Why every company needs a code

Successful strategy requires establishing a code—and living by it.  

“You’ve got to stand for something or you’ll fall for anything”

Aaron Tippin

Geoff Wilson

You’re reading this because you like strategy, business, and leadership—or because somehow my not-so-vast marketing efforts fooled you into clicking something that you ultimately will or won’t like. Either way, I owe you a dose of content that is on topic. This one revolves around a simple question that very few companies think through in depth: What is our code?

By code, I mean a system of governance and a definition of what honorable behavior really is. Operating by a code cuts through the crap. It simplifies and distills to essence that which is too easy to complicate.

In building strategic plans, distilling the code is key. It generates the answers to who we are and who we hope to be. It’s necessary. “Market leadership through ethical cost leadership” is a code one can operate by. It establishes the ends, means, and methods.

Do you have a code?

For companies, codes are important for alignment and action. Companies that are unable to articulate codes, or that formulate codes that are at wild odds with personal codes, will struggle to succeed. How do I know? I’ve been in plenty of companies with codes that go something like this: “Grow revenue and grow earnings.” That’s it.

You might call this the “coin-operated code” because, just like a vending machine, you aren’t getting anything unless you put coins in. In reality, a code focused only on outcomes or money is no code at all. Executives who operate with no codes, or corrupt ones, get found out soon enough. A company that operates via a coin-operated code forgets its customers and invites attacks.

So, what’s a more holistic code? How do you know when you have one? I defined it a few paragraphs earlier: A complete code establishes the ends, means, and methods. And it does so in very simple terms.

A code I’ve worked to share in our organization, and that I believe strongly underpins the promise of WGP’s consulting practice, revolves around three things: We listen. We bring something new. We do real work. 

That’s it. That’s the “code of honor” I bandy about to our team, and one that I believe sets the stage for ultimate value.

We listen because we can’t be effective partners to our clients without understanding before being understood. We bring something new because without fresh insights, we are just a temp agency on steroids. We do real work because that’s how fact-based strategy is established (and because the world doesn’t need any more pontificating armchair consultants).

So, what’s your code?

As an aside: All of this is all secondary to and perhaps separate from personal values. Yet your corporate code has to align with personal values of the highest and best among you, or you’ll get the personal values of the lowest and least. And that’s the recipe for a code red.

I’ll just leave that for you to ponder.

What do you think? 

Don’t let butt brushes bite you from behind

The small things that turn people off from doing business with you can cause big damage.

Geoff Wilson

Millions of people shop every day. Thousands of retail executives spend millions of dollars each year trying to pinpoint what makes people lock in and buy their merchandise. They discuss store formats, look and feel, customer flow, sales interactions, and numerous other concepts. And then, some guy comes along with a perspective that attacks high-concept with a decidedly low-concept insight.

That’s what Paco Underhill did in his book Why We Buy. One of my favorite insights from that book concerns the “butt-brush effect.” Simply put, the butt-brush effect is an observation that customers tend to stop shopping when they’re touched from behind. So, when racks in stores are packed too closely together, people negotiating the cramped quarters are more likely to brush their rear ends against one another. And when that happens, they tend to get uncomfortable and stop shopping.

Butt brushes are easy to describe in a retail environment. They are, literally, butt brushes. But butt brushes exist in all business contexts. They are small portions of customer or vendor experience (yes, I’ll include vendors) that make executing your strategy just that much harder. They make people uncomfortable.

In your business, butt brushes are unintended impacts. They come from people who aren’t setting the strategy. They sometimes even occur from people just “doing their jobs.” Those are the ones that are the most insidious.

What are some examples?

  • “Aggressive attorney” butt brush: You know him. He’s the guy who makes closing the transaction a complete slog. He’s the one who focuses on the minute details to the exclusion of the relationship. He makes it hard for others to like your company.
  • “Credit Nazi” butt brush: Similar to the aggressive attorney, the contentious credit guy is a sales-prevention army of one.
  • “Purchasing” butt brush: You’ve gotten to know the senior managers of your prospective vendor. They like you. You like them. The deal is as good as done. Then, you have to pass them off to the purchasing department. Things get… brushy.

There are also the many tiny butt brushes you offer up to your prospective customers and strategic partners every day. A fantastic example is the “My smart phone is more important than you” butt brush. Yeah, you get it.

You’ve invested untold time and money into customer insights and strategy. You’ve established a path and process to get there. So why let butt brushes ruin it all? Seemingly small discomforts (sometimes driven by small mindsets) turn people off in a big way.

Keep an eye out for butt brushes before they bite you from behind.

What do you think?

Mongolian Beef and the Moment of Truth

We all face moments of truth.  What do yours reveal about you?

 

This past Friday evening–at the end of what was a fantastic week–I decided to drop in on a local Chinese food restaurant for takeout before heading home to my family.

It was a regular drop in on a business I hadn’t been to in probably four months.  I placed a “robust” order to feed our family of 6, and then walked outside the restaurant to talk on the phone while my order was prepared.

When I walked back in, one earphone in my ear and the other dangling so that I could pick up my two sackfuls of Chinese goodness, the cook and proprietor of the restaurant pointed to the sacks and said “I made you a Mongolian Beef to make up for the one I missed last time.”

I was astounded.

“Last time,” as I noted above, had to have been four months ago.  I vaguely remembered, only after the cook pointed it out, that I had indeed arrived home one Mongolian Beef short of my full order on that trip.  I remember calling briefly and letting the shop know (without much fanfare…literally just “hey, wanted you to know we were short on this one…no big deal.”).

And the cook remembered better than me.

He, no doubt, had a moment of truth where his customer walked in, didn’t say a word about a past service miss, placed a big order, and then waited.  The moment of truth was that moment when he faced the choice of either to address a prior miss that hadn’t been remembered by the customer, or to just go with the flow and ignore it–banking on the customer’s ignorance.

On moments of truth

There’s a reality in customer service–all parts of business and life, really.  It’s that we all face moments of truth.  Moments of truth are moments that force us to reveal–at the very least to ourselves–who we really are.

It may be that moment when you ought to deliver hard feedback to a client but decide not to because it’s too, well, hard.

It may be that moment when you return that overpayment to your customer like it’s a hot potato because you are not about keeping your customers’ money.

And, yes, it may be that moment when you remember a customer issue from four months ago and go the extra mile to mitigate it when the chance, finally, arises again.

We all have moments of truth in our lives. Moments of truth are moments of truth because we quite often have discretion about which way we go.

We can choose.

We can hide from the truth and reveal that we are, in fact, cowardly (like in my feedback example above).  Or, we can face the music and see where it takes us.

The question we all should consider is this:  When faced with my moment of truth, what will it reveal about me?

We should all hope for the revelation of strength of character in such moments.

What do you think?

The Best Praise For a Pro

What it means to be “fire and forget.”

 

“Fire and forget…”

It’s a term used to describe smart weapons that can lead themselves to a designated target.

It’s also quite possibly the best praise a professional can receive. As in: “He’s fire and forget, put him on the problem and tell him to call you when it’s solved.”

The phrase is worthy of a blog post here because, put simply, it’s something that we focus on developing in our work with our clients.  While the vast majority of our work is focused on working closely with our clients, there are times when data just needs to be found, or interviews conducted, or analysis completed in order to solve a problem.

And that’s where being or having access to “fire and forget” resources can make the difference between professional life and professional death.  Being a resource of this kind means a few things.

It means you are competent.

It means you are reliable.

It means you are trusted.

It means you are credible.

It means you are resourceful.

It means you are responsible with resources.

And, so if fire and forget is the ultimate in professional attainment, why are so many professionals lacking this level of trust?

My answer?  A mis-designation.  We think some people are professionals when in reality they are simply role players.  They have a job, not a profession.  There is a difference.  There are plenty of ways to define what a professional is, but I know of only one good way:

The professional gets the job done the right way. 

But, becoming a professional is a process. Sure, there are some intrinsic aspects of a worker that are hard to coach–how curious they are, how resilient they are, whether they act with purpose or watch the clock–you probably know them.  But so much of being a pro has to be learned.  Show up.  Get results.  Do real work.  All these are marks of a great pro.  But, so is sensitivity.  So is practical judgment.  So is empathy.

You want to gain the highest professional compliment?  You want to be “fire and forget?” Better yet, do you want to retain or hire true professionals?  Start looking at their track record on these attributes.  Start looking for people who act with purpose and judgment, even early in their careers.

Oh, and when your professionals aren’t professionals?  Make the move.

I’d love to know your thoughts on this one…

When Reality Doesn’t Matter

The sad hilarity of the “say anything” executive and consultant…

 

I can’t write much on this one other than to say it represents the types of behaviors that give high concept consultants and high level executives bad reputations.

It’s worth your time to watch for a bit (and hopefully to get a chuckle).

 

 

You ever have to work with someone who took a “just do it, it’s easy” attitude toward things that are literally impossible?

Me too.  And, I hope I never do it again.

 

Leaders Must Say Thank You

Put simply…”Thank You” is a key part of leadership.

I’ll keep this one short.  The turkey is in the oven and all the sides are either comfortably prepared or queued appropriately.

In the midst of a holiday focused on giving thanks, I thought it apt to put in a plug for “thanks” as an element of leadership we mustn’t overlook. And, as is always appropriate when it comes to simple notions and time constraints (yes, I am actually cooking at the moment), I’m going to borrow a quote.

About 20 years ago, I stumbled upon the book Leadership Is An Art by former Herman Miller CEO Max De Pree.  Mr. De Pree’s book has been one of the foundational influences on my personal leadership vision; and I love to see it on the shelves of people I know.

But, I digress.  In the midst of the book’s preamble is a simple quote that lays out what I believe to be one of the most elegant notions of leadership in an ocean of attempts at elegant notions of leadership.  It goes like this:

“The first responsibility of a leader is to define reality. The last is to say thank you. In between the two, the leader must become a servant and a debtor. That sums up the progress of an artful leader.”

I have digested this quote from many different perspectives over the years in trying to progress myself and the people I lead into a state of “artful” leadership.  It covers strategy, servanthood, obligation, and–perhaps most importantly–progress.  We never arrive.  It’s safe to say that I love this quote.

For the purpose of this post, it’s the bookends of leadership that De Pree defines that really stand out.

At the front is defining reality.  Without it, one is not a leader.  The leader’s definition of reality–where we are, where we are going, and the pressures and risks we face–is fundamental to leadership.  It establishes “we.”  It provides the touchstone for all other activity; and it’s the alpha and omega for any strategy.

It also lets those being led know that the leader is, in fact, a leader…not simply someone executing on somebody else’s vision and doing a job for a paycheck.  Just doing a job for a paycheck is the realm of high functioning managers and mercenaries. Mercenary cultures grow when leaders have no vision. Mercenary culture is incompatible with the notion of leadership as defined by Max De Pree simply because he starts it with vision–reality defined.

At the back–the last responsibility of a leader–is to say thank you.  Leadership…true leadership…is not finished until those being led have been thanked for their contribution to the effort that “we” have put forth.  Sure, thanks can come in the form of money, but I have to insist that a thank you cannot be simply monetary. Cash is necessary, but insufficient.

Thank you.  It’s integral to leadership.

As we celebrate this holiday…this season that focuses nominally on thanks, let’s focus on what it means to incorporate thanks into our leadership philosophy.

Happy Thanksgiving to my U.S. readers.  And, for all of us…let’s take De Pree’s definition of leadership to heart.

Good Governance Depends on Whom You Ask…

Want good governance?  Ask around.

“The greatest trick the devil ever pulled was to convince the world he didn’t exist.”

Roger “Verbal” Kint – The Usual Suspects

Do you sit in a position of power?  Do you, also, sit in a position of isolation?

Oddly, the two things can coalesce into one if you fail to remain vigilant.  One of the hallmarks of bad governance everywhere–from Teapot Dome to Barings Bank to Enron to, I’m sure, Volkswagen–is the existence of good people in powerful positions who have allowed themselves to become isolated from the facts on the ground.

Consider the case of Volkswagen…

VW has now lost upwards of 40% of its market capitalization since the emergence of the news that engineers and managers in the company conspired to cheat on international emissions standards in the company’s small diesel engines.  I won’t belabor the point, but I can assure you that there are powerful people in high places in the company…its board and senior management (possibly up to and including its now-resigned CEO) who would not have consented to such egregious white collar crime had they known the existence of it.

I won’t speak for all the executives or board members at VW, because I simply don’t know them; but I will speak for the consistently present minority (or even majority) in such situations who were elevated to high places and subsequently isolated from the reality of ethical and legal behavior on the ground.  They allowed themselves to be convinced that things were being done right.

But what’s the deal? 

It happens in most every situation of moral, ethical, or legal lapse within corporations: Good people at the board or senior management level–usually due to great performance of the organization they are called to lead or govern–stop asking questions.  They take the word of people whom they “have no reason not to trust.”

They, essentially, fall asleep at the switch.  And, to give some examples, the fallout looks rough.  Namely:

Unethical behavior surreptitiously drives performance (such as in the Teapot Dome bribery scandal of the early 20th century).

Low control of rogue elements destroys entire institutions (such as in the Barings Bank collapse of the 1990s).

Entire financial fictions are erected by complicit management and advisors (such as in the Enron case of the early 2000s).

And, in some cases, good companies are systematically disabled and functionally dismantled by management with incentives very different from boards and shareholders (which occurs in far too many companies worldwide).

None of the bad actors in the named scandals above gave outward reason to doubt their trustworthiness in the times leading up to the scandals; and in some cases they would have recoiled or lashed out with righteous indignation at their higher ups if they were, in fact, questioned.

That’s the refuge of ne’er do wells everywhere–righteous indignation.

Watch for it.

But what to do?

In every case, people in positions of fiduciary and ethical responsibility have the obligation to ask.  But, they have the obligation to ask those who actually can convey reality, not those who are charged with packaging reality for consumption by boards and senior management.

In his book Why Zebras Don’t Get Ulcers, Stanford University professor and author Robert Sapolsky coined a proverb that is quite powerful for people in positions of assurance everywhere… It goes like this:

“If you want to know if the elephant at the zoo has a stomachache, don’t ask the veterinarian, ask the cage cleaner.”

You get it? If you really want to know if something just isn’t right, don’t ask the so-called experts…they rarely have the task of cleaning up the mess.  Ask the people who witness and clean up messes.  Ask people lower down the ladder, whose credibility might not naturally be so high, but whose incentives might also not lead them to unnecessary spin or outright dishonesty.

In other words, ask around.  If you sit on a board or in senior management and find your interactions with rank and file people to be overly stage-managed, then ask some more.

You know why?

Because–with apologies to Verbal Kint–the greatest trick that bad actors pull is convincing the world that they aren’t bad actors.

Reality depends on whom you ask. So, ask around.

I welcome your questions and comments.

In Defense of Honesty

Drama is worthless except for those who profit from it.  Find your best, graceful, honest self…and bring it.

I’ll just start with this:  I tend toward an idealistic world view.  I believe in establishing and testing core principles and doing my best to live by them. I launched a firm based on that.  I’m not perfect, and I’ve been around the block enough to know that a principled world view is one that can be dangerous to one’s career and to one’s reputation–even when principles are otherwise “right.”

It’s a little acknowledged fact that, as a western culture, we applaud and crowd around feats of physical courage.  We love people who “put their life on the line” and laud them accordingly.   People who are physically courageous might face questions of why they take such risks, but such risks are appreciated.  We saw this recently with a few U.S. citizens who stopped what might have been a much worse shooting incident on a train in France.  We laud them, rightfully so.

On the other hand… Moral courage is actually a very lonely thing.  The courage to stand on principle in the face of really rotten circumstances, to give up power, prestige, or even (gag!) money to have the ability to sleep well at night is…to put it bluntly…tough.  Why?  Well, it usually has to do with a matter of reflection.  When we are morally courageous, we cause other people to reflect on their relative lack of courage.  It’s easy for an individual to look at a selfless feat of physical courage and say “oh, my, I don’t think I could ever do that” and still maintain a solid self image. Change the circumstances to one of moral courage, and people are suddenly confronted with their own foibles more directly.

For the average person, It might be hard to put one’s self in harm’s way to save someone from being shot or run over by a car, but it’s (conceptually) actually pretty easy to walk away from an unethical leader.  However, throw in a bunch of other people following the same unethical leader, good money, and good old inertia, and the person who opts out of such a circumstance has to foster a lot more courage (again, conceptually) than a person who saves the damsel in distress.

Wait, do you mean that it’s harder to be morally courageous than to be physically courageous?

Yes, of course.  If such weren’t the case, we would see a lot more instances of whistle blowers and conscientious objectors vs. physical heroes.  We would see fewer instances of closed ranks, cloistered leaders, and silent exits of key executives. Instead, whistle blowers and conscientious objectors know that they can be vilified, ostracized, and ultimately damaged by the very act of calling out issues.

On a more micro level–one that I hope affects us all vs. the more macro issues faced by whistle blowers–if we saw more flexing of moral courage, we would see a lot less drama in the average group endeavor.

Why?

Because the core of moral courage is honesty.  It’s bringing your best, honest self to bear on any situation.

Drama typically ensues in organizations when there is ambiguity, passivity, apathy, and manipulation.  Drama, true to the metaphor, comes as much from what is happening behind the scenes as on stage.  And, believe you me, there are predatory minds that relish the ability to foster drama and discord.  They thrive on it.

So, my point:  If we are to flex our moral courage, we have to start practicing some level of honesty.  Honesty with ourselves is where it has to start.  Have we examined ourselves, our lives, our professional approaches?  The average human mind (and ego) really doesn’t do that well.  And, make no mistake, we are, on average…average.

Honesty with others is the next step.  Have we offered up, in careful but clear terms, an honest appraisal of situations and the mindsets around us, or do we let drama stir?  Have we examined our relationships in this manner?  Have we been willing to say “no” to those who foster discord? Keep in mind that it is possible to be honest without being brutal.  Most corporate jerks I know are “honest” on some superficial level, but they are also absolutely brutal at it.

Honesty requires grace, and honesty without grace is brutality.

Some might wonder why “honesty” rises to the top of a blog that is ostensibly about leadership and strategy and organizations and transformation.  I’ll just put it this way:

If you can’t be honest with yourself and those around you, you can’t be an effective strategist.  Drama–and the dishonesty underpinning it–obfuscates.  It creates ambiguity.  It creates friction.  It creates frustration.

I’ll say it again:  I’m an idealist. That means, for instance, that I don’t mind being called naive while acting in defense of honesty.  I have found that defending an honest point of view helps the predators and pretenders to reveal themselves for who they are much faster than if I play along.  I sleep well at night.

Bring your best honest self to the situation, and see what happens.  You might not like the reaction, but I guarantee you will like the outcome.

 

Always Do It Again Like the First Time…

Is the secret to life and professionalism finding the ability to lead, love, and perform with the fervor you once had?

Remember the first time you had to really perform in a meeting? Or the first time you had to give a subordinate a performance review? Or maybe the first time you were responsible for the sales call?

How about the first time you said “I love you” to a significant other and meant it?

Maybe you remember the first time you tried really hard to master a sport, or an art, or a language. You found a link between passion and performance. You went through pain or anguish or nervous uncertainty to get there.

Maybe these things don’t resonate for you, but still, there’s a first time for everything. And for those things we very much want to do well on, we do the work, we deliver with feeling. We, in short, find a way. The first time is hard won.

Unfortunately, for a lot of the things I just listed, there’s also a one hundredth time. For some performances, there is a ten thousandth time.

The Professional’s Call

This weekend, I had the opportunity to witness the performance of a virtuoso jazz musician in an intimate setting. I was able to see and hear the music flow from someplace within him that I couldn’t see. As is sometimes the case when we witness amazing talent in action, I struggled to understand how perfect the performance seemed, even when almost all of it was improvised (it was, after all, jazz).

During an intermission, the musician–acting as our host–told those of us in the audience an interesting anecdote about the great performer Burt Bacharach.

Bacharach is known for his performance of the song Alfie, a somber, meaningful song about life. Here it is:

Through some mental math, our host related that Bacharach, over his career, has likely performed Alfie more than 10,000 times. That’s 10,000 instances of a performer’s finding the same passion and emotion in an activity that he had the very first time. Our host explained that being able to perform every time with the passion of the first is, in a lot of ways, a secret to life.

A Lesson for Life and Work

The anecdote is a profound illustration of what it means to be a professional. It’s also, I think, a profound illustration of what it means to maintain curiosity, wonder, and passion within a world of banality and repetition.

Think about it. Can you imagine being able to experience the joy and wonder you felt during your first kiss during the goodnight kiss on your 30th anniversary? Can you imagine being able to say “I love you” today to your spouse with the same trepidation and sense of the future you had the first time?

What a rush!

A friend and mentor of mine once related to me that she knew she was doing well as a professional when she no longer felt nervous walking into meetings with senior executives; the act of leading meetings had become a rote exercise. I respect this point of view. I’ve lived through the maturation that she mentioned, and I’ve delivered the same insight to others. But while the maturity of professionalism is important, so is the passion.

I’ve witnessed countless professionals “going through the motions.”  They do endless meetings with no soul and no passion for vision or values. They work to their incentives like coin-operated machines. They look elsewhere for their passion and in the meantime demolish the hopes of their audiences. Except that their audiences are the people in their organizations or, in the worst cases, their potential business partners and customers.

We professionals, like the performers we really all are, must remember to go back to the passion (if not the nerves) of the first time if we are to deliver our own virtuosic performance on the hundredth or the thousandth time. If we seek to move others, we have to break out of the professional monotony that comes to us and deliver with feeling, and this matters whether you are a jazz pianist or a financial analyst.

Find an insight. Find something new in every repetition. Rediscover the first time you did it. Find the passion that comes with the first time—the hard-won first time—every time, and I do think that you’ll find at least one secret to life.

The Pornographication of Motivation and Values

Distilling motivation to dollars, penalties, or positive thinking may leave something out…

A day or so ago, I came across a post via my LinkedIn feed.  It has now disappeared, probably to protect someone’s sense of career risk.  But…

The post, entitled “Stop Living Your Life Like a Motivational Poster,”  is about how the whole motivational poster and quote industry is dangerous because it leaves out essence and authenticity while peddling positivity and motivation.  The author states:

I truly believe that to keep ignoring every emotion that does not fall into the positive category is at best unhealthy , and at worse can lead to feelings of inadequacy- that your [sic] somehow strange, not good enough, not strong and self controlled enough to ‘think yourself positive’

The post touched off a minor candle fire of discussion on LinkedIn.  And, there’s something hiding in that post for those of us working to perfect (if “perfect” is a possibility) strategic leadership.

Namely, that something is about how the insidious drive to simplify, distill, and extract the essence of motivation can leave out critical context to the detriment of individuals and organizations.

That context might just be how challenging the circumstances were for a leader whose wisdom gets distilled into a motivational witticism.   Mohandas Gandhi’s “Be the change you wish to see in the world” quote is used incessantly by folks who probably don’t understand the massive hardship Gandhi went through to have the credibility to deliver it.

Perhaps more importantly, however, the context can be the values and constructive intent that get left to the side of a motivational incentive.

But, why the link to pornography? 

So, I roped you in with a reference to porn, and now I need to make the link.  To do so, I’ll use a quotation (irony, yes, I know) from Pope John Paul II. He said:

There is no dignity when the human dimension is eliminated from the person. In short, the problem with pornography is not that it shows too much of the person, but that it shows far too little.

Did you get that?  The problem isn’t that pornography reveals too much of the context, but that it reveals too little. Removing the context removes the dignity.

That’s what you and I as strategic thinkers and leaders need to reflect on when it comes to motivating others.  Are we distilling motivational text, structures, and systems down to quotes, numbers, and dollar amounts that remove the context (and the dignity)?

In short, are we making fundamental values a transactional thing that can be priced away?

Three areas where this may matter to you and me:

While the habit of distilling away contextual values in pursuit of efficiency and impact is something to watch out for in all parts of life, I’ll reflect on three areas here that matter.

1.  Motivating your organization:

There’s a very large market for organizational motivation diagnostics and techniques.

This market will only grow as Millennials become more and more disconnected from the values and realities of the older generations who (in many cases) manage them.  If men and women are from Mars and Venus, Millenials and Baby Boomers are from different galaxies.

Practitioners refer to this area of organizational practice as “engagement,” but reality is that this is all about motivation toward the goals of the organization as a whole. Like the article I linked in the opening of this post, “engagement” techniques and programs all too often fall into the trap of trying to distill a multi-faceted, highly personalized issue down to a few pithy drivers.

This is a noble act, to be sure; because engagement does matter.  Still, these programs turn on the distiller and invariably come up with programs that get at only one or two of the fundamental things that people think about when they think about engagement.

In your organization, one person is most engaged when thinking about building the value of the organization he works within.

The next thinks primarily about impact on the customer.

Another thinks it’s all about himself.

The next thinks its about doing good for society.

Still another thinks its about her working team.

Research shows that people split evenly on these 5 factors when selecting the one that motivates them.

When you look to engage your organization, or even your immediate team; you have to factor in this diversity of drivers.  Distilling down to a focus on team building activities or greater community involvement or quotes about whether it’s “good for the customer” will only touch the tip of the iceberg.

2.  Financial incentive structures 

There has been a decades long move toward greater tying of daily activity to monetary incentives.

This trend has slowed somewhat in recent years as so-called “pay for performance” or “penalty for performance” has time and again created unintended consequences and malicious gaming from the shop floor to the c-suite.

When we distill mission critical and values-driven activities like safety or quality monitoring down to financial incentives for attainment of certain standards, we introduce a very challenging set of defining moments for our people.

By defining moments, I mean a choice between two highly conflicting fundamental values.  Do I report that safety incident and take the hit on my bonus, or do I conceal it and get paid?  Do I report the customer complaint when my customer satisfaction rating is at the threshold of my bonus payment, or do I just forget I heard it?

These are fundamental contextual issues that get lost in the distillation of motivation to a single- or even multi-point-formula.

A great and commonly cited study that gets at this particular point involves a set of day care centers in Israel.  The study found that when there were no financial penalties (and therefore no economic incentives) for leaving children beyond the day care centers’ 4pm pickup time, parents rarely were significantly late.

However, once a financial penalty for late pickup was introduced, parents were late much more frequently.

The study shows the types of unintended consequences that can happen when a financial incentive is put in that allows people to replace a moral or ethical one.

People see the price of their ethical lapses, and can judge accordingly.

If I’m a parent operating under a social contract that says 4pm is the pickup time and leaving my child any later means a teacher has to work overtime because of my lateness, I take the moral impact into account.

If the social contract is changed to a financial one, then the price I pay for my lateness is clearly outlined and transactional. The day care center makes it easy for me to forget about ethics and just pay the fine.

This is all kind of cute when it comes to a day care center.  But, imagine what happens when you place a price on values driven behavior in a safety program, or customer service, or (shudder) healthcare programs.

Price is a clear motivator.  I’m a huge fan of price–except for when the cost of inaction is priceless.

3.  The continuing emergence of aggressive short-termism

The place where distillation of context is perhaps most dangerous is in the boardroom and c-suite.  The emergence of aggressive short-termism as a de facto course of management comes directly from the pornographication of motivation.

Boards, being limited in what they can measure when it comes to the health of an organization (though less limited than most boards realize), resort to distilled measures of current profitability and cash flow.  These measures, while absolutely critical to performance, are devoid of the context necessary for the long term stewardship of capital resources.

They are indicators of current vitality (just as a patient’s pulse rate is); but they leave out important contextual risk factors (like whether the patient is a smoker, obese or anorexic, and/or exercising regularly).

Once again, price matters.  When a senior executive can look at the price of his or her action in the short term and see the financial payoff, there becomes a transactional aspect of stewardship that boards must be vigilant about.  This is particularly key when vesting structures align such that executives’ short term actions are monetized at a much greater rate than actions that affect the long term.

So what? 

I co-opted the pseudo-term “Pornographication” because, first, I think it’s a pretty amusing term; and second, because I think it says something about what can happen to an activity (whether that be sex, love, or motivation) when essential contexts are removed and only a most basic “basis of arousal” is left for consumption.

As strategic leaders, board members, and managers; we must be careful to think through the contextual consequences of distilled incentives.  The value of an enterprise depends on considered choices about some things (like safety programs or long term investment) that can only by measured by conjecture.

Watch out for the oversimplification of complex motivational issues.

Context matters.