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Are humans more than “assets?”

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After reading my last column about how Wall Street values strong leadership, a colleague who coaches Fortune 500 CEOs told me he wasn’t fond of the phrase “monetizing human assets.” This language, he told me, suggests a view of human beings that is precisely the opposite of what he is working to promote. Was I aware of this?

I was and am, so let me round out the picture. Humans are wonderfully complex miracles of creation, and this is true even when our behaviors get distorted by organizational cultures outside of us and personality patterns within us. Even as we serve organizations, it is crucial that organizations serve us. Any language that suggests we are objects to be manipulated should be used cautiously if at all.

In retrospect, by quoting a professor using the phrase “monetizing human assets”–and not offering my own caveat or disclaimer–I was not practicing sufficient caution.

What I was trying to do is offer a provocative perspective to my readers. Isn’t it wildly surprising that Wall Street adjusts its valuation of companies based upon the perceived quality of those companies’ leadership? I think so. And the implications are enormous. This is why my colleague who expressed such distaste for the language also said he would be spending more time with his CEO clients physically and emotionally preparing for visits to Wall Street–perhaps even joining them during these visits to provide coaching in the “in between” moments.

What is the financial value of strong leadership?

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Wall Street is monetizing human assets. Our question is: why aren’t you helping them?

—Bruce Avolio, management professor, to a group of HR executives

The idea that Wall Street values leadership is not new. For more than a decade, research has shown the importance in firms’ stock prices of intangibles like brand, reputation and leadership. But until I heard a talk by Bruce Avolio and Susan Dunn at a recent event on strategic HR, I hadn’t fully realized how much attention equity analysts on the Street pay to leadership.

Avolio, a management professor at the University of Washington, and Dunn, a partner at Mercer Consulting, conducted a fascinating study. They interviewed dozens of equity analysts, the folks who study public companies to determine their overall financial worth, about what factors influence their assessments and what processes they use to make these assessments. What they learned is that these analysts – on both the buy and sell side – don’t just closely study companies’ top leaders, but actually use their (often gut level) take on the quality of this leadership as quantifiable adjustment factors in their valuation of firms. When they said this, I could see a lot of jaws (beside my own) dropping in the room.

How many companies’ heads of investor relations are aware of this? How many people running HR organizations?

And, if you were a really smart company, wouldn’t you be getting your SVP of HR, CFO ,and head of investor relations into a room together to talk about how to strengthen the company’s senior leadership and make this visible to Wall Street?

The implications are potentially enormous. In fact, I’ll be writing more about this in upcoming posts.

My Assessment, Your Assessment [April 2012]

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I’d like to introduce you to one of my favorite games. It’s one with a few simple rules and many winners. The best time to play this game is when you find yourself in a conversation with people who see things differently from you. It’s particularly useful when you feel triggered by these differences.

The game is called “My Assessment, Your Assessment.” It goes like this:

Rules

  • Name the conversation. Just as it’s useful on a tennis court to know whether you are rallying or playing a match, it’s useful in conversation to know it’s nature. Are you here purely to argue or to understand each other’s perspectives? Assuming it’s the latter, kick things off by saying, “I’d like to have a conversation about___. First I’d like to hear your assessment and what’s behind it. Then I’d like to tell you mine and how I came to it. Sound good?”
  • Listen for other people’s assessments. When they’re talking, think to yourself, “This is their assessment. Hmmm…I wonder what is behind it.” Note how different this is from interpreting others’ words as a “truth” with which you then must agree or disagree. The repeated act of doing this actually helps us differentiate from others, which is a very fine move toward mutual respect.
  • Hear the signal through the noise. Only a small percentage of people are truly gifted at describing and grounding their assessments crisply and without defensiveness. The rest of us stumble a bit. There is a lot of noise. Listen for the signal, i.e. the assessment. Assume the best in others by interpreting even the most blatant acts of bloviation as assessments worth learning more about.
  • Acknowledge and request clarification about others’ assessments. “I hear your assessment is that_____. I imagine you’ve put a lot of thinking behind this. Could you help me understand it better?” The idea here is to invite others’ to ground their assessments. This serves two purposes: (1) You learn what is behind their thinking and (2) They often learn what is behind their thinking.
  • Describe your perspective as my assessment or my take or my side of the story. “Thanks for explaining that to me. Now I’d like to give you my take and how I came to it.” Walk them through your reasoning. Even if it seems obvious to you (and it usually does!) it may be surprising, even revelatory, to others.
  • When in doubt, feel your feet on the ground and take two deep breaths. This is a good rule for all games.

[Read more…] about My Assessment, Your Assessment [April 2012]

We’ll get through this together [March 2012]

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My favorite slogan for much of the 2000s was We’re in this together. In difficult times–after 9/11, during major life transitions, and amidst family tragedy–I used it to remind myself that I was not alone and that others were looking out for me. I offered this phrase to others as encouragement to create networks of support for the challenging personal changes they were making. Or to remind them that nobody achieves success, happiness, or life by themselves.

We’re in this together is a phrase whose power derives not from its accuracy (because it’s not a factual assertion that can be proven true or false) but from its ability to shift our mood and orientation toward life. When we say these words, we become less resigned and resentful and more open to taking positive action.

Try it yourself now: Make sure your feet are flat on the ground. Sit upright. Lower your shoulders if they’re creeping up to your ears. Take three deep breaths, preferably from the belly. Now repeat the phrase We’re in this together three times. [Read more…] about We’ll get through this together [March 2012]

Real Time Feedback for Busy Leaders [February 2012]

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Warning: this issue contains ideas that may be hazardous to your leadership blind spots.

According to leadership research, 70 percent of what we learn comes from on-the-job experience. People who elevate their leadership capacity do so by taking on challenging assignments that teach them the lessons they need to learn to guide their organizations into the future. And they learn–really learn–from those experiences.

How an individual best learns depends on many factors, but one practice that works well across the board is receiving specific, requested, ongoing and real-time feedback from a rich variety of competent observers. Such feedback allows leaders to see things they cannot see on their own, expand their perspective, gauge their progress in better leveraging their strengths and improving on their “Achilles Heel” weakness, and enroll others as allies. Let’s break these words down: [Read more…] about Real Time Feedback for Busy Leaders [February 2012]

How To Idiot Proof Excellence [January 2012]

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It’s now been thirty years since Peters and Waterman published In Search of Excellence. As Art Kleiner, Editor of strategy + business, has pointed out, this book brought into the mainstream the notion that building a successful company requires more than simply managing the numbers. Since then, hundreds of books and articles have examined the topic of excellence in organizations and individuals. This month, I present my modest contribution to that conversation: how do we idiot-proof excellence?

Idiot-proofing means designing something so that even a person of low intelligence would use it properly. In my experience, there are few bona fide idiots in the world. In fact, if you subscribe to Howard Gardner’s theory of multiple intelligences, everyone is smart at something. Thus, calling anyone “stupid” or an “idiot” is, well, stupid.

Yet I would also assert that there is an idiot within each of us. To be specific, the magnificent human brain contains a part that acts more like a reptile than a homo sapiens. It responds to external events by fighting, fleeing, or freezing. This “survival brain” is very effective at protecting us from genuine harm, yet it also gets activated when no true physical harm is present. A variety of wonderfully mischievous behaviors result. [Read more…] about How To Idiot Proof Excellence [January 2012]

Three Stories of Practicing Leadership [November 2011]

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In the September issue I made the case that leadership excellence grows through deliberate practice. In this issue I’d like to ground that assessment with several examples.

But first, a quick refresher on the attributes of deliberate practice. You will recall that it (a) is designed specifically to improve performance, (b) can be repeated at high volume, (c) involves continuous feedback from a teacher or coach, (d) requires intense concentration, and (e) may not always be fun.

Let me also make a distinction between practices and habits. (Thank you, Dr. D, for the reminder to do this). Practices are conscious. Habits are not. If you tend to signal to others that you agree with them when inside you don’t–and you’re not aware you’re doing this, at least until much later–I would call this a habit. On the other hand, if you are consciously speaking up when you see things differently, even when this feels uncomfortable, I would call this a practice. All of us go through the day with dozens, if not hundreds, of habits that vary in their impact on our leadership. I often ask leaders to observe those habits in order to develop more freedom to respond. It’s part one of rewiring the brain. Then and only then do I ask them to practice something new. With enough repetition, that new practice becomes–yes, you guessed it–a habit. [Read more…] about Three Stories of Practicing Leadership [November 2011]