In their new book, Transparency: Creating a Culture of Candor, Warren Bennis, Daniel Goleman, and Patricia Biederman, emphasize the importance of creating an open flow of communication in organizations. They urge leaders to seek information from a broad range of sources and share it widely. Indeed, robust and open discussion of issues leads to more effective decision-making.

Yet an insidious roadblock to open, effective communication exchange is a natural and inevitable part of organizational life - conflict.

Think about it – when you are in conflict with others, do you talk more or less with them? If you're like most people the answer is "less." And if you talk less with others, are you more or less likely to solve problems? Of course, the answer again is "less."

How can you keep conflict from diverting the flow of ideas and hampering discussion of differences? From an organizational or team standpoint, the key is talking about how you want to handle conflict before it occurs. Developing norms that encourage open discussion of issues caused by differences can help people keep talking when conflicts emerge. Candor and openness enables them to search for solutions instead of someone else to blame. Such norms need to deal with questions of trust and safety because when people feel that what they say will be used against them later, they will not fully engage. The norms should also encourage the use of constructive communication behaviors that can help lead to problem resolution.

Constructive behaviors include the ability to listen carefully to others with whom you are having conflict. Listening to someone whose view is opposed to yours can be difficult, especially if the conflict has angered you. This is essential, however, if you want to find ways to effectively resolve the conflict. Effective listening encourages the free flow of information and may be a leader's most effective tool to promoting open communication.

When conflict has caused communications to dry up, leaders can use a behavior called reaching out to get discussions moving again. Reaching out involves talking with the others involved in the conflict and encouraging them to try again to resolve their differences. If the leader is personally involved in the conflict, reaching out may including issuing an apology when appropriate or acknowledging at least partial responsibility for the difficulty. When appealing to those in conflict, the leader can clarify the business problems caused by the conflict and encourage further efforts to talk about how to best resolve them.

Effective leaders recognize just how crucial it is to foster open communication in their organizations. More importantly, they take steps to make sure conflict doesn't sabotage the free flow of information so necessary for creativity, good decision-making and implementation.

In today's challenging economic times, I just pinch myself that I'm not working with or for one of America's Big Three automakers. They can't seem to catch a lucky break with their plight, playing out in front of us as a symbol of failed strategy and out of touch management.

Nowhere are the contrasting styles of strategy and management more evident between Japan and the United States than in hybrid car technology. Pop quiz -- what flagship vehicle from anyone of the Big Three comes to mind when you think of the "hybrid" moniker?

Thinking, thinking…

Now the same question for Japanese manufacturers. How quickly did Toyota's Prius come to mind? If you could even find one today on crowded dealer lots, you'd pay a premium for it, despite falling gas prices.

Here's the kicker -- and something all of us can learn from in regard to making a product that's so dialed in and coveted you can charge a premium price for it. You can't cost justify the additional expense of the Prius versus domestic or otherwise in gas savings alone! Instead Toyota created a molten hot product by capturing the very real, but very challenging to define, consumer "green mindset." The mindset that puts a premium on environmental impact of the products consumers buy.

The question for all of us regardless of industry and marketplace is, how do we define the "green mindset" that either exists today or surely will tomorrow in our markets spaces? And then, how do we position our companies and products to capitalize on this ever increasing consumer perception to create our own version of the Toyota Prius?!

Furthermore, it is becoming no longer politically acceptable the world over to be in business for the mere profit of it. The emergence of these two factors has propelled green technology embracers like Toyota to the forefront in their field. By rewarding forward-thinking companies with their patronage, consumers have spoken with their most powerful voice -- their wallets! If you haven't heard them yet, and responded accordingly in your market, there's only one thing that's certain, some other eco-prenuer will!

I come from the camp where luck happens when opportunity meets preparedness. So take a lesson from America's decidedly "unlucky" Big Three and prepare your company now for the emerging green movement that has no limitations on its reach. You just might be rewarded with your own "Prius" product in the process.

We get it. Presidential debates are organized for the specific purpose of showcasing the differences between the candidates. And it's a great idea. Our system is built on the premise that voters decide who gets elected. (OK, we know how the electoral college works… but just bear with us on this.) Having the candidates speak openly in a forum designed to highlight their differences is a great way to enable voters to gather information and make their judgments.

At the same time, aren't you just a little dismayed at some of the antics and behaviors of our candidates? There is no question that John McCain and Barack Obama have conflicting views. Each wants to convince us that his views are better than the other's. The winner becomes arguably the most powerful person on the face of the earth for goodness sake. What won't they do to win?

There are many ways to handle conflicts, even between candidates for office. Essentially, there are two broad categories of conflict: constructive and destructive. Constructive conflict enables an examination of differences and disagreements in ways that focus on exploration, dialogue, and curiosity. Most often, constructive conflict results in new ideas and satisfying solutions. Destructive conflict is characterized by blame and criticism. The result is often frayed emotions, indecision, and diminished commitment to outcomes. With these concepts in mind, here are just a few observations from the town hall style debate of Oct. 7.

Both candidates spoke frequently about trust. Unfortunately, in their zeal to win, the issue of trust was reduced to a game of showing why you can't trust the other guy. It doesn't matter much who said what. "He voted 24 times to raise your taxes and now he says he's going to reduce taxes." "He supported the failed policies of the current administration for the past eight years and now he wants you to believe he's going to change those policies." The blame game only serves to demonstrate that there is little trust between these two obviously powerful men and their respective parties.

At the root of most destructive kinds of conflict lies trust issues. Wouldn't it be amazing for our country if the two candidates could share their differences without criticizing and blaming one another? Is it possible that the two candidates for president could model constructive conflict behavior? Might such behavior actually encourage more trust of our leaders? Open discussion of differences, without blame, provides an opportunity for constructive conflict. That seems like something our country could use these days.

Both candidates also seemed to enjoy pointing out their "fundamental differences." If only they could stay focused on the differences rather than each other! Every time we heard the phrase "fundamental difference," we yearned for a true examination of those differences. Unfortunately, the candidates quickly stooped to characterizations of one another as "inexperienced," "rash," "unpredictable," and "irresponsible." We'd rather they have laid out their perspectives clearly and left the analysis, judgment, and any criticisms up to the voters. Constructive conflict focuses on content issues. Destructive conflict focuses on personal issues. Don't we, the voters, deserve more focus on content?

One question from the audience provided a glimmer of hope. A woman inquired about the heavy economic burden of taxes and health care. Both Obama, then McCain, addressed the woman with empathy. They used phrases such as, "It's easy to see your frustration," and "I can sense your cynicism." Constructive conflict behavior includes the ability to empathize and understand the perspectives of others. Both candidates demonstrated empathy in their responses. We hope whoever wins the election uses empathy and perspective taking as they maneuver through the many conflicts facing our nation.

As the debate ended, Obama and McCain strode to the center of the stage to shake hands (which interestingly never happened as Obama offered his hand but McCain apparently didn't notice), blocking moderator Tom Brokaw's view of the teleprompter. As Brokaw struggled to read his concluding remarks he laughed and motioned for the candidates to move. Obama and McCain, realizing their error, quickly and in perfect synchrony, pivoted away and apologized. Order was restored. In this moment of genuine, human, unintentional misunderstanding and subsequent resolution, we all smiled. Perhaps there is hope.

We'll see on Wednesday night.

Blood and guts! That's what's going on everywhere in the marketplace right now. There's the credit crunch, decreased consumer spending, the bailout quandary, the jobs report, fuel prices and surcharges, the stock market falling, the pending election, our uncertain future. One part of me fully comprehends how today's economic, political, and social climate could leave people paralyzed. Yet, I'm more determined and motivated to do the hard work, the sometimes seemingly impossible work, to succeed despite what the world is throwing at us.

If business is war, here's a pertinent analogy. In Patton, the famous movie featuring George C. Scott depicting World War II Gen. George Patton, one scene stands out. Walking amongst casualties of a battle, with blood and guts and carnage everywhere, Scott, playing Patton, looks to the heavens and says, "God help me because I love this stuff!" Gen. Patton was one of this country's greatest strategist and military leaders, even if he was a bit twisted. As an entrepreneur, you too have to be a bit twisted to do what you have to do day in and day out to succeed despite today's chaotic times.

Personally, I could not muster the resolve to do the hard work if it weren't for the motivating factors of our country's and my organization's challenging times. It's exasperating to have to downsize good people in order to do what I have to do in right-sizing my ship. But you can't, as an entrepreneur, not respond aggressively to threats to your organization from outside influences. Being paralyzed, in today's paralyzing times, is just not an option if you are going to survive. Instead, the media, the banks, the instability we face, needs to fuel the entrepreneurial fires in a way the status-quo business environment never could on its own.

Today, everything we do and how we do it is being sifted through with a fine-tooth comb to make certain of the cost-benefit returns on our investment. When the cow's fat, how do you motivate an individual or team or even an organization to do that? Like every business today, we need to increase sales while decreasing costs and Houdini ain't around to help us. That's why the last thing any of us can afford to do today is to be paralyzed by fear. To quote another famous American leader who said this in the middle of our country's worst economic times, The Great Depression, "So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself -- nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory." (In case it doesn't sound familiar, that was President Franklin D. Roosevelt during his Inaugural Address, March 4, 1933.)

As entrepreneurs, it is up to us to prevent fear -- however well founded it is -- from gripping our organizations and creating company-paralyzing self-fulfilling prophecies. I say, praise God for the motivation that's been amply provided by our economy today and the subsequent motivating resolve it brings about in me.

I wish I had a dollar for every time I've heard this question over the last 25 years. I could retire tomorrow!

Why do so many keep bringing up this tired cliché when we clearly know that "business ethics" is not a contradiction in terms? Obviously, this cliché does point to something true about joining "business" and "ethics." At the same time, I think this cliché conveys something very misleading that can derail corporate ethics initiatives. It's time to separate the truth from the error.

People never will stop repeating this cliché because, deep down, we know that it's not always easy to be ethical—in business or anywhere else in life! Sometimes it's hard to know what the right thing to do is. Because modern life is complex and fast-moving, we sometimes are honestly perplexed about what ethics require in a particular quandary.

Other times, when it is crystal-clear what we should do, we still may stumble because there can be powerful obstacles to acting ethically. For example, in the short term, acting ethically can sometimes be very expensive.

So, calling "business ethics" an oxymoron rightly recognizes that ethics is a challenge. This much is true. That said, I think that this cliché also betrays a deep error in the way that many think about ethics in business. This error can be costly for business and it should be cleared up once and for all.

Calling "business ethics" an oxymoron conveys the misguided assumption that ethical commitment and conduct have to be 100% in order to be valid. In other words, if you're going to be ethical you have to be a saint. Like being pregnant, being ethical is thought to be an all-or-nothing proposition: you either are or you aren't!

It's certainly not bad to strive for ethical perfection, but it can be very destructive to insist upon it. Demanding 100% ethical perfection can have the unintended reverse consequence of discouraging people from trying to be ethical at all. When faced with the impossible, sometimes people just give up.

The hard realities of business require give-and-take among people as they strive for pragmatic solutions. These solutions aren't always perfect, but they often represent the best we can achieve. So, we shouldn't give up, by saying it is impossible to join "business" and "ethics," simply because it is sometimes hard to put our ethics into practice.

The implications for business are serious. Just recently, there were stories in the news media about how certain socially responsible investment funds had fallen short in their goals to achieve ethically clean portfolios. Much of this coverage cynically suggested that investors shouldn't even try to apply their ethics to investment decisions because of the difficulty of avoiding "dirty hands" in the market place.

I oppose this kind of cynical response. Instead of concluding that ethics and investments don't go together, we should be seeking even more sophisticated and thoughtful ways to link our values to our wallets.

Business schools and leading companies support the idea of "continuous improvement." This means that any business practice can be improved upon. Effective businesses cut victory laps short in order to improve quickly upon their successes. Entrepreneurs in particular understand that "sitting still" is the same as "slipping backwards."

But continuous improvement also entails the frank admission that we're not perfect—not ever. If we were perfect, there'd be no room to improve. There's no shame in being less than perfect. The shame would come only from giving up on doing better.

Continuous improvement as a business philosophy makes good sense. Why should it not also make sense as an ethical philosophy? There's no such thing as an ethically perfect manager, or an investment fund, or a company. If perfection is the impossible standard we're applying, then indeed we might as well conclude that "business ethics" is an oxymoron.

It makes no sense to impose this unrealistic standard on business or anything else. Instead, every company should examine its own practices and policies, and ask, "How can we improve what we're doing? Is our ethics code adequate? Do we train our people as well as we can? Do we treat our customers and other stakeholders as we should?"

The answer, of course, is that we can always do better. But far from being a reason for cynicism, this answer is actually good news. "Business ethics" is not an oxymoron; it's an opportunity.

Conflict is a challenge everywhere, in every business. But rarely is it this public.

A recent headline in the St. Petersburg Times blared, "Effort issues incite angst." Our hometown team, the Tampa Bay Rays, this year's "Cinderella club" in Major League baseball, has a problem. It's a problem not unlike one of the most common issues faced in workplaces across the country and around the world. One of the key players on the team appears, no check that, is demonstrating, a lack of commitment to the team.

In short, rising star centerfielder B.J. Upton has been guilty of one of the cardinal sins in any level of sports: a lack of hustle. He failed to run hard to first base in a recent game. After the game, Ray's manager Joe Maddon met with Upton, discussed the situation, and gained assurances that this would never happen again. About a week later, Upton again failed to run full speed after hitting a ground ball that turned into an inning-ending double play. Maddon pulled Upton from the game, met with him again, and did not allow Upton to play in the next game. Once again, all parties, including Upton, agreed this type of effort was unacceptable. Several games later, Upton hit a line drive off the left field wall. As Upton jogged toward second base, the throw from the outfielder reached the first baseman who tagged Upton from behind for the out. The crowd booed. Upton walked off the field in embarrassment while Maddon and the Rays wondered how they could continue to count on him.

The conflict here is not just between Upton and his boss. Upton's behavior has had an impact on the entire team. The climate has been damaged and emotions are running high. What makes this situation so interesting is that the offending behavior was addressed immediately. And not just by the manager. Recent reports from the Rays indicate that several teammates have discussed the situation at length with Upton. And the team met as a whole with Upton apologizing and committing to be there for them as the Rays make their stretch run.

We're typically cautious about using too many sports examples and analogies. In this case, however, I believe there is a great lesson to be learned. When conflict arises because of the unsatisfactory work habits of a teammate, the behavior must be addressed swiftly. The integrity of team norms and climate is critical to the motivation of team members and ultimately the performance of the team itself. Handled well, events like this can be a galvanizing force for any team. Handled poorly or ignored, even the best of teams will suffer. Here's hoping the clear, quick steps taken by the Rays will pay off with a championship season.

I recently read an opinion piece by Steven Katz in the Chicago Tribune that discussed bringing business logic to the search for a presidential candidate. While politics does play a role in business, the hiring of a CEO and the voting of a candidate into office are as different as McCain is from Obama.

But what if, the author wonders, we used an executive search firm -- the way businesses usually do -- to qualify our next President? What criteria would a president of the United States or a CEO be judged by as an indicator of success? Mission critical factors were organized into seven categories: strategic skills, operating skills, courage, energy and drive, organizational positioning skills, and personal and interpersonal skills. Both quantifiable hard skills and less quantifiable soft skills compose a great leader. What I found interesting about the piece was the general consensus from executive search firms that when leaders fail, it's almost always related to soft skills. People IQ, self-awareness, chemistry, values, ability to motivate, etc.

Edward Santimauro of executive search firm Korn/Ferry International says "study after study says executives fail not because of their technical skills or industry experience but because of their lack of ability to lead and fit into a culture." The conclusion: it's not what someone knows or who someone knows. Instead, the most important factor in an executive's success is the soft skills. Teamwork, motivation, leading others while playing well and overall chemistry with the organization they are in charge of.

The soft skills come naturally for some, but are the hardest things to master for others. That's a lesson every leader needs to be cognizant of when striving for success.

Conflict is an inevitable part of most leaders experiences. It can be at the root of some of their best ideas -– or their worst failures. Whether they get good or bad outcomes out of conflict comes mainly from how they respond to it, both emotionally and behaviorally. Numerous books talk about how to handle conflict from a behavioral standpoint. They encourage people to listen carefully to the other person in order to understand his or her perspective. They suggest transforming conflict from an adversarial process to one that involves collaborative problem-solving. When things go wrong, they recommend reaching out to the other person to try to get communications restarted.

These are all tools that any of us can use. They’re good ideas which can help people resolve conflicts that result from their different interests, needs, and values. But it’s not that easy to be calm and rational -- or even to remember these rules -- when you are in the midst of exploding. The best approach? Learn how to cool down and slow down when you are faced with conflict and feel your emotions rising. The best news? We can help you do just that.

We use an assessment instrument that, among other things, measures people’s hot buttons -- the behaviors in others that tend to upset us and cause us to get angry or otherwise emotionally off balance. (You can try a free version of part of the hot buttons portion of the assessment here.

Knowing more about what causes you to get upset when you are faced with conflict can help you figure out why these behaviors upset you and help you adjust your reaction to them.

In addition to knowing what triggers your emotions in the first place, there are techniques that can help you cool down when you feel your emotions rising. Traditional approaches include taking deep breaths and thinking about something more pleasant to distract yourself. More refined techniques involve observing or reflecting on your thoughts and feelings. This enables you to detach your sense of self from the negative emotions and thoughts, which effectively causes the emotions to become less intense and then to subside.

In spite of our best efforts to cool down, sometimes things begin to spin out of control. If we keep going, we’ll likely react negatively and do something that will escalate the conflict. It’s time to STOP and begin to SLOW things down before taking next steps. Taking a time out will enable you to slow down physiologically and mentally. It effectively gives you another chance at practicing cooling techniques.

Once you are able to reach a more balanced emotional state, you will be ready to practice the constructive types of communication behaviors that can help lead to satisfying results to conflict.

Some people feel that if they can just keep their feelings inside and use logic in conflict contexts, everything will be all right. Our experience suggests otherwise. Feelings that are suppressed tend to fester and eventually they will leak out in some more destructive manner. This has led us to recommend to our clients that they need to deal with their emotions around conflict or their emotions will eventually deal with them.

The choice is yours. Choose wisely.

It is said that the eminent 18th century British jurist Lord Mansfield once gave this advice to a struggling Colonial judge: "Consider what you think justice requires, and decide accordingly. But never give your reasons; for your judgment will probably be right, but your reasons will certainly be wrong."

Today we can still relate to the keen insight in this advice because nearly everyone squirms when pressed to give reasons for their views—and not just in the courtroom. It's one thing to venture forth an opinion. It's quite another to back up that opinion with evidence because this increases the chance that we will make a mistake or say something that others will challenge. As we reveal the reasoning behind our decisions or choices, we feel exposed because we make it easier for others to criticize us. It's so much easier simply to assert ourselves; it is far more difficult to have to explain ourselves.

Continue reading "Being a Leader Means Being Able to Explain"

Summertime is my favorite time of the year. For one thing I don't work! The majority of the summer I'm at the lake in Wisconsin, dreaming and scheming. Some might call that work -- that is, thinking about work when you're not there. But to me those precious few months when I mostly stay away from the office (and even better yet the airports) are the most productive part of my year on a number of fronts:

Continue reading "Investing in Summer"

Most people prefer to avoid conflict. Leaders don't enjoy it either, but effective ones know that too much is at stake to ignore conflict. Poorly managed, it can lead to a number of out-of-pocket expenses. Addressed skillfully, conflict can actually improve creativity and decision-making.

If leaders avoid conflict or respond with destructive behaviors, it can lead to a type of conflict researchers describe as relationship or affective conflict. Then, things really get worse. Research has shown that this type of conflict tends to prolong and escalate negative feelings that lead to reduced communications and commitment.

When this kind of conflict is prevalent in organizations, you stop running a company, and you start running interference. Managers wind up spending more time trying to work out solutions, turnover rises as good employees leave to find more acceptable work environments, and absenteeism or its cousin presenteeism sap productivity. When conflicts fester and grow over time, they can lead to even more serious outcomes such as sabotage, violence, labor unrest, lawsuits, and bad publicity.

But when leaders are able to respond to conflict constructively and encourage others to do so as well, they can find benefits hiding in the very same differences that can lead to bad outcomes. Researchers have identified a second type of organizational conflict termed task or cognitive conflict that when harnessed can lead to higher productivity. When people engage in task conflict, their focus remains on the issue at hand and their efforts revolve around problem-solving rather than finger-pointing. When teams engage in task conflict, they regularly exhibit higher levels of creativity and innovation. When issues can be debated and ideas vetted, leaders are able to arrive at better quality decisions and team members will be more committed to implementation because they have been active participants in the process.

While the concept is straight forward, it is not easy to keep the focus on problem-solving. When people's ideas are criticized, it is very easy for them to take the criticism personally, become angry, and strike back. Leaders need to closely monitor when it emerges to make sure teams keep their focus on the task at hand. They also need to model effective behaviors to keep communications positive and solution- focused.

To make it work, leaders must respond rationally rather than just react. One leader's team faced a critical decision with team members deeply split about whether to invest in a new product design. The leader favored the new approach, as did two other members of the team. They argued vigorously for their position – so much so that the others on the team became angry because they felt they weren't being heard. Finally, they forcefully challenged the leader and he reacted with hostile remarks. Things deteriorated quickly and didn't get back on track until intervention from a third party.

While it is easy to get into a win-at-all-costs mindset, leaders must recognize that conflict can rapidly escalate when it is not handled well. Conflict is too important to ignore or to approach by flying on autopilot. Leaders need to become conscious of their emotional and behavioral responses to conflict and then exercise discretion as they address the critical opportunities that conflict provides.

Ethics scandals create a sense of urgency that business must do a better job of promoting ethical behavior. There is a growing suspicion that legal compliance alone is not sufficient to promote responsible practices and to maintain the public trust. In an earlier post, I wrote of the need to develop the moral imagination of entrepreneurs who are our best hope for insightful, innovative solutions to the ethics challenges of today and tomorrow. But how is it possible to develop moral imagination? Some say that ethics can't be taught, at least not past early childhood. Either you have ethics or you don't, goes this line of thinking. Trying to teach ethics is like trying to teach someone how to carry a tune: If a person is tone-deaf, no amount of instruction will help.

This view that ethics cannot be taught is refuted by developmental psychology, which shows that people do acquire more sophisticated forms of ethical reasoning as they mature. Learning ethics might be like learning a language: It's easier to learn when young, but everyone can improve their foreign language skills, even later in life. There's a certain kind of wisdom that comes only from experience and ethical reasoning improves with instruction and practice.

Compliance training is all about learning rules that prevent business from doing harm. It deals less with the grey area of ethical quandaries and more with basic boundaries that should not be crossed. By comparison, it can be harder to determine the limits of our obligations when we seek to do more than simply stay out of trouble. We are required to do deeper thinking when we are asking how much good we should do in a particular business situation.

Continue reading "Ethics Can Be Taught"

I just finished reading a great book called "Sway: The Irresistible Pull of Irrational Behavior." Finally, I thought, when I first read the title, a book to explain why the rest of the world that doesn't agree with my thinking is so messed up! I snatched it from the shelf and eagerly delved into its pages, looking for the explanations my logical brain craved. Well, as you may have guessed, the answers I got were a little different from the ones I thought I'd find.

Newsflash: People, even when given a choice of thinking logically and getting beneficial results, will often act emotionally despite the consequences. The effects of this irrational behavior on businesses can be far reaching. And it has many causes. Here's one: A person's internal barometer for "fairness," the researchers point out, is a powerful emotion that "sways" even the most straight forward of business decisions. One case study in particular struck a chord with me:

Continue reading "It's All About the Relationships"

I got a chuckle reading a Reader's Digest article a while back telling the story of a New York City road crew that found an interesting way to earn some extra money. Apparently, during the noon lunch hour, they'd sell a few minutes on the jackhammer to suit-wearing paper pushers more than happy to drop ten or twenty bucks to take out their frustration on an innocent chunk of asphalt. This enterprising road crew struck a chord of human nature left unmet by your typical white-collar desk job. I was reminded of this story after calling my college buddy "Mike" who had recently exchanged his desk job for one in the field building ponds.

Continue reading "I Want to be Like Mike"

Whether or not you consider yourself to be politically inclined, a smart business leader can learn a lot from the campaign rhetoric being tossed around during election season. What McCain, Obama, and Clinton understand -- or at least their campaign managers understand -- is that policies and procedures, regardless of how sound they might be, do not win over the hearts and minds of voters. People follow those who engage them and connect with them on an emotional level. To do that, candidates are always searching for that special story or photo opportunity that will help them tap into the cultural zeitgeist.

But this column is about business leadership and since your employees aren’t voting for management, what does this have to do with you? Everything. The failure of most leadership training is that it is focused on policy -- and policy is dry, sterile, and boring. Many leadership gurus publish works that are so dull they are virtually unreadable. Leadership isn’t a series of steps on how to implement 360-degree feedback or how to create a new mission statement. Leadership is about making employees care. And while your employees may not be voting for you in a literal sense, nobody can lead anyone who isn’t willing to follow.

Continue reading "What You Can Learn from Barack, Hillary, and McCain"

Tony Sargeant from Atlanta is someone I've billed as "one of my favorite customers." Tony's the rare bird who spends his time doing what he loves and is good at it while not being overwhelmed with running his business. Which also means he spends his time building and selling water features during the day and then comes home at night to Live the Lifestyle with his bride of 25 years. I wonder how many entrepreneurs out there started out doing what they love and were good at it only to find themselves dragged down to doing things they hated and subsequently weren't that good at -- all in a desperate attempt just to keep their heads above water while managing their own businesses? How nuts is that?!

Continue reading "Living the Lifestyle"

One of my favorite times of the month is when I meet with my teammates one-on-one for what has been dubbed "15 minutes with the Pond Guy."

HR tries to get any new employees slotted into these brackets and to round out any open slots with whomever else wants in. The goal of these sessions is for me to get to know the employees a little better (and vice-a-versa) -- while offering my advice on how they can succeed here. Although the sessions always seem to end on a high note, they often begin -- especially with new employees -- with some trepidation. The other day, however, I had anything but the normal interaction with a new employee hired for our construction division.

Continue reading "Fifteen Minutes with the Boss"

Lessons in creative capitalism from the people at Google.

Recently Google announced it is setting aside one percent of its profit and equity -- up to $175 million over the next three years -- to “make the world a better place.” At about the same time, Bill Gates gave a highly publicized speech to the World Economic Forum that called for a “creative capitalism” that uses market forces to fight global poverty. These are but two of the most visible examples of a new business strategy called social entrepreneurialism. It is a strategy that every business needs to consider to be relevant to today's complex world.

Social entrepreneurs use cutting-edge, innovative business methods to promote positive social change. While profit is still the primary yardstick for assessing business, social entrepreneurs also measure the extent to which business makes a positive impact on society. Traditional nonprofits and citizen groups have been mainly distinguished by their benevolent intent. In contrast, social entrepreneurs stand out by their pragmatic emphasis on getting results. Perhaps once it was enough to want to do good. Now it is necessary to do good in the most effective ways possible. Social entrepreneurs make a difference by applying original business strategies to doing good.

Continue reading "The Challenge of Social Entrepreneurs"

For the sixth year in a row, I spent spring break in Cabo San Lucas, Mexico, with a bunch of college-aged men. If you remember back to your college spring breaks, it was all of that and then some. The "all of that" is pretty self-explanatory; it's the "then some" that's most unusual. The American Leadership Academy (www.ALACabo.org) is based there and with a goal of "training tomorrow's leaders today" it's an organization I'm proud to be affiliated with. The ALA is the brainchild of Jerry Nelson, a 78-year-young serial entrepreneur who, among his many exploits, started Ticketmaster and found water in Scottsdale, Arizona, before the city was developed.

In 2008, the ALA will introduce more than 700 young men to industry leaders, scientists, motivational speakers, and successful entrepreneurs -- all there to share the life lessons they've learned outside the classroom. Where were these kinds of programs when we were going to school?!

Whatever information I give each year, I get back just as much, if not more, from these young men. As much as I try to stay hip and cool -- and even though I'm only 37 and college seems not that long ago -- the generation gap is ever present. I've seen professional speakers who are used to motivating rooms full of other middle-aged business people bumble over words they've spoken many times before, semi-paralyzed at addressing a t-shirt wearing, sandal clad, next generation. As unusual a situation as it is for many of the speakers, however, it is even more unusual for the young men eager to hear things they probably never heard in school or at home.

What they hear is exactly the kind of stuff all kids should get a chance to hear -- one generation talking to the next on lessons of life, love, and regret; on victories and defeats; on getting up after you fall -- all dished out from the same real world these men will soon be facing. And as impossible as it is to summarize with one word exactly what it is they get out of these sessions, I'd say "confidence" comes close -- confidence that with the right attitude, the hard work needed to succeed at whatever endeavor they pursue, and the ability to dream big and then stretch to get there, yes, it's possible they too can succeed. Their ears, their minds, and their hearts need to know this, and you can just feel the positive energy throughout the sessions. I always leave charged by that energy and feeling good that I played a small part in generating it.

Here's where the business part comes in. Many of the people who work with me at Aquascape and with you at your companies are the same age as the ones who go through the ALA each year. Why deprive them of the important thoughts, words, and feelings their minds, hearts, and souls so desperately need? If there's one thing almost everyone from our younger generation needs to hear from us, it's the encouragement and confidence to believe in themselves. They might be as scary to us with their iPod rocking ways as we are to them, but it's our genuine interest in them that just might give them the confidence they lack in themselves to make their dreams a reality.

So, the next time you're riding that young worker for yet another mistake, take a step back and think about yourself at 20-something and what it is you know now that you didn't then. Then share it! It just might make all the difference in the world. For both of you.

South Bend, Indiana. Ever heard of it? There's a school there of about 8,000 students that also has a football team (at least, it had one until last season). But it's also got a much greater challenge than restoring Notre Dame’s gridiron greatness. And that is restoring its city's overburdened and ailing sewage and stormwater system back to full functionality. Current estimates for the town of 150,000 to do just that come in at a whopping $200,000,000! Do the math. That’s just over $1,300 for each and every resident currently living there! All of a sudden, the rebuilding program that head coach Charlie Weiss has ahead of him seems a heck of a lot easier than the challenges facing South Bend’s municipal government.

Continue reading "The Trillion Dollar Opportunity Right Beneath Our Feet!"

Has your company done a S.W.O.T. analysis? That's a Strength, Weakness, Opportunities, and Threats checklist of internal and external factors affecting your business -- what you're good at and not so good at organizationally, where there are opportunities to grow, what threats might keep you from growing. An accurate and evolving S.W.O.T. analysis is a vital tool for any organization to use to influence strategy, focus, and the deployment of resources. If leveraged properly, a S.W.O.T. analysis can create a competitive advantage for you and your business in the marketplace.

Case in point: for a while now, we have recognized water restrictions as a threat to selling water features. But it wasn't until last year that we seriously focused on this element of our S.W.O.T. analysis. Seeing how severely water restrictions affected our customers in the Southeast, we knew it was high time to turn this threat into an opportunity. I'm excited to finally reveal (see When Not Hitting Your Numbers is a Good Thing) our much speculated on, new venture. In 2008, Aquascape is debuting our Rainwater Harvesting system, which is designed to turn a threat (water restrictions) into an opportunity (capture your own water on-site and reuse it). Never have we put more thought and planning into the roll-out of a new product. That's because unlike other Aquascape products and programs, Rainwater Harvesting launches us -- and our customers who choose to adapt their business model -- into a whole new and exciting aspect of our industry.

Continue reading "Turning Threats Into Opportunities and a New Direction"

Well, the news ain't good. The U.S. economic outlook for 2008 seems to get worse each day, and it's not likely to get better until the second half of 2009. The television, newspapers, and magazines seem to be on the economists' side, especially if you're lumped in the catch-all category of housing starts the way we are. So what's an entrepreneur like you or me to do when the media are saying the sky is falling and the world is saying play defense but we are more suited to playing offense?

Continue reading "Think Offensive, Be Defensive"

It's doom and gloom out there, and it's not just Chicken Little saying the sky's falling -- even Warren Buffet says we're in a recession. If that's got you concerned about 2008 revenue, that doesn't mean you're a pessimist. You're a realist. Being an eternal optimist myself (my strength and Achilles heal), here's how we are proactively attacking the future. We are not circling the wagons!

Continue reading "Circle The Wagons? Not!"

Well it's been two weeks since my last post and I've got to admit something: Blogging ain't easy! Besides needing to feel moved to write something in an educated fashion, I need to get my energy level up to deal with the ramifications of what I say. Enough crying and on to the educated part -- I hope. Aquascape isn't about The Pond Guy! There I said it. Aquascape is so much bigger than me that turning the blog into a Greg-fest (or feast) is just a waste of everybody's time. I've rambled enough so let me get to my point. Aquascape is going places.

Continue reading "It's Not About Me"

What's in a name? What's in a code? How about 007, as in James Bond 007? What does it tell you about the man, the mission, and what it's all about? Well, if you haven't read the books or seen the movies, it doesn't tell you a whole heck of a lot!

How about 100 million dollars? Sounds a lot like Mike Myers' character Dr. Evil in the Austin Powers movies, raised pinky and all.

I started to use the code name 100MM as a shorthand way to say a whole lot of things without actually saying them. It was catchy, it sounded like a nice round number, it meant so many different things that I couldn't get out one by one. So, I just kept saying, "I want Aquascape to be a 100MM dollar company." Unfortunately, this also created a whole lot of misunderstandings -- namely that Aquascape was only about money.

Continue reading "Code Name: 100MM"

"The Blog?!" Sounds like something that just climbed out of the swamp in a bad B-grade, Steve McQueen movie. Yet that's exactly what I find myself faced with as I wrestle with this monster I've created. And just like Frankenstein, my blog came to life with a bolt of lightning on a dark and stormy night. Aquascape's first ever reduction-in-force occurred, scarily, right when my blog was coming to life--unveiling the dark side of my creation.

What was conceived with so much hope and promise quickly morphed into a mud-slinging forum for anyone and everyone to air their feelings. Yes I know a little due diligence or SWAT analysis ahead of time could have easily brought to light the potential risk of creating such a prominent public forum to reveal the inner sanctum of a privately held company. Yet I've never felt the need to allow outside critics or commentators to dictate how I make decisions or live my life. Now I'm wondering if having thick skin -- a trait that has previously served me well, is on its way to becoming my Achilles heel?

Continue reading ""The Blog?!""

I just returned from a great adventure organized by an outfit called Backroads that consisted of hiking, biking, and rafting in Costa Rica (hence my absence from this blog). In the group of 20 there was a doctor who established the guidelines for screening prostrate cancer, a V.P. of Coldwater Creek, which has opened up hundreds of retail stores as the chain has expanded beyond catalog operations, and a founder of the retailer The Finish Line. Needless to say, I was every bit as curious about what these people had to say as I was about the Costa Rican rain forest interacting with the native wildlife. I was particularly interested in the viewpoints of David Klapper, one of the three founders of The Finish Line, an athletic apparel and shoe retailer with more than 700 stores and $1.2 billion dollars in sales. If anyone could offer some real world wisdom on Aquascape's distribution strategy, he could.

Continue reading "Find Your Niche and Develop It!"

Self-confidence is the fundamental basis from which leadership grows. Do you have it?

If you've read my column for any length of time, you know that I've covered many varied aspects of leadership -- and hopefully I've helped you get a bigger picture of what it means to be an effective manager. But I've made an egregious omission. There is one particular component of leadership that is so important, so necessary, that without it, leadership cannot exist. That component is confidence.

Self-confidence is the fundamental basis from which leadership grows. Trying to teach leadership without first building confidence is like building a house on a foundation of sand. It may have a nice coat of paint, but it is ultimately shaky at best. While the leadership community has focused on passion, communication, and empowerment, they've ignored this most basic element and in the process they have planted these other components of leadership in a bed of quicksand.

At the end of the day, leadership is about having the confidence to make decisions. If someone is afraid to make and commit to decisions, all of the communication and empowerment in the world won't make a squat of difference. For example, one former client of mine was so averse to making commitments that she would not give a straight answer without a qualifier. Every attempt to hold her to her word was met with, "well, maybe but I'm not really sure." It wasn't lack of passion or communication that held her back. It was her lack of confidence to commit to her decisions and goals.

Continue reading "Without Confidence, There is No Leadership"

To deal effectively and responsibly with both ongoing and emerging ethics issues, business needs to shift its perspective from reactive compliance to proactive moral imagination.

Recent business ethics scandals have created a moral minefield of shifting expectations and growing uncertainty about the responsibilities of business. These scandals have triggered a backlash of stringent laws and standards, most notably the Sarbanes Oxley Act. While we should not minimize the importance of a fair and consistent regulatory framework, the solution to our most important, emerging ethics issues in 2008 will not come from laws alone. What we need from business is a renewed moral imagination that helps us frame the issues in innovative, more helpful ways.

What critical issues lie ahead? In 2008 we will continue to see the unfolding of major concerns such as the subprime mortgage financial crisis. Business will step up its response to global warming. Issues of globalization will become even more pressing than before. These issues are as obvious as they are important. And yet, it could well be that the most important issue facing us in 2008 has not yet been anticipated by even the most thoughtful forecasters. When the rate of change is accelerating, it is not surprising that some of the most serious challenges to business ethics seem to come from nowhere.

Continue reading "The Moral Imagination of Entrepreneurs"

When you've lost your credibility, sometimes the only way to get it back is to admit you were wrong.

Many leaders believe resolve is an indicator of strength, and so vehemently resist change that they will accuse those who suggest considering alternatives as weak-willed wafflers. In most cases they're right -- leaders do need to show commitment and consistency. Employees value a leader who can stick to his guns. But self-justification and blind faith in the face of mounting evidence to the contrary can quickly push those leaders over the line into arrogance. As much as leaders worry about appearing strong and resolute, it is much more likely that they will err in the direction of looking delusional in their consistency. If you've crossed this line then you are at serious risk of losing all credibility and there is only one way to get it back: Admit you were wrong.

While admitting our mistakes may sound simple, our psychological wiring works against us. Cognitive dissonance explains that our minds actively seek out confirming evidence to support our decisions and self-image. For most people, this confirmation bias is so strong that we often end up convincing ourselves of things that sound preposterous to more objective observers. What this means from a practical standpoint is that since you were the one who made the decision, your employees never reach your level of commitment. Therefore if the decision was wrong, your employees will almost always see the folly of your ways before you will. If the gap between when they see it and when you see it is too long, you will lose their faith and confidence.

Continue reading "Can You Admit You Were Wrong?"

We just re-hired the first of the people we recently laid off (Reining in My Dreams One Person at a Time). It wasn't for the same position or even the same pay, but it was an honor to ask him to be a member of our team again. As it turned out, he ended up getting a month's severance and taking a job back with us five weeks later. I think more than a few people would say that's not a bad deal and even a lucky break. In actuality though, luck had little to do with it.

Continue reading "The Man in the Arena"

You hear it so often, it's easy to dismiss the phrase, "there's opportunity in adversity." But if there's one thing I've learned in my years in business, it's that when one door closes, a window opens beside it. That's why I'm finding myself as excited as I've ever been not just despite but actually because our sales results for 2007 came in below projections. Knowing what I know today, I shudder to think what would have occurred if we had hit our sales objectives last year! And, yes, I am an entrepreneurial dreamer. But I still believe this concept holds water (pun intended). Let me explain:

Continue reading "When Not Hitting Your Numbers is a Good Thing"

I have a great business dilemma that is forcing me to question a long-standing belief of mine. I believe firmly that a huge factor in Aquascape's success has been our singular focus on decorative water features. By resisting the temptations, which I imagine all businesses face, to get into other "related" or even unrelated business ventures, Aquascape has become number one in its field. Yet, now I am being tempted once again to venture out of our core business model to grab hold of a new opportunity, albeit in a related field. But related is still not our core, and if we were to pursue this new opportunity we would be going against our long held value of sticking to the decorative water feature space. Which begs the question: Does sticking with doing what made you the best sometimes prevent you from becoming all that you can be?!

Continue reading "Is Losing Focus Always a Bad Thing?"

For four years running, from 1999 through 2002, Aquascape landed on the Inc. 500 list of the fastest growing privately held companies in America. Yet on December 31, the core business that achieved that feat with will be dead. Why would we kill what was a successful and prosperous business in favor of another model that is completely untested, you ask? Simple. We decided to stop trying to be all things to all people and figure out for the first time what we truly want to be when we grow up.

Continue reading "What Got Us Here Won't Get Us There"

Take time out to learn from every experience and apply that learning in the future -- and in your business.

The practice of reflection, like many skills that make a leader more effective, doesn't always come naturally. Some people never stop doing long enough to reflect while others spend so much time reflecting, they never start doing. The key is to find balance between these two extremes and put reflection to work for you.

While it may sound like some New Age practice, reflection is basically just structuring time to stop what you're doing long enough to assess what's working, what's not and why so that you can adjust future actions in order to achieve a better outcome. In other words, reflection is taking time out to learn from every experience so that you can apply that learning in the future.

Look before you leap

Human beings are natural problem solvers. We start looking for things to change as soon as we identify a problem. Often labeled as “drive” or “initiative,” this tendency is applauded in many cultures. It's exactly this tendency that makes taking time to reflect so necessary.

Without taking this time out, we often find ourselves elbow-deep in solutions before we realize we're working on the wrong problem. Taking time out to reflect first can help to ensure that time, effort and money aren't wasted in the long run.

Continue reading "When Doing Nothing Is the Right Thing"

I think maybe my next blog is going to be about what I'm learning about blogging! Resisting the impulse to respond to all of the heated rhetoric of the past week, I'll instead stick to the topic du jour ... namely, the reasons we had to let people go. To really address this issue, I thought it would be beneficial to take a step back and explore why people are hired in the first place.

Continue reading "Why Do Businesses Hire People?"

Never has that cliched business mantra, "It's About the People," hit closer to home for me than when I had to look in the eyes of those I was letting go. Failure is what I felt -- not their failure, but mine.

I knew it wasn't going to be easy but I had no idea how hard it would be. Sitting alongside the HR manager and the department manager, along with each person's direct supervisor, and seeing the full gamut of human emotions in the outgoing employees was, by far, the most emotionally draining experience I've ever had. From quiet resignation to tears, angry words, fear, and even some high fives as the outgoing employees lifted us up. I gave and received 16 hugs out of 17 people, which helped more than it hurt. As for the one who was too hurt/scared/mad, a call to her father hopefully let her know we cared and that it truly wasn't personal.

Wasn't personal huh?! Telling people we could no longer afford them, and seeing, hearing, feeling their pain was as personal an experience as I've ever had. Before doing this, I lived in La La Land about the value, self worth, and genuine need people have for employment. I knew people loved to work here but a job is a job is a job -- or at least that was how I felt before I took that job away. There was the first warehouse laborer, a Hispanic man who had worked for me for eight years and spoke little English, telling me in Spanish even I could understand, "Aquascape mi familia," (bite lip here). There was the young woman saying through tears that she had planned on retiring here (just kill me now and put me out of my misery). Painful as this was, I knew, of course, that what I was going through was 100 times easier than what they would soon be dealing with.

There were three things that allowed me to survive the day: One, the generous severance packages my management team had crafted. Two, the comment from the out-placement firm that our process should be a model for all companies to follow. And three, the real boost came from the calls, emails, and now cards being handed to me by not only those who survived but also a few who left. Today, I'm more inspired than ever to never, ever have to repeat a day like that. Now, the question is, will everyone else move on?

I'll let you know how we're doing and how it's working in my next post. Until then, don't forget it truly is about the people!

The human side of all those budget cutting meetings is about to become a reality. Tomorrow I get to stand in front of the 178 people who signed on to be part of the Aquascape team and tell them something they most certainly didn't expect to hear when they came on board: "For some of you, your services are no longer needed."

Of course, this isn't exactly what I had in mind either, but it is the ugly result of failed expectations. When we hired each of the 17 individuals we will soon have to part ways with, we did so in anticipation of what we thought could be. But what could be didn't happen. And now we can either take the ostrich approach or do what we're doing, pain and all.

Here's how I'm looking at the company's failure to deliver on anticipated results. With each good person lost, we are letting a little dream die. Each person was brought in to further a vision that now must be reined in a little. The dream -- or at least one particular aspect of that dream in relation to each person's role and function -- is no longer cost-justifiable. That's the cold reality of the situation, no more no less. But that's hard for me to swallow, especially when I picture a face for each person we have to let go. Sending them away is like closing the book on all the hope and promise that came with them when they signed on to our company's vision. And yet, I know it's the right thing to do. After all, there are 161 remaining reasons, each one with a dream, that flow into a vision, that I'm responsible for going forward.

I'll let you know how it goes.

I've got a doozie of a dilemma and the only good thing that could come from it is that if it doesn't kill me, it should (hopefully!) make me and my organization stronger. I guess the best way to describe what I'm going through is to say I'm afflicted with the same gene entrepreneurs everywhere have: the eternal optimist gene. That's right, I'm always viewing the green grass that's right around the corner with our new product, new program, or new hire. Basically I live in the world of, "It can be, if only we can (fill in the blank here)." The challenge is that "if only we can" portion of my thinking. It usually requires something that is becoming exceedingly rare around here ... CASH.

Continue reading "How Did I Get Myself into this? By Being a Typical Entrepreneur"

There's an old adage that says the more you learn, the more you realize you don't know. That saying certainly applies to me and my life as an entrepreneur. Yet along the way I have learned a thing or two in business and in life and hence this blog. My name is Greg Wittstock, but I prefer to go by my business mantra: The Pond Guy. I became The Pond Guy by turning my hobby of water-gardening (that's backyard fish ponds, waterfalls, and water lily type stuff) into a $60-million-dollar-plus business with 190 employees and offices located in Chicago and Toronto. I'm 37 years old, married with two kids and a golden doodle dog named Buckeye (in honor of my alma mater, Ohio State). I've got a passion for ponds and Buckeye football but this blog is not going to be about either one; rather it's going to be about another passion of mine ... helping others reach their fullest potential.

Continue reading "Introducing a Blog from The Pond Guy"

Instill a natural passion in your sales team to see your profits rise.

Can better leadership contribute as much to the bottom line as good sales training? One of the biggest challenges of teaching leadership is how to directly and immediately increase sales and profits. I'm often told, "These leadership ideas sound great in a perfect world, but changing culture seems like a long, tough process. What can I do right now to improve my business?" Since increasing sales is the first and most obvious thing that most business owners look at when they want to grow the bottom line, I looked into what sales trainers were doing and found a gaping hole in conventional teachings. A hole that a good leader can immediately fill that will grow a company's sales and build infinitely more trust with customers.

In my work with companies and individuals, the one consistent trait in top- performing salespeople is a strong belief in the product or service that they are selling. If you want to increase your sales without resorting to high-pressure tactics or high stress incentives, simply ask your sales team if they believe they are selling the best product in your industry. If they don't believe that they are selling the best, it is extremely unlikely that they are performing at their highest potential. People naturally sell what they believe in, and while a slick salesman might be able to sell a product that he dislikes, it is extremely difficult to fake enthusiasm for extended periods of time without appearing transparent to clients. Think about it. Could you sell a product that you thought was inferior? Could you sell it well? Or perhaps more importantly, would you want to sell it at all? Many people assume salespeople are motivated by money, and while this is largely true, it's absurd to think they are motivated only by money. Salespeople are still human and while commission bonuses and sales spiffs will probably remain an important part of most sales compensation plans, studies consistently show that financial incentives never have the same lasting impact as an employee who is passionate about his work and it is a simply not possible to be passionate about something that you think is inferior.

Continue reading "Growing Sales Through Leadership"

Organizations benefit more from leaders who take responsibility for what they don't know than from leaders who pretend to know it all.

Although it is probably one of the least discussed leadership competencies, self-awareness is possibly one of the most valuable. Self-awareness is being conscious of what you're good at while acknowledging what you still have yet to learn. This includes admitting when you don't have the answer and owning up to mistakes.

In our highly competitive culture, this can seem counterintuitive. In fact, many of us operate on the belief that we must appear as though we know everything all the time or else people will question our abilities, diminishing our effectiveness as leaders.

If you're honest with yourself, you'll admit that really the opposite is true. Because whether you acknowledge your weaknesses or not, everyone still sees them. So rather than conceal them, the person who tries to hide weaknesses actually highlights them, creating the perception of a lack of integrity and self-awareness.

Continue reading "Self Awareness and the Effective Leader"