Leadership lessons from ‘Great One’

‘Passing the puck’ increases engagement and performance

Leadership development: In September, the Strategic Capability Network hosted an event with Robert Potvin, founder of CDC Coaching, and Les Dakens, a principal with Pineridge Consulting, on raising emotional intelligence to improve leadership and overall corporate performance. For more information about SCNetwork, visit www.scnetwork.ca.

Leadership lessons from ‘Great One’

Leadership more than just giving orders

SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies.

Leadership lessons from ‘Great One’

In 13 seasons with the National Hockey League, Eric Lindros, whose career was plagued with injuries, amassed 865 points, of which 57 per cent were assists. His favourite position on the ice was in front of the opposing team’s net so he could have the best chance at scoring a goal. He never won a Stanley Cup championship.

In contrast, during 20 seasons with the NHL, Wayne Gretzky amassed 2,857 points, of which 69 per cent were assists. His favourite position on the ice was behind the opposing team’s net so he could get the puck to the player in the best position to score. He won four Stanley Cup championships and was inducted into the Hockey Hall of Fame in 1999.

Lindros and Gretzky are perfect examples of two different leadership styles, according to Les Dakens, former senior vice-president of HR at CN Rail and a principal with Pineridge Consulting in Toronto.

Lindros exemplifies a leadership style that gets results but doesn’t engage the team, so it’s not good in the long term, said Dakens at a Strategic Capability Network event in Toronto last month. On the other hand, Gretzky exemplifies a leadership style that gets results by helping others score.

Dakens used this analogy to help get line managers at CN Rail on board with a cultural shift in 2001. While the company had dramatically improved since privatization in 1995, the new CEO felt there was still room for improvement and that would come from shifting from a “kick-butt-and-take-names” leadership style to a more collaborative and engaging one, said Dakens.

But it was hard to get managers and supervisors to change a leadership style that had made the company so successful, he said. CN had to let go of one high-profile leader who wouldn’t change his ways — which showed all employees senior management was serious — and the company also gave leaders who adopted the new engaging leadership style more recognition and greater opportunities for advancement.

“The message to supervisors was, ‘You better start using your employees because you can only get so far on your own,’” he said. “If we can get people engaged, they’ll contribute more, there will be better discretionary performance and that’s going to take our game to the next level.”

In the end, the shift paid off. In 1995, CN Rail had an operating ratio (an industry standard measurement where a lower score is more desirable) of 89 compared to an industry average of 80. In 2001, after six years of a leadership strategy that included reducing headcount by 10,000 employees, cutting expenses and “kicking butt,” the ratio dropped to 72, said Dakens.

After shifting to the engaging leadership culture, the ratio dropped even further to 62 in 2007 and the value of CN stock doubled from 2001.

“Regardless of what you’re trying to do with your culture, if it’s not going to generate better performance, you’ve got a tough sell,” he said.

Part of the new leadership style was learning how to manage employee behaviours that contributed to success. Before the shift, supervisors expended about 80 per cent of their efforts on the antecedents of behaviour — such as telling employees to perform a certain way.

But it’s the consequences of behaviour — feedback such as thanking an employee for doing a particular task or recognizing his effort — that have the greatest impact on the likelihood of a behaviour being successful and repeated.

To focus more on consequences, CN introduced a performance appraisal process where employees would be ranked at one of three levels: entry level, skilled or outstanding railroader. After the scorecard was introduced, employees emailed Dakens to tell him that during their career with the company — some as many as 30 years — they had never had a supervisor tell them they had done a good job before.

“You can treat everyone the same and get mediocrity or you can treat everyone differently and let the stars come out,” said Dakens.

Moving to a more engaging leadership style doesn’t mean managers let poor performance slide, he said. An engaging leader will still confront an employee but instead of using commands and fear of termination to get her to change, the engaging leader will work with the employee to figure out why the performance is substandard.

“It’s not scorched earth,” he said. And, once the performance improves, instead of ignoring the employee, the engaging leader will recognize that contribution, said Dakens.

Organizations are fond of proclaiming, “People are our most important asset,” but very rarely behave as if this is the case, said Robert Potvin, founder of executive coaching firm CDC Coaching, who worked with Dakens at CN during the cultural shift.

This is because boards often see and promote leaders who are good at managing “up” — managing their boss — and these people often aren’t good at managing their subordinates, said Potvin at the same SCNetwork event.

“They tend to get stuff done by pushing and by intimidating,” he said. These leaders are bright but lacking in emotional intelligence — the ability to understand and manage their own emotions and those of the people around them, he said.

A better way to lead people is to figure out what motivates them to do the job and never assume it’s the same for every employee, said Potvin.

Coaching can help leaders develop emotional intelligence and better engage employees for better performance, he said. But the leaders have to have organizational support, be motivated to change and already be competent in the technical aspects of the job.

A coach asks people the right questions so they come to their own conclusions, he said. It’s about helping leaders understand organizational rules, seeing themselves as others see them and better understanding the people around them and what motivates them.

“You have to understand what people really need,” said Potvin. “Changing your mindset about where the other person is coming from is pretty important.”

Leadership more than just giving orders

SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies.

Challenge and support both necessary for change

Leadership in action

By Dave Crisp

One thing truly stood out from the SCNetwork presentation that provides a great example of what is most important in leadership development — the stark contrast between the limits to change Bob Potvin sees as possible from coaching and the vast change Les Dakens saw among front-line supervisors’ leadership styles at CN Rail as a result of the senior executive team’s strategies. Neither approach is entirely new and both are often seen, but put together they have powerful implications.

Potvin is one of the most experienced coaches in the world. At the seminar, he reported all sorts of circumstances where it doesn’t make sense to even attempt to coach: If the boss and organization don’t fully support the individual or have given up, if he is in the wrong job or doesn’t have the technical expertise, if he has any destabilizing problems (such as mental, drugs or alcohol), if he hasn’t any room to change (the job situation limits alternative behaviour) or if the individual isn’t motivated to change (by fear, desire to learn or get promoted).

But Potvin left one situation out. Coaching is meant to improve an individual’s ability to engage, motivate and deal well with others by getting better, concrete, measurable results. To have impact, coaching must have results — through better people skills — as a foremost objective, so there has to be an urgent need for better results in the organization.

Dakens praised Potvin’s coaching at CN and illustrated major changes in the way many people behaved, by becoming far more people-oriented. But he made it clear these changes occurred in the context of an absolute requirement both for wrenching change in their culture and vastly improving results.

These took CN from the worst operating numbers to the best and then further — driving a 600-per-cent increase in share price and then taking that to 1,300 per cent. It’s a great Canadian success story much like GE, Southwest Airlines or Wal-Mart, but is even more impressive since it was driven within a much shorter time frame — 10 years versus 20 to 40. Stage two of that change wouldn’t have happened without the combination of the two elements of cultural improvement and results.

Coaching helps but doesn’t solve much unless the environment is right. As people are thrown into tough, new challenges, they have no choice but to learn — and they do better in an environment where taking reasonable risks and being supported in surviving errors is the norm. Both challenge and support are necessary.

Significantly, neither a tough environment with demanding leaders nor supportive coaching are effective alone. Unfortunately, we often lose sight of this in the constant debate about the value of HR. It isn’t “either/or” but “both/and” that works best with these.

In HR sessions, we often hear about the “touchy feely” side of what works, while we’re subjected to endless criticism back at the office that we aren’t oriented enough to the business realities. Well, the criticism cuts both ways. That’s the message. Both sides of the debate need to learn both are necessary.

Dave Crisp is SCNetwork’s lead commentator on leadership in action. He shows clients how to improve results with better HR management and leadership. He has a wealth of experience, including 14 years leading HR at Hudson Bay Co., where he took the 70,000-employee retailer to “best company to work for” status. For more information, visit www.CrispStrategies.com.

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Escape trap of ‘one mind, many hands’

Organizational effectiveness

By Tom Tavares

Annual reports routinely declare people are an organization’s most important resource. Yet the way most businesses operate belies this sentiment. Internal communication tends to be one-way and sporadic. Feedback on performance is the exception rather than the rule. As a result, an inordinate percentage of employees feel disengaged from their work.

The gap has widened between the demands on organizations and how people are managed. As a result, executive coaching to improve emotional intelligence has grown exponentially over the last two decades. Unfortunately, advice from HR leaders about the need to change a company’s culture often falls on deaf ears.

Occasionally, CEOs have an intuitive sense there is more to management than telling others what to do. When these rare leaders instil a more productive approach to managing people, it has a dramatic impact on performance. Although it seems as if a company has been transformed, there is no magic involved. Employees have a hand in every activity — when their intelligence is harnessed in a more disciplined fashion, it elevates performance across the whole enterprise.

Most business leaders begin their careers as specialists and are promoted on the basis of how well they solve problems. When they move into management, it is natural for them to tell the people reporting to them what to do. With activity levels rising, they are even less inclined to listen to employees. But this “one mind, many hands” approach is a liability.

Although not every company is in crisis, even well-managed firms are struggling with confusion about the direction of the business and are in firefighting mode. It is clear there is a flaw in the current approach to management. Although cultural change is difficult to sell to executives, there is a simpler case for closing this gap.

Only 10 per cent of people in organizations are in management. As change accelerates, issues grow more complex. The minds of the other 90 per cent of employees not in management are needed to keep a backlog of problems from festering and erupting in crises. Feedback is critical if employees are to develop discipline in solving problems. Consistent communication helps them stay aligned as the company moves forward.

There is enormous potential for improvement in the performance of organizations. The first step in escaping the trap of one mind, many hands is for leaders to realize managing the quality of interaction inside their companies is no more optional than managing finance, logistics or marketing.

Tom Tavares is SCNetwork’s lead commentator on organizational effectiveness and a senior organizational psychologist. In addition to managing in large corporations, consulting in varied industries and coaching executives, he has written extensively about the relationship between business performance, behaviour and change. He can be reached at [email protected]. He is also author of The Mind Field: What’s Missing in Running Our Organizations, published by Carswell. For ordering information, visit www.hrreporter.com/books.

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Just EQ not enough

Strategic capability

by Karen Gorsline

There is no doubt feedback, stretch assignments, mentoring and coaching are of great value. However, these alone will not significantly improve leadership and overall corporate performance.

HR does not pay enough attention to supporting the development of skills and talent in other areas critical to business success such as service, cost control, asset utilization and safety. People skills are useful in all aspects of business, are harder to train and are less likely to get out-of-date. Leaders and teams need these soft skills.

But it’s easier to provide feedback, coaching and mentoring around physical tasks. A discussion of, “what I do” or “how I do” is less threatening than “who I am” and “how I relate to others.” People do not like getting or giving feedback, yet they rarely hesitate to get help with a technical glitch. A focus on building technical expertise using feedback, coaching and mentoring can promote technical competency while building an acceptance that these are part of business.

A focus on technical competency does not preclude fostering teamwork and a team environment. In fact, teams with a clear mandate and specific objectives often work through their differences in a focused way.

When companies have performance issues, it’s often because they have lost sight of the basics that make the business successful. They lose sight of their competitive place in the market or their edge on the basics of service, cost control and asset utilization. The need to pay attention to specific improvements in basic business areas is beyond the scope of emotional intelligence (EQ).

When sound business practices are in place and a business has found its niche in the market, EQ and leadership come into play to leverage the capability and help a business adapt to change.

To motivate employees, leaders must project a clear vision of direction and elicit confidence in their understanding of the business. Leaders must be able to listen and learn as well as speak and motivate. Too often, EQ coaching is limited to the equivalent of sales training — understand the needs and objectives and meet them.

The best-case scenario is an individual who becomes a better observer of human behaviour and develops better communication skills. The worst-case is an individual who identifies what an audience wants to hear and feeds it back to them.

Training and stretch assignments related to EQ need to keep a focus on performance with and through others. Furthermore, a focus on EQ needs to be integrated with building capability in other substantive success factors for the business.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, focused on facilitation and tailored HR initiatives. She has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at [email protected].

Next executive series

Would you like to attend one of the upcoming Breakfast Series in Toronto? Here’s a look at the next few topics:

October: Managing in the downturn — four imperatives to drive employee innovation and performance, featuring Dion Love, research director at the Corporate Leadership Council — Oct. 27.

December: Igniting the third factor — practical and inspiring insights on how to help people reach their full potential, featuring Peter Jensen, founder of Performance Coaching — Dec. 14.

Visit www.scnetwork.ca for more information.

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