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The Leadership Challenge: Holacracy (like Zappos) – 5 Tips!

August 22, 2016 By Sam Palazzolo, Managing Director

The Point: What would your organization be like if your employees lead themselves? Would it be better, or would it be worse? Tony Hsieh of Zappos after hearing Brian Robertson (a software company CEO and therefore people expert) bet that his organization would be better… Considerably better! In the short term, Holacracy at Zappos appears to be a recipe for chaos, calamity, and turnover in its ranks (In other words, the opposite of success). So the question remains “Will the success-ship be righted at Zappos in the long-term?” In this post we’ll take a look at the leadership challenge of Holacracy along with 5 tips… Enjoy!

Zappos Holacracy

The Zappos Culture can be described as an obsessive focus on creating a culture that embraces the idiosyncrasies of each individual should leave few wondering why they’re continually a stalwart on Fortune’s annual list of the “100 Best Companies to Work For.” However, many are now wondering how to implement their human resources ranking system simply known as “Holacracy” (a system that has replaced hierarchies and bosses with “self-management” of organizational teams and individuals therein).

While securing “100 Best” attainment would be viewed as “Great” or even “Good” for most organizations, Zappos is looking to identify how they’ve slid from 48 to 58 (Digging deep into the results yields two particular questions showing dismal results: Do employees think management has “a clear view of where the organization is going and how to get there”? And do managers “avoid playing favorites”?) Seems like a small problem (“Who cares?” or “Pigs get fat, hogs get slaughtered” should come to mind!)

Teal replaces Orange (Which replaced black, right?)

Zappos can, and should be looked at as an enterprise that embraces risk-taking. Having taken the “tour” last year (You can too if you plan a visit: https://www.zapposinsights.com/tours), I can honestly say that the place is ripe with transformation. Memories of stuffed animals, ball pits, and individualization were everywhere… Think of it as if Willy Wonka transitioned from making candy to selling shoes!

5 Tips to Holacracy Success?

After viewing the Holacracy in play at Zappos, I offer the following 5 Tips to Holacracy Success:

Tip #5 – Embrace Change

While huddling up and having meetings is nice, identifying where change is at (Along with Where it came from? What you are doing about it? Where you want to go?) is crucial to short/long-term success. While you can’t guarantee successful outcomes to each/every change episode, properly diagnosing and setting a course of action can guarantee shorter episodes of change failure.

Tip #4 – Someone Must Lead

While it’s a nice idea to have zero leaders in an organization (as well as establishing high expectations), expecting peers to hold each other accountable can/will lead to moments from “The Lord of the Flies” to be played-out. If leaders do what others won’t, someone must step-up and lead.

Tip #3 – Recognize Shortcomings and Correct

If you don’t measure, you can’t manage effectively. Whether you take on a task such as Holacracy or not, managing by measuring is a must. “Measure what?” you might be asking… The answer is “Yes” (Measure everything important to driving towards your organizational mission/vision/values).

Tip #2 – Turnover Kills People Businesses (You Do Have People, Right?)

Zappos reports 29% employee turnover during their Holacracy efforts. Now whether that is high/higher than normal, one thing is shared and that is the majority of that number was made up for the first-time by leaders looking to lead (only this time somewhere other than Zappos). Do the right thing when facing turnover and conduct exit-interviews (Interview those exiting the organization to identify why they are departing, and modify if necessary).

Tip #1 – Recognize Performance (and Individuals)

There is no “I” in team, but there is in “Win”… While recognizing performance that drives towards aforementioned mission/vision/values for your organization should be considered a given, is there really no-need to recognize individual team member contribution to said importance?

SUMMARY

In this post, we’ve examined the leadership challenge of Zappos Holacracy, along with 5 tips to Holacracy Success. I loved my time at Zappos, and I think that if you go on the tour or work with the organization you will too! The culture is one that I only wish existed when I started my career (In case you’re wondering, I could see myself spending considerable time in the ball pit!) The challenges of the future of your business could very well be in adopting similar Holacracy moments (However, I would imagine first-to-market leaders such as Zappos will establish a solid benchmark to measure from).

Sam Palazzolo

The Leadership Challenge: The Prudential Problem – 3 Tips!

August 18, 2016 By Sam Palazzolo, Managing Director

The Point: Whether you run a large, or a small organization you will sooner or later be faced with an ownership dilemma as follows: Should I allow those that participate with me in the venture to gain an interest in the venture? In this post we’ll explore employee ownership and whether or not it’s right to disburse ownership to those that join you in your leadership journey along with three tips… Enjoy!

Employee Stock Ownership Programs (ESOP)

Meet Bob… Bob has successfully run his organization from initial start-up phase through ideation/creation and ultimately lift-off (All successful I might add!) The organization is flooded with his blood/sweat/tears along that path. Bob recognized something early, that being he could not get to “there” (The “there” he wanted to be according to his business plan) without recruiting others to assist him. So he recruited successfully as part of that business plan and achieved what most would consider success. However, there came a time when Bob was faced with an employee dilemma… Should he give up a “piece of the rock” of ownership a la the Prudential advertising slogans of old and provide a piece of the ownership puzzle to those that accompanied him on said journey?

Because They Are With You, Do They Deserve Ownership?

Employee Stock Ownership Programs typically provide ownership interest in the form of equity to employees (Typically with no upfront costs associated, as a form of employees remuneration for work performed). While this is a gracious, and often golden-parachute for employee ownership interest in luau of cash compensation, it typically isn’t predetermined by most entrepreneurs.

The Prudential Problem: Three Tips!

The following leadership challenge discusses the topic of providing ownership interest for associates and provides consideration topics to insure that this is the best course forward:

The Prudential Problem #3 – Are They Equal Owners?

The first problem to identify is whether or not employees act as equal owners to that of original leadership within the organization. While there is considerable risk involved in starting an organization (ideation alone that results in creative innovation could spell the different between success/failure), stakeholders typically come to an organization that has well established paths forward towards profit.

But what if your organization doesn’t have such well established paths forward towards profit? What if there is a need for differentiation of thought and pivots therein based on consumer preference? Are there new ideas brought to the forefront which could establish ownership mentality?

The Prudential Problem #2 – Should They Receive Ownership Interest?

If new ideas are brought successfully to the forefront of organization direction to accomplish organizational mission/vision, at what level should ownership be distributed?

Given that there is such ownership mentality present is it fair to those employees that provide such direction a certain percentage? What will happen to those employees that do not provide such direction, yet are afforded the opportunity to act/carry-out such processes?

The Prudential Problem #1 – What if They Don’t Deserve Ownership Interest?

If the ideation and carry-out of such processes leads you to believe that ownership interest is deserved, then certainly a percentage of ownership could be made a case for distribution. Identifying who will receive what percentage and in what format (Current equity valuation versus future) could be justified.

My perspective is that those that provide ownership mentality and carry-out such direction may deserve equity distributions. Identifying therein the levels required to maintain not only current, but future, interest is often dictated by the equity levels provided.

SUMMARY

In this post we’ve analyzed the leadership challenge of the Prudential Problem of giving up a piece of ownership equity in order to further the organizational mission, along with three tips to provide insight into the dilemma at hand. If you’re like Bob (and sooner or later you will be), the dilemma could/will be indicative of future strategic business moves you will face. Make the right moves, and the organization may continue on its success course. Make the wrong moves, and the organization could fade away into oblivion (or somewhere in-between).

Sam Palazzolo

The Leadership Challenge: Innovator or A$$hole – 5 Tips!

August 2, 2016 By Sam Palazzolo, Managing Director

The Point: In a constant drive for success and achievement, most leaders find themselves challenged with how best to spur on the creativity of their team to produce innovative results. However, 9/10 (but who’s counting?) this drive for innovation is misconstrued for a$$hole (Yes, that’s the word you’re thinking of – ahole!) behavior. In this post, we’ll examine the leader’s drive for innovation and provide five tips to avoid the ahole innovation trap… Enjoy!

In Steve Jobs We Trust

Meet Susan (name changed to provide anonymity), a hard-driving mid-level manager for a Fortune 100 organization. Susan recently graduated from a top-tier Executive MBA program and is on career path fire in her organization (Even though it is an extremely BIG pond as far as companies go). Having made the half-way point for the year, she finds herself in the luxurious position of being ahead, well ahead, of her individual and teams goals. However, there is one small problem with Susan… She’s an A$$hole according to her team members.

In reviewing results for a recent Behavioral 360 Degree Assessment (One where not only Susan, but her stakeholders – Superiors, Peers, and Subordinates – provided feedback on her behavior/performance/leadership qualities) it was not surprising to see Susan ranking her self higher (at times significantly higher) than that of the stakeholders who she invited to provide feedback. The results were brushed-off by Susan with a simple shrug and accompanying statement of “They [stakeholders] just don’t understand my ‘Steve Jobs’ persona replication… I’m ahead of goal, right?”

The Drive to Innovate

The fine line between leadership innovation and aholery is an easy one to cross, criss-cross, and/or stay on one side as a leader. “Those that innovate survive!” is Susan’s motto, but is it all there is to the road to successful innovation attainment?

I would argue that establishing course direction and accompanying correction upon identification of off-course moments is crucial. However, technique for original goal development, implementation and adaptation is crucial to your stakeholders identifying you as either innovator or ahole. If as a leader you think your stakeholders are misreading the situation, then do something about their perception because their perception is the reality!

5 Tips to Avoid the A$$hole Innovation Trap!

The following are five tips to avoid what I have come to term the “Ahole Innovation Trap” as a leader:

Tip #5 – Goals 1.0

Establish goals with your superiors for what high performance results should be. These should include not only desired results, but metrics that will be captured along the way so as to verify goal attainment (Think of the all too popular ‘dashboard’ and you get the picture).

Tip #4 – Goals 2.0

Review goals established in Goals 1.0 with your team, and with your team’s input identify how these goals should/will be accomplished.

Tip #3 – Delegate Responsibilities

If in Goals 2.0 you’ve identified the desired course forward towards goal attainment, delegate responsibilities to your team members. Establish who will precisely do what by when. IMPORTANT: Review with the team what has just been developed a the conclusion (This might take more than one meeting!) NOTE: You as a leader are not void of responsibility here… Insure that you provide goals for yourself as well in addition to Tip #2 and Tip #1 as follows!

Tip #2 – Accountability

Establish accountability to achieve delegation responsibilities at frequent time intervals with the team. This way, not only can you police activities, but fellow team members can help keep each other on-time/on-target as well.

Tip #1 – Monitor/Measure/Modify

Lastly, as the leader it’s important that you monitor what was established through non-judgmental measurement intervals. If you are on-time/on-target identify how you can accelerate through the timeline. If you are off-time/off-target identify where you came off-track and how you can quickly get back on-track.

SUMMARY

In this post we’ve taken a look at the leadership challenge of innovation or ahole, along with five tips for success in being known as an innovator. Regardless of your level of leadership, the skill of innovation can distinguish you from your peers. However, the ability to conduct goal attainment with accompanying ahole recognition can be career limiting.

Sam Palazzolo

PS – Susan turned out just fine… Through a series of executive coaching sessions with stakeholder feedback she quickly regained “Innovator” title!

The Leadership Challenge: Title Dilution – 3 Tips!

August 1, 2016 By Sam Palazzolo, Managing Director

The Point: If you’re an achiever in your career, your title not only represents what you do BUT your accomplishments as well. So what happens if you’re at an organization that elects to water-down or dilute titles so that everyone appears to be harmonious/at the same level operating as an entire team? In this post we’ll examine the leadership challenge of title dilution and what you can do to elevate yourself from mediocrity as you escalate the org chart on your career path… Enjoy!

The Elevator to the Top!

Every once in a while I find myself in a situation that bears repeating. Case in point this past week in an elevator riding to the top floor to spend some time with a client. Enter onto the elevator two young women also traveling to the top floor. Their conversation could be captured as follows:

Woman #1

How are things going for you over at Company XYZ?

Woman #2

They’re going fine, but I’m so concerned about our policy of title dilution. While I’ve never been concerned for me, or my abilities to achieve, the fact that we dilute company titles makes me feel like I’m not being recognized for my achievements. I mean, I know I could go over to Company ABC and make more money, but I’m not certain they’d even give me an interview because it looks like I do the work of an entry-level employee. I’m concerned…

We’re All One Team, Right?

Title Dilution is the concept that all members of a team are provided with equivalent titles. Leaders and Team Leaders not only sit/work together with their teams, but they all have the same title to boot! So what if you work for an organization that chooses to similarly title dilute? How will you be recognized? What will you do to not only stand apart from the team crowd, but remain a valued member of the team?

While you may not have to worry about title dilution as you ride the career elevator in your current organization, I see a trend of more and more organizations wanting to equate equals as part of the team as opposed to different (or same as but different).

3 Tips for Title Dilution

So what is the career savvy achiever to do so as to avoid title dilution? I provide the following Three Tips to overcome title dilution regardless of where you are at on your career path journey:

Tip #3 – To Thine Own Self Be True

Shakespeare spoke of a clever conversation between a father and son regarding escalating the org chart (or as good as career advice could be provided back in his day). It all starts with knowing who you are and what’s important to you… Here’s the passage from Hamlet (Act 1, scene 3, 78–82):

Polonius:

This above all: to thine own self be true,

And it must follow, as the night the day,

Thou canst not then be false to any man.

Farewell, my blessing season this in thee!

Laertes:

Most humbly do I take my leave, my lord.

Tip #2 – Fish Determination

Are you a BIG fish in a little pond, or a little fish in a BIG pond (or does pond size matter?) I meet with a lot of leaders that either struggle or excel depending on the situation that they find themselves. Know this much about yourself: You probably have greater comfort in one setting versus another. With that in mind, identify what your best setting is and look to maximize your impact.

Tip #1 – GOALS

If you don’t have goals, you’re either (A) dreaming or (B) letting someone else determine your fate/destiny/outcome. If titles are important to you (either for ego purposes, marketing your brand, or the perception of greater income – either real or imagined) then an organization that dilutes the titles of achievers may or may not be the right place for you.

SUMMARY

In this passage we’ve taken a look at the leadership challenge of title dilution and presented three tips. Important to note that while careers aren’t built/realized overnight, they can come unwound in a relatively short time period. Identifying who you are (and what’s important to you), where you are at, and a plan for success should assist you in overcoming dilution moments in your career regardless of whether you are just starting your journey, midway, or looking for a way to “ride off into the sunset” as you leave your legacy for others to marvel at.

Sam Palazzolo

The Leadership Challenge: Pollyannaish

May 9, 2016 By Sam Palazzolo, Managing Director

The Point: You want to have a positive outlook… I want to have a positive outlook… I think we ALL want to have a positive outlook! But is that positive outlook actually doing more harm than good for you? In this post, we’ll take a look at The Leadership Challenge Pollyannaish to determine if it’s actually working for the good, or if it’s acting as evil in your leadership development… Enjoy!

Blinded by Optimism

I was introduced to the “Pity Parade” concept about a decade ago. This concept goes something like “it’s easier to be down in the dumps, as opposed to upbeat and optimistic.” If you ever notice, or took the time to count just how many people are down as opposed to up, you’d quickly surmise that the ratio is about 10:1 (Down:Up). That’s a pretty staggering quantity… So why are there so many people choosing (It is a choice after all to determine your attitude) to be down?

The reason so many people prefer to be down, or negative, is that it is simply far easier. If it takes less muscles in the human face to smile as opposed to frown (43 to frown while only 17 to smile – Check it out for yourself at http://science.howstuffworks.com/life/inside-the-mind/emotions/muscles-smile.htm), why put in the extra effort to be negative. The choice (again, it’s a choice!) is that while the initial effort/energy might be greater, the long-run follow-up effort/energy is, well, effortless. You will expend far fewer calories as a leader being negative. Being positive strains your leadership muscles and causes you in the initial moments to exert additional effort/energy as well as in the long-run. So this is why the “Pity Parade” has so many members in it… and it’s a long parade!

Menander vs. Marcus

Let’s go back in time to see if leadership “Pollyannaish” tendencies are dictated by human history… All the way back to around 150 AD. Picture a world very different from the one today (What, no iPhones? Tragedy!) A world ruled by the Roman Empire, stretching for nearly 75% of the known world. A world run by Roman Emperors and in this time period the great Marcus Aurelius. The backbone of this empire some could argue came from the philosophical lessons handed down from the Greeks. One such Greek was none other than Menander. Now Menander was a sort of Steven Spielberg meets Saturday Night Live of his time, and is the best known representative of Athenian New Comedy (He penned 108 comedies and took the prize at the Lenaia Festival 8 times – something akin to the Oscars I would imagine).

Menander was known for his quick wit, and captured many a stinging quote in his work. One such capture consisted of the quote “So surrounded by good things was he…” which allowed the audience member to fill in the blank regarding exactly what it was that our hero in the work had regarding choices to be made. It was in this Pollyannaish moment that we can realize that when everything is going right, perhaps there is some major wrong taking place! To the rescue comes our Emperor (Marcus Aurelius)! He quickly quips back regarding this line “So surrounded by good things was he… That he didn’t have a place to take a sh!t!” (Of course this is a relative translation and loose interpretation, but you get the point). This must have caused some sort of Pity Parade to form… Do you think there were those whispering ‘memento mori’ (remember you are mortal) to one another in the parade? Me thinketh not…

Pollyannaish for Good or Evil?

So the leadership challenge of being Pollyannaish is staring you right in the face… What are you going to do? How are you going to behave? Week in and week out I see leaders struggling to maintain composure and control of their operations. At the heart of this struggle is their attitude… The attitude that they have 100% control over! They choose whether or not to be positive or negative, and it’s often in these choice-trenches that they win or lose the business war for the day, the week, or their careers.

One of my favorite lines or questions in conducting a conversation, be it a consulting engagement, a coaching conversation, or just a mere acquaintance conversation to align around a topic is to ask “Are you up for an observation?” Surprisingly, I’ve never had anyone say “No” to my request! Perhaps because it is a level-reset opportunity, or the truth is staring both of us in the face, but my intentions are to share something for the good. My experience has shared with me that because just so many of us dwell in the negative that a good moment shared just might establish the trajectory of the day, week or career.

SUMMARY

In this post we’ve taken a look at the leadership challenge Pollyannaish. Remember, being negative is easy. Strive for the hard leadership moment of being positive, while not forgetting to simultaneously be cautiously optimistic and you will set a tone/pace in the much better positive direction for your organization, your stakeholders, and yourself!

Sam Palazzolo

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