Developing the right leaders and culture to get results from your business

I caught up with the renowned Human Resources guru Norm Smallwood to get his thoughts on how organisations can develop the right leaders and culture to drive the business. Norm Smallwood is a recognised authority in developing businesses and their leaders to deliver results and increase value. His current work relates to increasing business value by building “outside in” organisation, leadership, and people capabilities that measurably impact market value.

1.       Does leadership quality play a significant part in the success of the organisation?

·         Absolutely yes. Several years ago Dave Ulrich, Jack Zenger and I wrote a book called Results Based Leadership that looked at the connection between leadership qualities (or competencies) and results. We believe that leaders should start by identifying the needs of their stakeholders (customers, investors, employees, the community, etc.) and then build their qualities so that they can add value.

2.       What does research show and what is happening in practice?

·         We have done research and written several books and articles on the connection between leadership and investors (How Leaders Build Value and the Leadership Capital Index), leadership and customers (Leadership Brand), leadership and employees (HR from the outside in) and so on. In practice, most organisations don’t start with their stakeholders they start with the leadership qualities that they think they should improve.

3.       How do you measure the quality of leadership in an organisation? What are the indicators we can track?

·         In publicly traded companies, we look at Price to earnings ratio over a ten year period of competitors in same industry who have faced same challenges during the same time period. Two companies can have the same earnings but have very different market values depending on their multiple e.g. company A and B both have earnings of 10. Company A has Price to earnings of 10 and company B has price to earnings of 15. Company A has market value of 100 (10 x 10) and company B has market value of 150 (10 x 15). The logic is that company B has higher levels of investor confidence in the future because of quality of leadership.  

·         In non-publicly traded companies, I’d recommend that you do some interviews of internal and external stakeholders, especially customers to get a view of how they perceive the quality of your leaders.

4.       Does succession planning work? If so how do you make it work?

·         Succession planning does work. Senior leaders of a company should form a team that reviews succession on yearly basis. This process is typically supported by information from HR. Many companies use the 9 grid which looks at performance and potential i.e. is performance low, medium or high and is potential for future, more senior roles, low, medium or high. Candidates are placed within this grid.

·         The best companies for developing talent also utilise a concept called corporate talent which means that a group of high potentials careers is owned not by their current geography, business or function but by the company. In this way, the best talent can be moved and can’t be held onto leaders in their current area.

5.       What do you think is the role of HR in leadership development?

·         Line managers should “own” leadership development and HR should support them to develop leaders. We see six elements that HR can help to build a capability of leadership: 1) build the business case for why we should invest; 2) clarify what effective leaders should know, be and do (their qualities); 3) assess leaders; 4) build the plan to invest in leaders through job assignment, training and development and building a culture of leadership; 5) Measure the impact of the investments in leadership (much easier if there is a business case; 6) communicate with internal and external stakeholders about how what we are doing to improve leaders will also improve our results.

6.       Is organisational culture real? If so how do you build a culture that supports the business?

·         I talked about outside in leadership that starts with customers and external stakeholders. Same holds true for culture. A high performing culture exists when employees resonate with customers at every touch point. To do this well, need to clarify the customer value proposition and the firm brand identity (why customers buy from us) and to make that real to customers and to employees. This can be done by mapping every touch point and embedding the value proposition at each touch.

7.       How important is coaching with regard to developing effective leaders?

·         I believe that coaching is an essential component to developing leaders. There are many kinds of coaches: coaches that can help me stay on track, coaches that give me feedback on my interpersonal skills and help me improve them, coaches that give me insight into my strategic priorities. These coaches can be external or internal. But, having someone help to hold me accountable to what I said I would do is a key to becoming an authentic leader who does what s/he promises to do.

In 2000, Norm co-founded The RBL Group with Dave Ulrich. Norm has co-authored eight books: Real-Time Strategy, Results-Based Leadership, How Leaders Build Value, Change Champions Field Guide, Leadership Brand, Leadership Code, and Leadership Sustainability. Harvard Business School Press published his latest book, Agile Talent, coauthored with Jon Younger in February 2016.  He has published more than a hundred articles in leading journals and newspapers including Washington Post, Forbes, Harvard Business Review and Financial Times and has contributed chapters and Forewords to multiple books. Norm has been a frequent blogger on HBR Online where his blog on Personal Leader Brand was highlighted as one of ten most read of 2010. Norm was a faculty member in executive education at the University of Michigan in the Ross School of Management between 2001 and 2003.

This interview was done with Memory Nguwi. Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone 481946-48/481950/2900276/2900966 or or email: mnguwi@ipcconsultants.com  or visit our website at www.ipcconsultants.com

Leading change – why some turnaround strategies are failing

A brief review of organizational performance over the past five years indicates a lack of consistency in business performance. Considering the number of organizations now finding themselves in non-viable positions we are forced to conclude that earlier reported successes were probably due more to chance factors than to capable executive leadership. Research indicates that up to 70% of organizational climate which is a determining factor in an organizations success can be attributed to leadership style.

For an organizational leader to create an effective climate for success they need to possess sufficient technical depth in the “core” business. This will allow them to accurately analyse organizational performance reports and identify potential problem areas early enough to make important changes. A number of organizations in Zimbabwe are led by brilliant scholars who possess all the academic qualifications one can think of but lack the practical “know how”. This forces them to rely on the reporting of subordinates which is frequently tainted with incorrect facts if not based on non-factual data. Perhaps the time has come for us to take stock of the fact that, the state that an organization finds itself in is a true reflection of the organization’s leader. In recent times we have found it convenient to blame the environment for all of an organisation’s misfortunes but the truth is that the real starting point is self introspection.

Executive leadership is a key source of competitive advantage and the question each CEO or Managing Director should be asking themselves is, “do they have the key competencies required for the job and the correct mind-set about their responsibilities to themselves and other people with whom they work?” Transformational leadership is what responsible CEOs should be considering with a view towards advancing the interests of the stakeholders, as opposed to individual interest. Most corporate scandals in Zimbabwe and the world over involve the pursuance of personal interest at the cost of organizational sustainability.

Transformation will not take place as long as decision makers continue to base appointments on non - job related factors. Using such criteria for appointments also results in the appointees owing their allegiance to certain individuals as opposed to shareholders. This has resulted in the flourish of unethical business practices. Each individual manager has a responsibility to the shareholders which should be reflected in the way they conduct the company’s business. This involves reporting unethical business regardless of reprisals.

We should learn from what is happening around us by immediately changing a course of events to correct a faulty process or outcome. This in itself represents a change of mind-set. In order for us to implement this important principle we need to change the manner in which we react to events in organizations such as “killing the bringer of bad news, encouraging people not to rock the boat or insistence on continuing to do things as they were done in the past”.  As part of the journey of change, some organizations need to re-look at their executive teams and ask themselves if they have the capacity and willingness to embark on the journey that is essential to the organization’s continued viability. Decision makers need to take the drastic action of getting the “right” people on the bus and taking the “wrong” people off the bus.

Leaders need to take the stand for personal change by starting to do their own work and thus providing a model to the workforce which they seek to influence. If we consider that only 50% of most workforces have the motivation to keep learning and improving, 4 in 10 people cannot work cooperatively and that only 19% of entry level applicants have adequate self-discipline for their jobs, we are made aware of why leaders are fundamental to the success of an organisation. Leaders need to start behaving differently, make the hard changes in themselves and realize that its as much about changing their own personal lives as it is about changing their organizational roles. This conscious approach to transformation can create conditions required for discovering the future and ways of being that our organizations and society need in order to thrive.

More still needs to be done to improve customer service at Banks

We recently undertook a research to get to better understand the opinions of the banking public about their respective banks. This was the second year we have run this survey – the first survey was in 2012.

Between November 2013 and March 2014, 872 bank account holders were asked 15 questions related to their bank. The questions ranged from their customer service experience to product offerings amongst others.

96.90% of the respondents were currently employed, 3.10% were unemployed. 67.00% of the respondents were males and 33.00% were females. 19.00% were non-managerial employees, 23.70% were part of junior management, 29.10% were in middle management, 16.00% were senior managers and 10.50% were executives. 7.40% of the respondents earn an income of US$ 500.00 and below per month; 27.90% earn US$ 501.00 – 1000.00; 44.90% earn US$ 1001.00 – 2999.00; 11.10% earn US$ 3000.00 – 4999.00 and 8.70% earn over US$ 5000.00 a month.

The aim of the study was to establish the level of engagement that customers currently have with their banks. Customer engagement is defined as the degree of customer connection with a respective company. It is measured by the degree of satisfaction that customers have with the company’s various touch points, be it, the internet, phone, staff, and transaction services. Many of the challenges that banks are currently facing can be addressed through a defined focus on customer engagement.

Our research revealed very interesting findings:

·         The next engagement score of 11 out of 12 participating banks increased by over 50% from what we observed in 2012.

·         Interestingly, although customer engagement is increasing, 74% of the respondents want to move from their current banks. This finding is similar to what we observed in 2012 where a similar 74% of the respondents wanted to move banks. The key variance we noted was that of preferred banks, that is, the banks that the respondents want to move to. As per the current survey, the top 3 banks that the respondents would want to move to are international banks. This is as compared to 2012 where 1 international and 2 local banks were the most preferred.

·         65% of the respondent say their customer service expectations are significantly higher than they were in 2009 (when the economy was dollarized).

·         Most banking sector customers (44%) view courteous bank tellers as what they like most about the service at their bank. This was followed by 35% of the respondents who say they appreciate the efficient service provided by their banks (that is, fast moving queues, quick response and resolution of queries).

·         Inasmuch as efficient service is what 35% of the respondents appreciate the most about their bank’s customer service; the same issue appeared the most when we asked the respondents what they dislike about their current banks. 31% said their bank was inefficient (that is, queues are long and move slowly and their banks take long to respond to and address their queries).

Research has revealed that fully engaged customers spend more, stay with you longer, and are more profitable than average customers. It is not surprising to know that organisations that have placed customer engagement at the foundation of their marketing strategy tend to win in the market. These organisations understand a simple fact: organizations that engage their customers outperform those that do not. To achieve customer engagement, organizations need to align themselves around the idea of building a base of high-value, committed customers. Engaged customers are less likely to jump ship when competition comes.

Our findings also show that although many of the expectations that customers have of their banks are really realistic and achievable, very few banks are living up to them. The consequences for those banks that that continue to ignore customer needs will be disastrous. The era of traditional banking has passed. Traditional banking players have an urgent need to overhaul their current approaches to customer engagement. Customer engagement interventions need to be immediately implemented or risk a mass exodus of your banks’ clientele.

To receive the full Banking Sector Customer Engagement Report outlining detailed bank specific results, contact me on the details below.

Mystery Shopping – a must do for every organisation

Poor customer service in Zimbabwean companies remains a cause for concern. There are some companies that pride themselves on good customer service and really put effort into ensuring that their customers are served well. There are however, other companies which do not seem to make an effort, or to be bothered at all, by customer service, or the lack thereof.  It is interesting to see how some companies ignorantly believe that their employees’ customer service skills are ‘fine’ or ‘great’ but when you interact with their front-line employees you are appalled at the poor customer service.

This information gap is usually caused by ineffective methods of observing levels of customer service and collecting customer feedback. Many front-line employees behave very well in the presence of superiors; but once their superiors are gone, they return to their usual behaviour. Employers can learn a lot by carrying out a mystery shopping exercise and using this to get feedback on the real customer service practices pertaining in their organisations.

Mystery shopping is a tool used to measure the quality of service and compliance with customer service procedures. The mystery shopper’s identity and purpose is not known by the employees being evaluated and employees themselves are not aware they are being assessed. Mystery shoppers perform specific tasks such as purchasing a product, asking questions or registering complaints whilst observing the employees response. Detailed notes on the observations and experiences are then developed and submitted to management.

Mystery shopping can be done physically – as a walk-in customer or over the phone. If done over the phone, the person doing the mystery shopping calls your offices, asking for a particular service. As with the physical mystery shopping, the Consultant deliberately asks a series of questions with the objective of testing your employees’ customer service skills.

The major benefit of using mystery shopping is that you will get to know the state of your organisation’s customer service first hand. It is best to receive the unedited notes and voice recordings from the mystery shopping exercise so that you can really see what is happening in your company.

Mystery Shopping helps you to understand and satisfy your customers with greater precision. Most of the time, organisations assume that they know what customers want and do not bother to research. They then develop solutions based on these assumptions and are very surprised when the solutions don not work! Customer service interventions should be evidence based. If they are not evidence based, you are wasting your time. When you have the feedback from the mystery shopping exercise, you will be better placed to know exactly what to fix in your company.

I usually recommend that companies perform a mystery shopping exercise before and after any customer service training intervention. In this way you ensure that your training is evidence based and targeted to where the customer services problems and opportunities really are.

Mystery shopping can be done internally or externally by engaging customer service experts. Research has however shown, that if you engage external people, your chances of getting an impartial opinion on the overall performance of your organisation increases. The shoppers should be well trained and should be able to objectively interact with your employees to get you reliable information. In all cases, the exercise should be done discretely. The fact that there is no prior knowledge of the mystery shopping exercise also ensures that your employees behave naturally.

Lastly, managers need to know that mystery shopping is not a witch-hunting exercise. Further, the results of the mystery shopping should not be used to dismiss employees – this is inadmissible before the Law. Instead, mystery shopping should help you target training, develop better policies and produces around customer service all with the objective of increasing customer satisfaction and customer loyalty.

Whats Your Strategy For Ensuring Product Knowledge?

Have you ever noticed that when you visit service providers you encounter employees who tell you they have no idea about a product that the company is selling? I have had many encounters with employees who are clueless about the company’s products. In some instances you also get companies launching products into the market when the majority of their employees are in the dark.

Imagine the amount of business companies would be generating if every employee is fully conversant with company products. Each employee will be a brand ambassador of the company. Each employee will be actively promoting company products even if they are off-duty because they will have enough knowledge about the products. This is not what is happening on the ground in many organisations.

How should this be handled? I remember years back when I was working for one organisation every employee would be tested for product knowledge every quarter.  You would be picked at any time of the day and be required to sit for the product knowledge test there and there. There would be no prior warning and employees would be chosen randomly. The tests would be changed constantly and so in a year you would right four different tests. This kept every employee well updated on company products. The organisation also made an effort to ensure that employees are well updated on products and services new and old. This information will be readily available through the company intranet and other company forums. Getting a score below 80% would attract disciplinary measures. This program worked wonders for this organisation including revenue growth and top of the drawer customer services.

In most organisations in Zimbabwe, employees and even people in customer service has very little knowledge about the company products. This is precisely why you find that you get refereed from one person to the other when you inquire about certain services. Organisations need to invest in educating every employee about their products and test employees regularly on product knowledge.

Organisations need to realize that customers get frustrated when they are receiving assistance from people who have very little knowledge about company products. With competition beckoning in every sector of the economy organisations with better product knowledge at every level and every department will fare better than those that take this important aspect of the business for granted.

Lack of soft skills: The biggest challenge to Zimbabwe’s economic recovery

The biggest challenge facing our country is not the lack of money but the lack of soft skills in our managers. We have highly skilled people who have been praised all over the world for their work ethic. Our own assessment over the years indicates that technically Zimbabweans are gifted but they lack one group of skills that is needed in a struggling economy: soft skills.

Have you noticed that most organisations that are clamoring for more money from banks and shareholders do not have the basics needed to run a successful business?  Organisations need both technical and people management skills as a starting point before borrowing money. Some organisations have borrowed money and they still fail. Once they fail they blame the country’s politics and economy when the fault lies within the organisation. Organisations must do proper due diligence of the soft side of business before borrowing money or acquiring new equipment. Without this shareholders will continue to lose money.

Across all sectors of our economy the technical skills depth required to handle any job are available. Managers however lack the skills to manage people. Here we are talking about people management skills. This problem is exacerbated by the fact that no single university in the country or even outside teaches people management skills. Yes, universities and colleges teach human resources management which is not the same as people management. Most universities and colleges teach technical human resources skills that are normally taught to human resources professionals. What is required is for universities and colleges to teach people management skills focusing on how to deal with people and understanding that people are not objects. Managers need to understand that people have emotions and they should be handled differently from machines.

Most managers lack the Emotional Intelligence to handle people at an emotional level. The lack of such skills has led to so much disillusionment in many organisations. In Zimbabwe you rarely come across employees who say their managers look at the emotional side of the business. This leads to low employee engagement which in turn affects the level of employee productivity. Low employee engagement is an issue that should be handled at the highest levels within the country. Industry leaders and politicians rarely talk about the impact of low employee engagement on productivity.

Most managers use threats to manage their subordinates. However, if they are educated in the psychology of people they would know that threats do not produce the best in people. If threats worked there would be no thieves. What they need to understand is that behavior is a function of its consequences. People do what they do because of what happens to them. Managers need to understand that for instance if significant positive performance improvements were to happen they need to apply both positive and negative reinforcement. However the reinforcements works only if they are certain and immediate. Look at this, if AIDS was killing people on the spot, there would be very few infections taking place. The reason why people continue to be infected is because the consequence is in the future and is uncertain because people can die of other causes besides AIDS.

Apply the same principle to how we manage people. In most instances employees are promised bonuses at the end of the year. This has very little impact on performance because the consequence is in the future and very uncertain as the company can decide not to pay the bonus for other reasons. Therefore employees will not change their behavior if the consequences are in the future and uncertain. Managers unfortunately manage people as if they are managing people who do not know what to do or people who do not want to do what they are told. Only managers with the right emotional intelligence will be able to get the best out of their subordinates.

It is also critical for managers to appreciate that naturally, individuals are different and they have certain preferences in the way they behave. Having a deeper understanding of your subordinate’s personality profile can help in reducing conflict and increasing effective communication with the subordinate. It also helps the manager to have their own personality profiled so that they can have a better understanding of their own personality.

Due to the low emotional intelligence in our managers we now find work situations that are tension filled, toxic and have no regard for customers. Managers generally have a mistaken belief that being tough and rough when handling employees indicates that they are good managers. This is a terrible mistake as most of the poor performing managers are normally those perceived to be the tough guys who are failing to get the best out of their people.

Organisations will benefit significantly from having managers with the right level of emotional intelligence. Organisations should make it mandatory for managers to go through a one week intensive people management course which includes pre-workshop assessment of Emotional Intelligence and their Personality Profiling.

Zimbabwe Employee Engagement Trends Report 2013

Introduction

The road to recovery from the recession that characterised the Zimbabwean economy between 2001 and 2009 is proving to be long, winding and bumpy.

Driven by recovery in domestic demand and government consumption, the World Bank estimates that real gross domestic product (GDP) grew by 20.1% in 2009-2011i. This growth was fueled by strong growth in mining (107%), agriculture (35%) and services (51%). Growth in the manufacturing sector (22%) was less aggressive.

In 2012 and 2013, economic growth slowed down. The growth figures for 2012 and 2013 were estimated at 4.4%iii and 3.4%iv respectively.

On July 31, 2013 Zimbabwe held harmonized elections. President Robert Mugabe won the election with 61.09% of the total votes cast, and his party Zanu PF won two thirds majority, with 160 seats in the House of Assembly out of 210 seats. Government proceeded to launch the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) as the economic blueprint for the period October 2013 – December 2018.

Undoubtedly government faces formidable challenges as it attempts to resuscitate the economy.

In a recent statement, the Zimbabwe Congress of Trade Unions (ZCTU) claimed that as many as 300 employees are losing their jobs every week.

The Zimbabwe Independent recently quoted a July 2013 National Social Security Authority (NSSA) Harare Regional Employer Closures and Registrations Report for the period July 2011 to July 2013 that showed that 711 companies in Harare closed down, rendering 8 336 individuals jobless.

The African Development Bank through its country profile on Zimbabwe argues “The economy continues to experience structural challenges emanating from the limited sources and high cost of capital; uncertainties arising from policy inconsistencies, especially with respect to economic empowerment and indigenisation regulations; dilapidated infrastructure and obsolete technologies.” It continues “The poor performance of domestic revenue inflows against the background of rising recurrent expenditures will continue to constrain the fiscal space. With the continued use of the multi-currency regime, monetary policy is not expected to change significantly.”

Whilst employees would have hoped for quicker results – increase in income, increase in employment opportunities and more secure jobs, the reality appears to be very been far from this.

Interestingly however, defying this gloomy outlook, employee engagement went on to increase on a year on year basis.

Executive Summary

The Industrial Psychology Consultants (Pvt) Ltd 2013 Employee Engagement Trends Report is the result of surveying 4,115 Zimbabwean employees about their levels of Engagement and work experiences.

The following report explores five key areas:

1. Benchmarking Employee Engagement



Fewer employees are engaged today (60.59%) than in 2011 (64.26%), when employee engagement peaked. Interestingly, the 2011 peak coincided with the peak recovery in the economy.

Comparatively, Zimbabwe continues to have a significantly higher percentage of Aligned Skeptics when compared to Europe. 38% of Zimbabwe’s workforce are Aligned Skeptics, compared to only 12% of Europe’s workforce. As this report will show, we have consistently observed this trend since 2010.



2. Shifts in Employee Engagement Drivers

a. Zimbabwean employees rate remuneration and rewards slightly higher (1.19%) compared to 2012. Although slightly higher, these extrinsic (functional) motivators that have traditionally been seen to drive work performance have not reached satisfactory levels. Our assessment suggests that low perceptions of remuneration and rewards continue to negatively affect engagement levels.

b. Engagement levels continue to be dampened by poor communication in organisations. Compared to 2012, 0.81% less employees seem to believe that they are informed about matters that affect them or that management keeps them informed about developments in the organisation. Fewer employees also seem to believe that they have opportunity to air their concerns and that communication in their organisations is two way.

c. Employees feel more positive about leadership in their organisations. In particular they feel that their leaders are capable of running their organisations. More employees seem to believe their leaders lead by example as well as adhere to sound corporate governance.



3. Three theories on current trends in Employee Engagement

Industrial Psychology Consultants attributes this increase to a combination of three theories: relativity at play, employee coping mechanisms, and sampling methodology of this survey.

4. Determining if Employee Engagement Measurement is still relevant



In spite of this unexpected upswing, measuring employee engagement will continue to be the most reliable metric of any company’s overall climate and health. Business leaders should begin taking steps now to ensure that this trend will hold in their organisation.

Business leaders should also begin to assess how they can link employee engagement to other key drivers of the business such as labour productivity, customer satisfaction, revenue growth, cost management and profitability.

5. Recommendations for Improving Engagement

Based on this, three recommendations are offered on actions leaders can take to foster Employee Engagement within their organisations.

The Winners

2013 ZIMBABWE BEST EMPLOYERS PRIVATE SECTOR

1. Seed Co Zimbabwe (Pvt) Limited.

2. Propak Hessian (Private) Limited

3. Brands Africa (Pvt) Ltd

4. NicozDiamond Insurance Limited

5. BDO Zimbabwe Chartered Accountants

6. Ecobank


7. Securico Security Services



2013 ZIMBABWE BEST EMPLOYERS NGO SECTOR

1. Catholic Relief Services

2.Transparency International Zimbabwe

3. World Vision Zimbabwe