ACT

In today’s world everyone is always trying to change everyone and everything.  Change has become a part of our everyday lives.  You taught that if someone is wrong you need to change someone, make them better, but is this really the best approach to have?  ACT stands for advanced change theory where there are two main parts: the leader and the followers.  First the leader must change themselves then work on changing their followers to match their vision. There are ten main points the first 6 focus on the leader changing and 7-10 focus on the leader’s relationship with others.

In the world today how often do you see leaders trying to change employees?  I know for me it is has been a common trend in every job I have had, but what is even more common is the leader themself refuses to change.  At my old job, which was not a positive company, required the employees make numerous changes, including cutting their lunch break to 30 minutes, no personal calls, no personal emails, no cell phones, no open-toed shoes, no skirts, and few other rules that seem to have nothing to do with the job.  Yet as the leaders are strictly enforcing this they come strolling in from their 2 hour lunch break on their cell phone wearing flip-flops.  In a situation like how are employees going to be willing to change when they see those around them getting away with what they are told is against the rules?  It makes the trust in the leaders very low, and makes employee morale decrease which we know leads to low work performance and decline in employee attendance.

So what makes change so hard? Some people see change as criticism it is easier to ask others to change and criticize them than it is to actually change yourself and see you too can improve.  When you look at change was a whole it can be difficult but that is why I think the ACT is a good theory because it breaks change down into 10 steps first focusing on the leader and then the relationships the leader has with others.  In order to expect change one must first be willing to change themselves.

Then when you are wanting change you have to ask what you are wanting to change.  The ACT breaks change down by: change a child, change a class, change a unit, change a division, and change a corporation; each situation requires a different relationship the leader must have with the followers.  The bottom line when it comes to changing human behavior is it is not going to happen over night, you must have a good goal of change you are working towards, and you first must change before you will see change in anyone else.

On the flip side of change I have seen it work positively in the company I know work for.  The leaders made some huge changes to our company in the last year and the first thing they say is we don’t expect anything from you we don’t expect from ourselves.  You ask you not to be on your cell phone all the time but we understand sometimes you need to have it, because we do use our cell phones.  The company took a salary decrease due to the economy and the leaders took the same decrease as the employees in the field.  They asked people to be here at 7 instead of 8, well the leaders are here at 6:30.  And because the leaders are showing they can change too it makes my more willing to change and open to change.

Organizational Silence

In the article “Sounds of Silence” there have been studies that show that only 29%  of first level managers felt their organization promoted freedom to express opinions.  Many company’s have the issue of power where a leader makes others felt if they come to them with a problem or an opinion they do not agree with then punishment will be taken.  When there is a lack of open communication it diminishes morale and work performance.  It often puts a battle between what you are actually doing and what you know is right and should be doing. 

In this economy I think we are seeing organizational silence more and more.  The fact that jobs are so hard to come by it forces employees to compromise their values and often times they chose to do something they know isn’t right just because of the fear of losing their if they do whats right.  Leaders are displaying the attitude if you don’t agree with me then you are wrong, so no one wants to challenge their power.

I have actually experienced this firsthand.  I worked at a job where I knew customers were not happy, and it wasnt because I wasnt doing my job, it was because of the product or the customer service others in the company gave them.  Yet the people in leadership positions made it perfectly clear if you came to them with an unhappy customer it was your fault and you better have a good explanation or someone else would be doing your job the next day.  So because of this fear they spread in the office I forced to compromise by morals to save my job.  In the end I ended up leaving because I was not happy with who I was becoming, all because my company didn’t allow personal expression or opinion.

 It has been over a year since I left that company and as I look at the company now I see them falling apart, they are having to lay people off because they are losing customers left and right.  Their turnover rate has almost doubled in the last year.  Yet the management is still too much on a power trip to see the real reasons behind their fall.  If they allow employees to have an opinion then many of these issues could have been resolved before they lost customers.

Treadway Tire

One of the highest expenses a company has is training and turnover costs.  Mainly because these are expenses that do not produce a revenue, they are similar expenses a company must face in order to stay in business.  Treadway Tire’s had a total of 50 foreman positions and within 2007 23 of those had been turned over.  That is almost a 50% turnover rate, how can a company be profitable with expenses like that?  The main things that I saw were the issues for the turnover were the shifts they worked, the low morale and the issues between union and management.

Treadway was open 7 days a week, 24 hours a day and instead of running 3 eight-hour shifts they ran 2 12 hour shifts because it saved them money by reducing headcount.  Yet how to expect to get the most out of your employees when they are working 12 straight hours in a labor job?  Your body physically can only take so much before it starts to wear down, your mind can only focus for so long before it becomes tired or unfocused.  So are you really the most out of your employees at hour 10? hour 11? hour 12?  Is there work performance where it should be?  I don’t think it is, so yes maybe on paper you are saving money on the headcount but I think they work performance would increase if they implemented 3 eight hours shifts which will also save money.

When a company has low employee morale they are going to have high turnover rate, which means increased expenses.  The employees were exhausted from working the long days which makes them more irritable which makes them not like their job, they are stuck somewhere for a large part of the day, eventually they are going to become resentful.  When morale is low work performance also decreases and employee attendance declines.  I know this first hand, when I had a job I was extremely unhappy at I found every excuse to slack off or not come to work because the bottom line was I didn’t care I wasn’t happy their.  If Treadway asked there employees what were the things that made them the most unhappy and worked on those, such as maybe having office lunch, office parties, extra days off, different shifts, then it would implement a win-win situation.  The employee would feel like they were getting something so they would be more likely to give something.

When you have a conflict of power there are going to be many issues.  The management felt like they were being undermined by the union, therefore they had no control over their employees.  Without control how could they produce the numbers that were expected of them?  They were being evaluated on these numbers they were supposed to have yet were not given all the tools they needed to achieve the numbers.

Treadway Tires looked to Ashley Wall, HR, to help solve the turnover problem.  But I think the bigger problem was looking at the issues that caused the turnovers, and it was nessicarily having a college degree.  I think the hours the employees were required to work led to a low morale which was also effected by undefined control of power.  To fix one problem Treadway Tires needed to dig deep down and look at the  core issues.

Men’s Wearhouse

Men’s Warehouse started in 1973 and became public in 1991 and from day one the company focused on people.  They have realized that people are what make a company, what makes a company become profitable.  Men’s Wearhouse started small and has grown to own a huge market share for custom suits.  I believe they are similar to Nordstrom’s in the sense they realize that growth and success comes from within and how you promote out.

Men’s Warehouse spends large amounts of time and effort in training employees, if your employee lacks knowledge that is no one but the company’s fault.  They understand to get the most out of an employees potential you must be equiped them with the right tools.  They have created a “training camp” called Suits University so that employees can “experience the culture.”  Not only do they put a lot of time in training they make training fun, they locate them at fun locations, make them experiences like a party. From experience if I have a smile on my face I am more likely to produce better results and learn more.

Another key point I believe that makes Men’s Warehouse successful is George Zimmer, founder and CEO’s, belief of servant leadership.  In prior reading we have learned how servant leadership is a concept practiced by level 5 leaders.  They promote the idea of a win-win situation, if you win then I win. By promoting this idea is allows the company to have a higher moral and employees to actually like their job.  He believes that success is created by making sure everyone contributes were needed, that individuals should see themselves as equals and if the company needs something make sure it gets down.

I have never personally been in a Men’s Wearhouse yet it obviously has a lot of tactics that make it successful.  The only thing that I think could improve is the fact that employees are number one, I do agree that employees make a company but without any customers no matter how great your employees are you have no revenue.  I think if they shared the great focus they put on making their employees so valued and shifted some of that to their customers that they might be able to capture more of the market share.

In times like today with an economy that is on the decline I think it is important that company look within themselves and ask themselves how they got where they are and then how they can get farther in the future.  I truly believe because of the training and win-win attitude Zimmer has demonstrated in his employees had taken them to the lengths they are today but emphasis on customers and building supplier relationships will only help the company grow stronger.

The Layoff

Nowadays the o”layoff” is something that everyone is familiar with and everyone is worrying about.  With our economy still on a decline everyday you wake up to go to work you are one of the lucky ones. So is you have to do a layoff what is best way?  Do you look out for the employer or the employee?  In the Harvard Business Case Study, “The Layoff” the executive committee for Astrigo Holding came up with numerous ideas such as first in, first out, rank-and-yank, last in, first out, cut a unit, or an overall pay cut.  So which method is the best?

The first in, first out method seems to be a popular choose.  They offer early retirement to those who have been there the longest and offer decent severance package.  The problem with this is you risk the chance of being suit for age discrimination.  The upside to this is someone people who are approaching retirement are already counting the days till they can retire and would be more than happy to take the layoff if they are given their retirement package.

The rank-and-yank method is probably the poorest choice.  It is doing performance evaluations which we have already discovered do not work the greatest and then cutting the people withe lowest scores.  The issue with this method is it turns everyone against each other, brings down morale, and in a sense gives management the room to play “favorites” with reviews.  On paper this idea seems the easier, cut the lowest performing people, but in reality how do you determine the scale to rank everyone on?

The last in, first out method seems to be another common method used in today’s world.  Those who were hired last are the first ones to go, meaning you have to work for your seniority.  The issue with this is that you have new recruits that have fresh ideas and recent education and they are going to be the ones you left go first.  What if there work performance is better than someone who has been there for 20 years and is just waiting for retirement, then you lose good employees.  The upside to this is that you don’t lower morale with those who have been loyal and have seniority in a company.

Another common method is to cut a department and get rid of those who worked in that department.  But once again how do you know what department to cut?   What if cut a department that is doing poor in terms of revenue but has key players?  The downside to this method is that you cut all knowledge of that department, meaning if you ever wanted to bring it back you would have to start from scratch.  The plus to this choice is that everyone from management to everyday customer service people would get a layoff, meaning there was no favoritism over position title.

The last method and the one I like the best is the salary cut across the board.  If you propose a company wide salary cut and then everyone gets to keep their jobs, then the morale stays decent and you have no hard feelings. The downfall is that those who are at the bottom of the salary range are going to feel the cut way more than those who are at the top and are probably the ones who can afford to take a cut.  The plus side is that no one losing their job, you do a little team work and take one for the team but everyone comes out on top with a job.

The most important thing to remember is no matter what method you choose to do it with honor and integrity.  If you do a harsh massive layoff those who are still there are going to fear for their job and eventually start looking else where even if you weren’t going to let them go and in the end your morale will be extremely low.  I believe the best method is to offer the first in, first out, early retirement option to those who would like to take it and then a salary cut across the board.  I hope just that this economy starts to turn fast because its awful to be stressed about finances and a job.

Good Leadership and Covey

Stephen Covey has become a strong starting point in my life when learning about leadership.  I have not only read his book for pleasure reading but have also been required to read it for two different business classes, one in my undergrad and one in my masters.  So there was no doubt in my mind I would enjoy his article, “New Wine, Old Bottles.”  In fact in the first line he states, “you can’t put new wine in old bottles,” which I believe relates to anything and everything in life.

He introduces the idea of servant leadership and describes how he believes it is the best type of leadership.  To be this type of leader you must be willing to risk humility of character and be able to gain core understanding of a new skill.  He advises leaders that it takes 3 steps to become a servant leader: build relationships of trusts,  set up win-win performance agreements and be a source of help.  When you accomplish those 3 things Covery believes you have become a successful servant leader.

Covery talks about an experience with the Oregon Air National Guard and how it was his first encounter with servant leadership, but because his leader empowered him with a win-win situation he was able to walk out with something.  He showed him how he had to be accountable for his own decisions and actions, which represented the difference between “go-fer” diligence and empowerment, making empowerment the more likely way of leading.  By becoming a servant leader Covey believes you will produce long-term results and in turn become on your way to being a level 5 leader.

“Good leadership requires executives to put themselves last,” says everything it needs to say right in its title.  Which follows right behind Covey saying, “good governance depends primarily on leaders who put integrity and the interests of their companies ahead of their self-interests,” or servant leadership is the way to go.  This article focuses on how a good leader knows that means sometimes they must make the biggest sacrifices.

In the article it talks about how a CEO of a company he loved had to step down because of fraud others were committing.  Mr. Leven had made Days Inn his baby, it was his life, but when it came down to it his own integrity in leadership matter more.  He suspected fraudulent activities and when he could not fix them he left the company with no severance pay, just a simple letter states how he felt their was illegal activity going on.  He did not have to do that since he had quit and it didnt affect him anymore but because he believe in win-win situations for those still there, the people committing fraud eventually got convicted.

The same goes for when Mr. Leven announced that the company was not going to be making its yearly forecasts, that was information that did not need to be shared.  Because as result the stock when down, but it did not matter because he cared about being a trusting leader and he felt everyone involved in the company had the right to know what he knew.  Servant leadership shows that sometimes you have to make a hard decisions for yourself; take pay cuts, leave a job, switch positions, but that is what makes you a level leader, knowing that a great leader takes a hit before he focuses his followers to.

Withers and Dowdy

What defines a successful leader?  It is the outcome of an event?  The way followers feel about their leader?  The way society looks back on a leader?  A leader is a hard thing to describe and a successful leader is even harder.  There are good leaders because they have amazing outcomes, there are good leaders who have failed terribly but tried their hardest in a hard hard situation.  Then you have leaders who care about individuals and those you care only about the actual situations at hand; which is exactly what happened to Col Joe Dowdy.

In the Wall Street Journal article “How a Marine Lost His Command in Race to Baghdad,” Col Joe Dowdy ultimately got discharged from the military due to different leadership styles. Col Joe Dowdy’s leader was Major Gen Joe Mattis who represented a lot of characteristics of a leader 3 or 4 leader, someone who feels the need to show their power and make others known they are in charge.  Col Joe Dowdy’s focus was on leading peers based on a personal, individual level, focusing more on the individual and the emotion who them. 

Whereas Major Gen Joe Mattis was strictly focused on the war at hand, he was focused on the end result of the task they were trying to conquer.  Col Joe Dowdy got to the point where in the middle of battle he was being instructed to do one thing by Major Gen Joe Mattis where is moral and values were telling him to do another thing.  In a time of war there are lives at line and there is no time for hesitation.  So what are you do?  Do you follow orders of someone you think is a bad leader or do what you believe inside is the right thing?

Ultimately Col Joe Dowdy was discharge from the service due to the conflict between him and his commander.  I think this result came because Major Gen Joe Mattis was not a level 5 leader because if he was he was have possessed the quality that he wanted others to succeed.  He would set others up for success not failure.  Major Gen Joe Mattis may produce battle wins but when it comes to leadership he will never be a truly successful leader, whereas I believe Col Joe Dowdy showed signs of someone who had the potential to reach level 5.

In Wall Street  Journal article, “‘For Lt. Withers, Act of Mercy Has Unexpected Sequel,” a different type of leadership is described, it is more of leadership imbedded into a friendship. It focuses on the relationship between Lt John Withers and PeeWee.  Lt John Withers was under orders not to home refugees, yet he found out his troops were doing just that, he planned to force them to leave, that was until he saw them.  At that moment is when he started to show signs of a level 5 leader.  He realized sometimes management should be based on emotion not just the situation.

Because of his decision Lt John Withers learned more than he ever thought he would.   He knew he was going against orders, for he himself faced discrimination as well and had leadership telling him if blacks did not obey then they would be dishonorable discharged, again an example of leaders showing the power they had.  Peewee and another refugee Salomon showed Lt John Withers what empathy was, they taught him no matter what you’ve gone through you can still smile.  Lt John Withers said that is something he has kept with him forever, that no matter how ran down people or things got there is still always light.

As time passed and the two separated ways they both went on to create better lives than those they had when they met.  Although PeeWee had lost the light in his eyes and had drifted away from the person he had become.  Many years later when Lt John Withers contacted him he returned the favor of bringing that light back.  Both of these individuals I believe possess he characteristics of level 5 leaders and show us sometimes it takes a life changing event  to bring out that type of leader in someone.

Level 5 Leadership

What makes a company great? What makes a good company become great? Is it the company or the leadership?  Jim Collins talks about how they collected data and did research on thousands of companies and they ended up with 11 companies they felt represented the term from good to great.  Why they  don’t know exactly what made these companies great they noticed one thing they all had in common a level 5 leader.

So what is defined as a level 5 leader? Someone who is willing to do anything to help their company, always puts the company first, plays no blame game yet when things are good gives his peers and luck the credit.  Darwin Smith CEO of Kimberly-Clark is a prime example of someone who came in a position who others felt he was not qualified for yet turned the company around and when asked how he did it he simply stated it was the people the around me, it was luck, I was blessed. 

Most people make it to a level 4, where they lack the humility to take on the burden of any failures and reap all the success the company has.  In turn they set their successors up for failure because they want to see them fail, yet Level 5 set them up for success because they want to be able to see the company succeed long after them.

It has become a debate if level 5 leaders are born or bread, there is still no distinct answer.  The leaders they talked about Darwin Smith, Joe Cullman, and Colman Mockler all had life changing events which people think have led to their great success, they have seen everything almost taken from them they have had the taste of what nothing feels like.

I have had the opportunity to work for someone who I believe is a level 5 leader.  Someone who built a company for a garage and took it turn over 20 million in profit.  Someone who poured their heart and soul into a company and when you ask her how she did it she simply states I had great help from my family, employees and incredible luck.  Never once says because I am amazing. 

Which put me on the side that a level 5 leader is born not bread.  I think in our society unless you have been taught those trusting and selflessness ways from when you were young you can not train yourself to be a level 5 leader.  I really hope that if I get put in a leader position I can possess the qualities of a level 5 leader with the humbleness and drive of a successful leader.

The Dean’s Disease

Arthur Bedeian writes an article on dean’s disease and the power that changes and forms those in control into those with a “disease.”  Dean’s disease is described as when a dean makes it known they are superior, makes it difficult for their faculty to communicate with them, are more concerned with keeping a high public profile then explaining their reasoning behind things.  The dean creates an atmosphere where those around them want to stay in the “inner circle” so therefore they tell the dean things they want to hear, not the reality of what is going, they try to make the dean look superior.  The dean’s disease is solid evidence for the famous saying, “power tends to corrupt, and absolute power corrupts absolutely.”

Bedeian gives three main reasons why dean’s disease is created; deans are able to control faculty because of the control of resources they have, dean’s believe they are special (strategic praise), and get a taste of power that is associated with the control.  If the faculty member does as the dean likes then the dean can reward them in bias ways such as salary increases, assigning them the class schedule they want, promotions, and extra recognition.  If a dean is bias in your favor, do you really think that faculty member is going to speak out against them?  No way.  Dean’s believe in their head they are higher than their faculty, they are smarter and have better skills, obviously or they wouldn’t be the dean.  Thinking this way leads them to act as they higher than others, they are superior, therefore they have no problem belittling others or being bias.  It is often said once power is tasted no one ever wants to taste anything else.  This has proven to be true with dean’s, once they taste the power of the position, they do anything they can to stay in that position, meaning not always giving reason behind decisions or always making the morally correct decisions but the decisions that will keep them in their job.

A true leader, someone who is a successful and positive leader is someone who has respect of those they have power over.  The leader has self-confidence and beliefs in their morals, even if sometimes it is the hard thing to do.  They value and respect those around them as well as their opinions. They understand they are going to make mistakes and there is someone better, or smarter, or more qualified than them but instead of faulting that person they strive to be as wonderful as them.  They understand that a position of power comes with understand weakness, everyone has a weakness, and everyone has a flaw.

Bedeian suggests that safeguards for dean’s disease are establishing values and encouraging individual thought.  The best way to get around dean’s disease is to do your research on a new candidate, look at their background, look at their personality and how they interaction with others, look beneath the cover.  And once you place someone in the position of the dean then you need to focus on your safeguards.  Make sure you enforce the individual to establish professional and personal morals and values, remember the simple rules of right and wrong.  Emphasis that personal thought and opinion is strongly valued, it is not always about what others think, but about what you think, that is why you were put in a position of power.

Sadly dean’s disease is not just fixed on dean’s, I have been at a job where the boss has a case of dean’s disease.  He felt he was superior over everything and instilled this sense of fears into others that they told him things that made him look because they were afraid what would happen if they didn’t.  Being stuck in that position I know look back and see how awful it is, I now know I will never stay in a job like that again because it forced me to compromise my values and at the end of the day that was not something I was okay with.  Dean’s disease can take over faster than you realize, so before you wake up and realized you’re caught in the whirlwind of a mess open you eyes and evaluate your leader or yourself as a leader.

Diamonds in a Data Mine, Loveman and Harrah’s

So when you think of a casino and gambling, what is it that attracts you to a casino?  What makes you go back?  Is it the casino itself or the amenities they have to offer?  In 1998 Satre brought in Loveman as the COO which would also be in charge of the marketing.  Loveman came in with the notion that the amenities were not what built the casino or produced growth instead it was strong customer service which led to high customer loyalty. 

Loveman came in and change the company in a complete 180, fired high executives and came in the with the idea that no one owns their job, the shareholders own the jobs and Harrah’s position was to fill them with the best people they could.  Individuals needed to have a sense of the top, had accomplished something great in their life to have that taste of what the top feels like in order for Loveman to believe they had a future with Harrah’s.

So as a consumer that lives in a large gaming town what keeps me going to casinos?  Honestly it is not the customer services but it is the attractions and what the casinos have to offer.  Yet then again I am not the target market, I am not a gambler, I merely gamble from time to time as an enjoyment.  Now my boyfriend on the other hand loves to gamble, he could gamble all day everyday (which isn’t always a good thing!) He is their target market, so what attracts him to casinos? 

Exactly what Loveman said, the rewards, he would rather have free play then free rooms or free meals.  He has a rewards card and he sees other customers who have the higher level and envy the perks they are getting.  In turn he wants to spend more so he can be to the level those another him are at.  What makes him choice a casino in the first place…the one that treats their customers as value, the one that offers the best rewards.  Does he stay loyal to them?  Most definitely because as long as he is playing there he is ranking higher in the reward system.

By using the data from the 1997 reward program “Total Reward” Harrah’s was able  to gather the “diamonds in the data mine.”  They used the age, gender, machines, money spent to determine that they target customer was not the normal high roller but the middle-aged and senior adults with a limited amount to time, usually “locals” they stopped by on their way home from work.

The thing that I believed Loveman realized that turned Harrah’s high profit was you can data on data but unless you are able to find the diamonds, aka sort the data and get the useful information from the data will never mean anything.  By gathering so much data and then knowing how to read it Loveman was able to implement a reward that rewarded the 26% of the gamblers that turned 82% of the company’s revenue.

So I believe Loveman’s idea of coming in a changing the company to focus on customer service and customer loyalty was a positive move for Harrahs.  Not only were they able to gain a ton of data for the future but they are able to reward those individuals who have already been loyal customers.  I do not necessarily believe the way Loveman came in and change and fired people brought for a high morale.  People are not willing to accept change easily so when you come into a new position and new company I think you need to have a level of acceptance and allow some slack for those who have been loyal employees to embrace the new change.

I think Harrah’s is on the path to continuing growing, especially with the structure of enforcing control groups.  I am a firm believer in control groups because a lot of ideas look good on paper or sound good when spoken but what you need are ideas that actually work, they are going to produce results.  Also I think be enforcing control groups it makes individuals think about the possible threats the idea could have.

Overall I think Loveman did a great job with Harrah’s and I think a company that promotes happy customers and happy employees will always rise to top no matter what the economy brings.