This article is part 2 of 2 in what I wrote a week ago on “How the mighty fall”. Part one is located here. This article serves to help you understand how mighty and big companies fall and what you can do about it.

Stage 3: Denial of Risk and Peril


As companies move past stages 1 and 2, they will fall deeper into Stage 3 when they begin to ignore accumulated warnings. They tend to overlook obvious data that something is not doing well in their new ventures and believe that things will get better. They continue to bet big on the new ventures while denying the cracks of risk and peril.

Collins shares about how the leadership plays a part in the growth or decline of an organization.

Leadership-Team Dynamics:
On the Way Down versus On the Way UP (Taken from Page 77)

In seven out of the eleven cases, Collins found evidence of externalizing blame during the era of decline. CEOs blame a huge range of factors like the environment, inflation, company hit by strikes, unfair competition and ignorance. While it is true that these factors hit the company hard, the company’s denial of it made it much worst.

Here are the indicators for Stage 3:

1. Amplify the positive and discount the negative.
2. Bet big on new goals without empirical evidence or validation of previous small wins.
3. Erosion of healthy team dynamics. Debate and dialogue is replaced with consensus or dictatorial management.
4. Externalizing blame rather than accepting failures.
5. Obsessive reorganisations within an organisation rather than confronting brutal realities.

Stage 4: Grasping for Salvation


Companies at this stage know that they are in deep trouble and its board of directors look to a new fast moving CEO who will launch a new vision, be the messiah that will save the day. Some look to a dramatic cultural revolution, game changing acquisitions or a number of sliver bullet solutions.

HP exemplified stage 4 behaviour when it launched a conversational $24 billion merger with Compaq. It was a sliver bullet move, hoping that it will be the game changer and rescue them out of their woes.

Behaviours that can exemplify stage 4 or reverse the downward trend

(Taken from page 90)

Every company in Collins’ study indicated late stages of decline that made them grasp for at least one sliver bullet. The stage 4 behaviour worsened the situation these companies are already in. Collins also found out that eight out of the eleven fallen companies in the analysis went for an outside CEO during their era of decline, which usually worsened under saviours from the outside.

Here are the indicators for stage 4:

1. A tendency for sliver bullets or a game changing strategy that will help the organization catapult them out of the decline rapidly.
2. Searching of leaders as saviours, often for charismatic leaders and/or from outside the organization.
3. Introduction of new buzzwords and radical changes. Leaders engage in new slogans, new programs, new culture to align or motivate people.
4. Panic and haste, instead of being calm and disciplined on strategy.
5. Hype before results- leaders tend to sell the future to compensate the lack of current results, initiating a pattern of over promising and under delivering.
6. No sustainability of results. There is a trend of initial positive results but they do not last since there is no cumulative buildup and momentum.
7. Confusion and cynicism of what the company stands for. There is confusion on the ground over what their core values are, the workplace just becomes another place to work, a place to get a paycheck. People become distrustful regarding vision and values as little more than Public Relations.

Stage 5: Capitulation to Irrelevance or Death

Collins remarked that no company that they have studied fell into Stage 5 and each company made their different decisions to reverse its downward slide. By the time a company has moved from stage 1 to 4, those in power can be exhausted, dispirited and eventually abandon hope. Some of the leaders just sell out, in other cases, the organization spirals down to utter insignificance or dies out right.

Zenith Corporation held onto dominant positions in television and radio. For every dollar invested in Zenith at the start of 1950 and held through to 1965 increased in value more than one hundred times, generating cumulative results ten times more than the market. However, over time, Zenith faced problems and threats from the Japanese who were building better television sets at lower cost. They brushed it aside believing that the Japanese were not able to build quality products (stage 1). In addition, leadership succession problems helped to plague the company when a chosen successor died (stage 2).

Zenith also blamed external problems such as the struggling US economy, labour unrest, oil shocks and so forth, rather than confronting its lack of competitiveness (stage 3). Profitability ratios went down to levels not seen in thirty years. The lack of a specific plan and leap into all kinds of opportunities like VCRs, videodiscs, telephones linked to televisions, home security video cameras, cable TV decoders and computers, drove its debt-to-equity ratio to 140 percent (stage 4).

In their grasp for salvation, Zenith stumbled upon a new opportunity that made them great again. They became the number two maker of IBM compatible personal computers. However, even with their success, they were dragged down by their television business, which deteriorated their financial position and cash on hand dropped to five percent of current liabilities. This lead to the selling of Zenith to Bull Corporation.

How do you recover when your organization faces decline?

Collins shares his insights on how you can make a difference by the following methods:

1. Understand how other great companies fall and learn from their mistakes.
2. There is hope that even when companies fall in stage 4, they have proven that they could recover from it. Examples like Nucor, Nordstrom, Disney and IBM fell but bounced back.
3. Never give in and be willing to change tactics. Never give up on your core purpose. Be willing to kill of failed business ideas and even close big operations when they fail to produce results.
4. Never give up on your core values and what you stand up for. Be willing to embrace loss, endure pain but never give up faith that you will prevail.

PS: I have prepared a book summary as a PDF so that you can download it and read it in its entirety. You can download it here.

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How do great leaders inspire action? What are the secrets of communication behind great companies and personalities like Apple and Martin Luther King?

Watch this video to understand why people buy into what you do. Find out what compels people to be drawn into your mission and become great fans.

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People do not leave jobs, they leave their bosses

This is my 5th article to be featured in the Straits Times and it all started from a controversial topic on why people leave their jobs. In my experience working with clients, I noticed that most people often leave their jobs because of their bosses.

Read what are the top reasons why they leave and how to avoid people leaving your organization.

You can read download the article here.

You can read other related articles that were featured in the Straits Times:

Do Motivational Talks Really Work? (Appeared on Straits Times, Recruit- 21 May 2010)

Build Trust With Your Team (Appeared on Straits Times, Recruit- 22 Mar 2010)

Build A Successful Team (Appeared on Straits Times, Recruit- 26 Feb 2010)

Go From Good To Great (Appeared on Straits Times, Recruit- 17 Apr 2009)

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People Resigning from whyatt.com.au

Whenever a person leaves a company, it is estimated to cost their employers about 2 years of that person’s salary. This cost comprises of rehiring, training, loss of contacts that this person might have, employee benefits and etc. During exit interviews, I don’t think you will actually hear the REAL reasons why they leave. After talking to many professionals and including HR practitioners, I have concluded that in most instances, people actually leave their bosses, not their jobs.

I understand that there might be other push/pull factors for a person to leave; however, I will just focus on the reasons to why people leave their bosses (or managers).

1. Poor leadership skills of bosses

One of the main reasons is that their immediate bosses tend to have poor leadership skills. Bosses tend to give them unclear job descriptions, make them work hard without proper recognition/rest, are picky or have poor people skills. Making staff work hard is not the main issue, but not giving them the proper respect and acknowledgment at work is extremely frustrating to their staff. There are some bosses who also tend to be insecure in their role, pushing their staff down, while ensuring that they be acknowledged for every level of success their staff brings.

2. They are micro-managed by their bosses
If a staff is constantly asked by his/her superior on the progress of their work and had them to intervene in the way they do things, they will tend to be frustrated. Bosses intervene mainly because there is a lack of trust in their staff’s quality of work. It is better for bosses to actually manage based on end results rather than day to day monitoring.

3. Bosses with hidden agendas
The lack of trust between staff and boss tend to produce conversations with hidden meanings. When trust is low, people start to guess what their boss actually mean in their conversations. Some bosses speak in meetings to seemingly care for their departments, but often their staff feel that there is a hidden purpose behind every statement. Some people have even commented that their bosses are political and hide behind different meanings in a statement. The way to combat such ill feelings is to be forth-coming, truthful and transparent in the way you relate to staff.

4.    Bosses not delivering promises

Have you heard of the following statements:

“I have plans to promote you in the next few months” or “If you were to achieve these targets, you can expect _____” to only find out that your boss did not fulfill his/her promise?

The thing I am trying to bring across is that sometimes managers don’t deliver on what they say. It only needs to happen only once before people starting doubting everything their boss says. The only way to address this issue is to consistently say what you mean and mean what you say.

Conclusion

Whenever people leave, take a good look at the leaders. In most cases, people leave their bosses, not their jobs. In order to stop great people from leaving, always start with working on the way leaders lead their people.

PS: I would love to hear your comments. Do let me know what you think! If you have other reasons, do share them in the comment link above this article.

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Let’s start with a little analogy of teamwork. Have you observed how a flock of geese fly? They usually fly in V formation and those at the back will usually honk at the one in front. This is to encourage the lead geese who puts in most of the work to overcome wind resistance. Once the leader tires, he moves to the back and another geese moves in to take his place. This form of support helps the entire flock of geese to fly about 71% further than if each geese were to fly on its own. In addition, if a geese were sick or got injured, two of them will slow down to help or protect him.

Isn’t it a wonder how birds know the essentials of teamwork? We humans can do far better with the brain that we’ve got. Explained below are the 10 ways how leaders can inspire team members to consistently give their best for the entire team.

1. Develop trust

Trust is the principle by which the team functions. If the leaders and members have the trust of every person in a team, everyone will be motivated to give their best without inhibitions or fear of being exploited.

2. Involve everybody

When the leaders share information with team members and ask for opinions, a feeling of camaraderie is created and members feel motivated to perform better. Important note: People want their opinions to be heard and know that it considered and acted upon if reasonable.

3. Be a good leader

As a leader, you must be 100 percent clear and confident of what you are doing and what you are getting done from the team. Faith in the leader boosts motivation among the team members. I have been consulted many times by leaders on how to improve their teams and the first place I always look at is the leader. Great Leadership = Great Teams.

4. Give feedback

Everybody needs a feedback on his or her work. Everyone needs to know how they have performed and what they need to do better. Nothing can be more motivating than a constructive feedback. Be sure to start with the positives though.

5. Active Listening

Actively listen to the team members. Listen to their ideas, complaints, grudges, suggestions… anything they may want to share. Just listening to them will give them will help them know that you care and support them.

6. Perform periodic assessments

Periodically assess the progress of the team as a whole and each individual in particular. If any team member is complacent, he or she will wake up and start performing to the best of his or her abilities.

7. Allow team members to give feedback to you

Let the team members give feedback to the leader at regular intervals. This builds mutual respect, mutual trust and confidence. Give them an avenue to tell you what needs to be changed.

8. Hold a weekly interactive session

Let each member of the team have his or her chance to address the team from the front. As a leader, it is always good to show how well the team has performed. If you consistently concentrate on the positives, you will tend to see a more positive behavior in the group.

9. Hold one-on-one meetings

With one-on-one meetings the leaders get a chance to know about personal difficulties of each member. Those who need extra help or extra training should be given so most gladly. Think of the goodwill it will generate.

10. Celebrate success of the team

If you constantly celebrate the successes of your team, both great and small wins, you will find that people will constantly want to share their successes and win even more! Success always breeds more success, and you need to keep the momentum up and running.

Conclusion:
If you want to multiply your efforts and receive exponential results, you definitely need a great team. For every successful person, there is always a successful team behind him/her.

PS: If you have other ideas that you want to share, please leave it down. Click on the “Leave your comment” on the top right hand of this post.

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In my previous blog post, I asked people to define “what is leadership to you?”

There were a lot of great definitions and answers that were contributed and allow me to share with you mine.

Leadership is all about INFLUENCE. It is about who listens to you when you speak and how much influence you have over them. People who have higher influencing ability tend to have a larger group of people following them. If you want to know whether you have strong leadership ability, it is pretty simple. Just look behind and check if anyone is following you.

Most people tend to find leaders by their titles given to them, eg. he’s the group leader or she’s the director of this department. However, I want to caution you that this is the lowest level of leadership. This is because you can be a leader by position, but that does not mean that you will be able to lead people by their hearts. A higher form of leadership exists where people follow you simply because of what you say, stand for and believe in, rather than your position.

So, how do you influence more people? I would like to suggest that there are many ways, but I will list down a few principles:

1.    Move in integrity. When you are integral in your life (meaning, your thoughts, actions and speech are coherent), people will have more faith and trust in you.

2.    Willing to spend time and invest in people. When you develop a person’s life in some area, whether through coaching. mentoring or teaching, you are demonstrating that you are truly interested in their growth.

3.    Establish clear communications. Everyone knows exactly what you mean and will not misinterpret your message. To have less communication breakdown, you will need to spend time with people (point 2).

4.    Lead themselves well. A great leader leads himself or herself well, with or without people around them. They understand that their credibility and consistency is important before people listens to them.

It is in my firm belief that anyone can develop in their leadership ability, since it is an observable behaviour. However, to be a great leader, you must have outstanding character and talent as well. Before you lead others, lead yourself first!

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Everything rises and falls with leadership.

Without great leadership, great organisations can fall.

Before I talk more on leadership, let’s define what is leadership to you?

Please post your comments! I want to hear from you right now!

I will give you my definition in the following days.

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Recently I had the privilege to attend a Resilient Leadership Seminar in Singapore and there were a few great speakers there. Allow me to share with you in humility what I have gleaned from the great minds of three people:

1. Samuel Lock, MD of Clarion Consultants
2. Professor Chow Gan Moog, Head of Department of Materials Science and Engineering, National University of Singapore
3. Boyd Au, Founding Member of Public Listed Singapore Company, Enzer Corporation.

On providing Effective Leadership:

Here are the DOs:
• Do the best and right thing for the organisation and not for self gain.
• Dare to Dream and communicate your vision to others.
• Provide Exemplary Leadership- Integrity, Caring for others and a Willingness to sacrifice. 
• Admit mistakes when I am wrong and sincerely apologise for it.
• Take responsibility when things go wrong and credit others when things go well.

Here are the DON’Ts:
• Lead decisively. Do not lead from behind the line.
• Be Willing to be misunderstood and do not feel sorry for yourself.
• Don’t be a YES man. Disagree reasonably without being disagreeable.

Kenneth’s comments: A leader has to lead from the front. I am actually dismayed when I hear leaders asking more from their employees when they have not lived up the standards they have set. Even simple things like coming on time for work and meetings, if the leader cannot fulfil the requirements, he/she has no right to ask from their staff. Leaders have to be integral in everything they say and do, this is so that their followers will know that they mean what they say and say what they mean.

Another major point highlighted is that a leader should give credit to others when things go well and take responsibility when things fail. This is an act of humility that lifts our team higher that the leader itself; I feel that this is a fine example of servant leadership.

On creating a Strong Vision:

“A leadership has to have a clear mental picture of what is the future state of the organisation. It is a definite goal about what you see in 10 years time… It not only has to be clear, but it has to be consistently articulated and pursued.” Boyd Au

Kenneth’s comments: A compelling vision is constantly important for leaders to rally their troops. It has to be exciting and yet realistic. I personally feel that the leader’s main role is to constantly provide clarity of vision and a strong will to pursue it. Most organisations fail because they have not remained true to the vision that first created the organisation.

My challenge to you: As a leader, what is my organisation’s vision and how is it clearly translated to all levels of the staff? Am I constantly leading from the front and provide exemplary conduct for my staff to follow? 

If you like this article, please subscribe to our blog by getting the Free Report on “7 Transformational Secrets to creating a Dynamic and Cohesive Team”. If you have comments, I would love to hear them. Please post them below.

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