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In this, episode 1065 of this podcast, James talks with Lloyd Thompson from VirtualDOO.com about a common question business owners face: do performance issues indicate a problem with the team, or with the leadership? Who is to blame?
In their discussion, James and Lloyd will look at the need for core values at work, and the importance of defining roles and responsibilities.
They’ll talk about accountability in the workplace, and how to deal with a problem employee.
And they’ll explore the indicators that poor leadership is the cause of a business’s performance woes.
Table of contents:
1. People aren’t mindreaders…
2. Responsibility for the vision
3. The one person who’s accountable
4. Two instances of bad apples
5. When the business owner is unaware
6. Who’s doing the driving?
7. Caution in setting incentives
8. Giving your team a voice
9. What happens when you listen…
10. Matching the aptitude with the role
11. Was it the business owner or the team?
People aren’t mindreaders…
Lloyd recalls a question he encountered at a mastermind event. A business owner asked if the root of his business’s problems was the team’s capabilities or his own management style.
This indicated to Lloyd a degree of self-awareness. The willingness to question one’s own management effectiveness, he said, is a positive sign of a leader looking to improve.
Lloyd then discusses the initial challenges he and his team faced when improving a client’s business operations.
The client’s team, they noticed, worked in silos, resulting in duplicated efforts or neglected tasks due to unclear roles and responsibilities. This led to client dissatisfaction and inconsistent service delivery.
Upon evaluating the situation, Lloyd identified the need for a clear, singular vision. They were working, too, with too many company values. Lloyd had them prune the list from ten to four, to ensure they were memorable and truly representative of the company’s core principles.
This simplification allowed for better alignment between the team’s actions and the company’s goals, fostering a sense of unity and purpose among team members.
Clear roles and responsibilities also work to eliminate operational inefficiencies. By positioning themselves as intermediaries between the founder and the team, Lloyd and his team facilitated clearer communication and coordination, ensuring tasks were appropriately allocated and accountability was established.
The implementation of these changes—clarifying the company’s vision, streamlining its values, and establishing clear roles and responsibilities—resulted in improved consistency in client communication and service delivery.
Lloyd emphasizes that although these improvements require time to implement, the positive impact on team performance and client retention becomes evident relatively quickly.
Responsibility for the vision
James and Lloyd discuss the critical role of the founder in setting the vision and values for their business. They agree that while the vision originates from the founder, involving the team in developing and embodying the values can be beneficial, particularly for established teams.
This collaborative approach ensures that the values are not only reflective of the founder’s vision but are also embraced and lived by the entire team.
The process of defining values can sometimes reveal gaps, such as a lack of initiative, which may not emerge unless the team is engaged in the values’ formation. James reflects on a values exercise conducted in his past where the team’s input was instrumental in shaping the company’s core values, highlighting the importance of stakeholder participation in this process.
Lloyd advocates for creating a “vivid vision” that clearly outlines the future state of the business, offering a detailed picture that encompasses the founder’s aspirations and the values that will guide the company’s journey.
This vivid vision serves as a roadmap, aligning the team’s efforts and fostering a shared sense of purpose and direction.
The one person who’s accountable
Lloyd highlights the crucial difference between responsibility and accountability in business operations, emphasizing that while multiple individuals may be responsible for tasks, accountability should rest with a single person.
This distinction is key to preventing a blame culture and ensuring that there’s a clear point of contact for each function or task within the company.By assigning one person as accountable for a specific area, such as a standard operating procedure (SOP), it ensures that there is ownership and a dedicated individual responsible for the success and continuous improvement of that area.
This approach mitigates the risk of tasks falling through the cracks and promotes a culture of ownership and accountability.
Implementing this strategy of clear accountability transforms the operational dynamics of a business, moving away from potential disorganization towards a more structured and efficient model. This simple yet effective change fosters a sense of responsibility among team members, encouraging them to take initiative and ensure the quality and success of their assigned tasks.
Two instances of bad apples
Lloyd shares two instances where lack of accountability had detrimental effects on business operations.
In the first case, the leader of a performance marketing team consistently blamed his team for poor performance. After being held accountable, the leader’s departure led to an immediate improvement in team performance, illustrating the negative impact of blame culture and the importance of accountability at the leadership level.
The second scenario involved a talented but problematic designer in an e-commerce business, whose negative attitude and behavior were toxic to the team environment. Despite the designer’s skills, his behavior demoralized other team members and threatened the company’s culture. The decision to measure and document his infractions ultimately led to his dismissal. This showed the necessity of addressing toxic individuals for the overall health of the team.
Lloyd and James discuss the phenomenon known as “Star syndrome,” where individuals believe they are too important to be held accountable. They stress that the team’s well-being should always be considered before the contributions of any single individual.
Failure to act against such individuals can lead to a loss of respect and resentment among the team. This underscores the importance of leadership taking decisive action to maintain team integrity.
When the business owner is unaware
James raises a concern about dealing with toxic individuals in the workplace, especially when the business owner might not be aware of their behavior. Lloyd suggests regular structured and unstructured catch-ups with the team as a method to uncover issues, highlighting the importance of building rapport and trust to facilitate open communication.
This allows operators to gather insights into team dynamics and identify any underlying issues that may not be immediately apparent.
James points out the value of tapping into the “grapevine” or informal communication channels within the organization to uncover issues like underperformance or misconduct that might not be reported through formal channels. Being attuned to these informal sources, he says, can reveal critical information about team well-being and operational integrity. This, of course, requires leaders to be genuinely connected and trusted by their team.
Lloyd and James underline the importance of trust and open communication as foundational elements of a healthy organizational culture. They stress that encouraging team members to voice concerns and observations contributes to the overall health and success of the business, aligning with core values such as communication.
Who’s doing the driving?
Lloyd introduces the concept of “driving” the business, pointing to the necessity of leadership in maintaining the operational rhythms and ensuring that all parts of the business are functioning cohesively. He points out that without someone actively managing these aspects, businesses risk falling into disarray.
Lloyd offers as example a coaching business struggling with leadership bandwidth due to the owner’s extensive commitments. The solution Lloyd presents is to install an operator to act as the central point of communication and coordination between the business owner and the team. This role is crucial in managing workloads, facilitating communication, and preventing issues such as culture rot and operational inefficiencies. Ultimately, it allows the business to function more smoothly and efficiently.
The significant benefits of having a dedicated operator include reduced overtime expenses and increased bandwidth for the business owner to focus on core activities that drive revenue and growth.
Lloyd underscores the emotional ROI for the owner, who can now concentrate on strategic areas without being bogged down by daily operational challenges.
Caution in setting incentives
James and Lloyd look at the unintended consequences of poorly designed reward systems.
Lloyd references the British Empire’s cobra reward program in colonial India, where money was offered for anyone who could present a dead cobra. This was subverted when people actually began raising cobras in order to provide dead ones for reward.
The story underlines the critical need to anticipate the potential for people to game reward systems to their advantage.
James reflects on his own business practices, emphasizing a philosophy of fair compensation for work done and cautioning against the potential manipulations connected with overtime and bonus schemes.
James has known salespeople to delay deals in order to benefit from volume bonuses, showing how incentive schemes can lead to undesirable behaviors if not carefully structured.
Lloyd expands on the necessity of aligning KPIs with desired behaviors, stressing that what gets measured gets done, but also that the wrong metrics can encourage the wrong actions. Both he and James advocate for simplicity and clarity in setting incentives and KPIs, to ensure they drive the intended outcomes without unintended negative consequences.
Giving your team a voice
Lloyd emphasizes the importance of listening to your team to identify issues and improvements within the business. By engaging the team in discussions about what works well and what doesn’t, business owners can uncover valuable insights that lead to meaningful changes, enhancing team engagement and motivation.
There’s power, too, in aligning team members’ personal interests with their work. This alignment not only boosts productivity and enjoyment but also brings out the best in each team member’s skills and contributions. Lloyd, for instance, discovered a team member’s interest in video editing, which lead to a marked improvement in Lloyd’s content quality.
Lloyd points out the potential downside of not listening to the team. He gives the example of a business owner who paid his team well but failed to address their concerns or value their input. This approach led to dissatisfaction and turnover, showing it takes more than just financial incentives to retain and satisfy employees.
Lloyd suggests as one solution placing an operator between the founder and the team to act as a mediator, filtering out noise and prioritizing what’s important. This strategy can significantly improve team retention and satisfaction by addressing the root causes of discontent and ensuring team members feel heard and valued.
What happens when you listen…
James recounts his experience of taking over a struggling car dealership. By encouraging his new team to voice their concerns and suggestions, he identified and resolved operational issues at the dealership, such as inadequate furniture and poor phone reception, which immediately improved the team’s morale and productivity.
This not only won the team’s trust but also laid the foundation for significant improvements in the dealership’s performance. Over two years, James’s strategy of valuing team input and implementing their ideas led to a remarkable turnaround, with the dealership rising from last to first in customer satisfaction scores within the state.
This success story illustrates the importance of giving team members a voice and acting on their feedback, showing, too, that the most effective solutions often come from within the team itself.
Lloyd backs this up with his own experience, noting how simple inquiries about a team’s interests and capabilities can uncover hidden potential and solutions within the existing workforce.
By actively listening and engaging with team members, leaders can discover not only immediate operational improvements but also long-term strategic opportunities that align with employees’ passions and skills.
Matching the aptitude with the role
James discusses the evolution of roles within his team, where adapting to new business models and leveraging team members’ interests and willingness to learn have led to significant shifts in their responsibilities. He emphasizes the importance of utilizing the skills and equipment available, much like mastering the use of a four-wheel drive on the beach. It points to the value of flexibility and adaptability in team roles and responsibilities.
Lloyd warns again against the risks of not listening to team members, such as losing valuable employees or causing “quiet quitting,” where disengaged team members simply perform their duties without any real investment in their work. He advocates for the importance of aligning team members’ career aspirations with the business’s direction, suggesting that engagement and investment come from listening to and acting upon team feedback.
Lloyd suggests when hiring that alignment with the company’s values and long-term vision is more crucial than immediate skill set. This approach allows for growth and adaptation as the business evolves, ensuring team members remain valuable even as their roles change.
James reflects on the dynamic nature of business and speaks again of the constant evolution of roles within his team. He attributes their adaptability to a solid foundation in fundamental skills and values rather than rigid job descriptions.
James and Lloyd agree that readiness for change, especially with the advent of technologies like AI, is essential for future success, emphasizing the need for flexibility and continuous learning in a rapidly evolving business landscape.
Was it the business owner or the team?
Referring back to Lloyd’s story at the start of their chat, James asks, who was at fault – the business owner, or the team?
Lloyd believes the business owner was the primary source of issues within the business. However, as before, he acknowledges the owner’s positive introspection and willingness to question his leadership and management approach.
Lloyd suggests that providing the team with clear direction and aligning their efforts could be the solution, rather than starting anew with a different team.
James draws parallels with his experience of overhauling a failing car dealership, where he had to replace nearly all team members due to their inability to perform at the desired level. He emphasizes that while such drastic changes are sometimes necessary, the initial step should always be self-reflection by the business owner to improve leadership skills. This approach, along with implementing clear vision, values, roles, and accountability, can transform an underperforming team.
Lloyd offers help to business owners facing similar challenges. Interested listeners can contact him via email: [email protected].
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