRank for recognizing our efforts.

Consequences of Bad Leadership

By Mike Myatt, Chief Strategy Officer, N2growth

Disclaimer: this video has a political slant, but that’s not why I included it in today’s post. Whether you’re republican or democrat, this video should make you cringe…To watch what has happened to the City of Detroit is just plain hard to watch. That said, and regardless of political sentiment, it shows exactly what happens when bad leadership is allowed to flourish. What happened in Detroit is a result of bad political leadership, bad financial leadership, bad corporate leadership, bad academic leadership, bad community leaderhip, bad family leadership, and the list could go on. If you can watch this video and not be absolutely disgusted, you may be part of the apathy that allowed something like this to happen in the first place. Bad Leadership has Consequences.