Friday, June 13, 2014

The Myth of Loyalty

There is no such thing as loyalty.

Let us take a moment to ponder that statement and let it sink in.

When I have this conversation with people, as you would expect I get a whole myriad of responses.  Some people think I'm crazy, some look confused, and others just nod sagely.  This topic is not one for light conversation because it goes against centuries, if not millennia of closely held beliefs.

Because every controversial position needs a caveat, let's get a few out of the way.  When we talk about loyalty, we are not confusing it with any of the following:
  • Love
  • Fidelity
  • Fanaticism
  • Fear
In a marriage, two people can stay together out of love but not be loyal to one another.  A person can stay a "fan" of a sports team (that's for you, my Cubs) and spend a lot of money on their products, but that's not loyalty either.  You could safely attribute these actions to obsession, but not loyalty.

Over the years, companies have spent millions, if not billions, of dollars on maintaining and building loyalty.  Internally, firms launch programs designed to establish and enhance the loyalty of their employees.  Externally, the same is done in the name of retaining customers.  If you watch commercials, you will see that there are programs called "Loyalty Rewards" and incentives with names like "Loyalty Cash".

Throughout history we have a multitude of stories about loyalty.  Whether you read about Alexander the Great and his Companions or the Japanese soldiers' dedication to Emperor Hirohito during World War 2, we have many examples of the supposed existence of loyalty.  We can even look to popular fiction to see the popularity of the idea.  Just read "The Three Musketeers" by Alexandre Dumas ("All for One and One for All!") or one of the many fables about King Arthur and The Knights of Round Table. 

Given all of that, I will say it again.  There is no such thing as loyalty.  What we label as "Loyalty" is actually a much more simple, hard-wired aspect of humanity called self interest. There is a whole branch of study devoted to this topic called "Psychological egoism".  Here is a quick excerpt from the description on Wikpedia linked to above:

Psychological egoism is the view that humans are always motivated by self-interest, even in what seem to be acts of altruism. It claims that, when people choose to help others, they do so ultimately because of the personal benefits that they themselves expect to obtain, directly or indirectly, from doing so. 
A specific form of psychological egoism is psychological hedonism, the view that the ultimate motive for all voluntary human action is the desire to experience pleasure or to avoid pain.

So let's cut past all of the psycho-babble and get to the point.  As leaders, our success is intricately tied not only to hiring good people but to retaining and engaging them as well.  The sooner you get past the concept of trying to build loyalty, the sooner you can get to know your people.  Take the time to really understand what motivates them.  Ultimately, learn what actually comprises their individual self interest and target your management strategies to maximize those things that people value the most

Your people might like or even love you, but try not paying them for a month.  Will they stick around?  Odds are highly in favor of them not.  The fact is that your people stay with you (and the company) because they are in a situation that they deem to meet their needs, ie. self-interest. 

It is no secret that the companies which perform the highest on the yearly rankings of "Best Places to Work" already realize this concept.  In these organizations, you will see many of the same perks: flex time, telecommuting, on-site child care, work assignment flexibility, comfortable and convenient campuses, and a focus on education.  Even if you are not in a position to provide all of these benefits, as leaders and executives you assuredly have more power than you think.  For me, personally, the one benefit that I can give consistently is the opportunity for people to get training.  In the IT world, that "perk" has an incredible power to satisfy employees.

When you stop thinking about abstract ideas like loyalty and focus on concrete things such as personal need, you can become a much more effective leader.  It's really simple in the end: Learn what makes each of your people tick and then give that to them.  At least as much as you can.  I guarantee that you will be surprised at the positive results.

Tuesday, June 3, 2014

"The Talent Triangle"--Now on Kindle

For the past several years I have talked occasionally in this blog about the difficulties inherent in making truly great hiring decisions.  Like most of you in leadership positions, I have made (ultimately) poor decisions in the selection of people to fill my organizations.  Some of my more painful selections were made for various reasons:

  • The person went to my alma mater
  • I "liked" the way the person communicated in the interview
  • I could see potential - what could be but isn't yet - and was certain the person would "blossom" under my leadership
  • The candidate was a really great individual contributor and I felt it was time for them to take on more responsbility
  • The person had all the skill sets that I needed but not the motivation.  I believed that I could be the one to motivate the individual to a higher level of importance.
Of course the list goes on, but you get my point. 

Over time I got better at making good and even great hiring selections.  Yet, I never had a process that was scientifically based in a way that would make me confident that I could predictably be successful in my hiring practices.  Predictably I would make great hires and then, at random, someone I thought was a great fit during the interviews turned out to be a really poor employee.  I needed to find a way towards more precision, a way to eliminate or at least greatly reduce the chances of selecting a "dud".

That's when I began to understand that each person has four dimensions that all play a part in determining how and if they can fill a role.  Building on the work of world renowned experts from across the globe, I constructed a model that describes how all of these pieces work together.

In "The Talent Triangle" you will get a complete description of how the model works, with in-depth definitions of each dimension.  You'll learn how to evaluate people in a way that will shed a whole new light on who & what they are and how they operate. 

After reading the book you will be armed with a tool that will allow you to make great hires, time after time after time.  You will still use your intuition, but the model will show you how and when to apply feeling and when to rely on hard science.

You can find "The Talent Triangle" HERE on Amazon Kindle. 

I love feedback so please do take a moment when you've finished to write a quick review on the Amazon site.  No matter what you think, I want to hear it!  Your feedback is what keeps writers at their keyboards so you have my thanks in advance.


Monday, June 2, 2014

Selling Water At A Profit

There is a lot to be said for the value of a good, repeatable process.  As a matter of fact, a lot HAS been said about it if the real and virtual bookshelves of Barnes & Noble and Amazon are any indicator.  But in "real life", what does it actually mean to have a "good and repeatable process"?  How does that translate in dollars and cents for your business?

Before answering directly, let's start with this question.  Suppose you're thirsty: If person A offered you a cup of water for 50 cents and person B offered you a cup with the same amount of water for $3, which would you pick?  The obvious answer is that you would go for the cup that costs 50 cents.  Yet, in practice, numerous statistics show that many of us would opt for the $3 cup.  More on that in just a minute.

It is no secret that in the competitive world of bottled water, very often the highest priced brands (Perrier, Vittel, Voss) are perceived as being the healthiest, or "best" varieties.  Yet at the chemical level, their isn't any discernible difference between those brands and the Walmart bulk variety.  Marketing plays a large part in the success of a bottled water product, but there is more to it than that.

Let us now take a look at the world's best soda (some of you call it "pop").  If you wanted to find the best soda in the world, where would you go?  By the statistics and just pure carbonated taste, most of you, including me, would be heading off to McDonald's.  Yes, this assertion might be debated, but I'm standing on pretty solid ground as evidenced by this fact and especially HERE.

Even though McDonald's and the other companies above are selling water, they do it in such a way as to command a huge premium.  All of these companies offer products that are essentially just water, but at prices that would seem ludicrous without something else in play.  That "something else" is the good (great?) and sustainable business processes that are used to ensure that the seemingly generic products are truly superior, if not unique.

Along these same lines, we couldn't leave this discussion without bringing Starbucks into the mix.  Here is another company that sells flavored water (coffee, tea) at a huge premium.  As I was researching Starbucks for this post, I ran across a very interesting Master's thesis by Lauren Roby (Liberty University, 2011).  If you want to read it, fine, but if not here is the point that she makes and I echo:

Starbucks makes it's money by having business processes that lead to consistent, comprehensive quality control on every beverage it makes.  But going further, Starbucks extends their production process to include the construction of a certain ambiance for the customer.  The "feeling" you get when entering a Starbucks location is that, by being there, you are part of an elite group of people.  From the music, lighting, and furniture you just sense that this place is a cut above others.  

Because the business processes of Starbucks control both what you consume and how/where you do it, psychologically you don't have any qualms about paying $5.50 for a 30 cent drink.

The value of well designed and implemented business process can be immense.  Try asking your grandparents or someone from the Silent Generation if they would be willing to pay more than "four bits" (50 cents to the rest of us) for a cup of coffee.  They will most likely answer, "No", but only because they grew up with very stark ways of obtaining products like water and coffee.  The world doesn't work that way any more.

Done the right way, with the right approach, you truly can sell water for a profit.