Cheloha Consulting Group
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Leading & Managing your Business: Dealing with People
Randall S. Cheloha, Ph.D.
September 23, 2011
Plumbing, Heating, and Cooling Contractors Association (PHCC)
Minneapolis, MN
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Introduction & Background
Presentation Goals
Introduction/Background
I. Understanding Human Nature
II. Leading a Business
III. Managing People
IV. Managing Yourself
V. Succession Planning
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Introduction
My Goals: Share insights, learning, ‘truth’ accumulated over time in working in the trenches of organizations; not academic, not theoretical; but practical and applied
Education Session: Teach, share, answer questions
My hope for you: ‘Finding the Pony’
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Maps/Models to Plot your Course
The map is not the terrain
You need to know where you are and where you are going
Circumnavigate/Triangulate: What makes sense?
How manage/lead people. It’s very conceptual, abstract, and amorphous? The nature of CONSTRUCTS…– Human Nature– Leadership– Personality– Company Culture– Brain Function – Emotion
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Points to Remember
Human nature remains the same
Have a theory to understand people
Brain physiology: Reaction time of amygdala (50 milliseconds); via cortex (500 milliseconds)
Most reactions/perceptions/insights are hard-wired by age 5
We are all MASTERS of Projection
Nobody is perfect
Create a work environment where Progress on Meaningful Work can Occur
Chances are, as a boss, you get in the way
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Fast (1) & Slow (2) Brain Circuits: Our Reactions
AMGYDALA
HippocampusThalamus
Cerebral Cortex
The Event, The Trigger
Reaction
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I. Understanding Human Nature
Human nature remains the same over time (HBO: TheTudors, Rome)
Working Theory of Personality (and leadership style flows from personality)
Relationship of values, attitudes, and behavior
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A Framework for Human Behavior and Personality
Assessing Capability
1) Values (drivers)
2) Strengths
3) Weaknesses/Development Needs/Blind spots
4) Multiplier Effect: Work Ethic
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Making the Right Hiring Decisions
Draw on a Quality Feeder System: Local Schools, Tech Schools, Personal Network, Apprenticeships
Screening: Multiple Methods/Multiple People– Interviews -- Tests– Partner/Apprentice -- Probation (6 months)
Provide Immediate Feedback
Frequent Performance Reviews
Right hiring decisions saves 90-95% of management work
Productive people can be 200-300% more productive
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Mathematical Equation for Assessing Human Capability
((V + S – (DN))) * WE = CAPABILITY
Key:V-VALUESS-StrengthsDN-Development Needs/Weakness/BlindspotWE-Work Ethic
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VALUES: What do you want from Work?
1) Aesthetics (Quality control)
2) Affiliation
3) Altruistic
4) Commerce ($$)
5) Hedonism (Salesmen)
6) Power (B of A)
7) Recognition (Strokes)
8) Science (Engineer/Technician/Craftsman)
9) Security (Loyal, hierarchy-Utility)
10)Tradition (Loyal, hierarcy-Utility)
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STRENGTHS (What you bring to the party!)
Adjustment/Emotional Stability (the governor)
Ambition/Drive (work ethic)
Sociability
Interpersonal Sensitivity – Insight? Read people? Avoid confrontation?
Prudence/Judgment: – Mistakes lead to experience; the experience that accumulates
when we learn from our mistakes produces judgment
Inquisitive
Learning Approach
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Development Needs/Weaknesses/Blind-Spots (lo scores are STRENGTHS)
1) Excitable—ups and down in moods; emotional; expressive (lo=EQ)
2) Cautious--risk averse, avoid making decisions (lo=Decisive)
3) Skeptical—mistrustful, vindictive (lo=builds trust with others)
4) Reserved—introverted; poor communicator; insensitive to morale (lo=communicator)
5) Leisurely--passive/aggressive, mean (lo=responsive)
6) Bold-narcissistic feelings of entitlement (lo=modesty)
7) Mischievous-careless about commitment, loose ‘honesty’ (lo=integrity)
8) Colorful–reactive, manage by crises, center of attention (lo=good judgment)
9) Diligent—over controlling micro-manager (lo=delegate, empower)
10) Dutiful-eager to please boss, ‘brown nose’ (lo=provide support, independent)
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Mathematical Equation for Assessing Human Capability
((V + S – (DN))) * WE = CAPABILITY
Key:V-VALUESS-StrengthsDN-Development Needs/Weakness/BlindspotWE-Work Ethic
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Understanding Types
Types: Salesmen? Craftsman Plumber? Loyal/Dedicated employee?
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Salesman
Values– Hedonism, Commerce, Recognition
Strengths (time in the Marriott lobby)– Ambition– Sociability– Interpersonal Sensitivity
Development Needs (Quantity vs. Quality)– Bold– Mischievous– Colorful– Diligent (lo)
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Craftsman Plumber
Values-Aesthetics, Science, Security, Tradition
Strengths:– Emotional Stability– Prudence/Judgment (rigid, don’t listen, defensive; detailed)
Development Needs:– Skeptical (challenge authority)– Reserved– Diligent (hard working; too a fault)
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Loyal Employee/Does what you tell him to do!
Values: Affiliation, Altruism, Recognition, Security, Tradition
Strengths:– Emotional Stability?– Interpersonal Sensitivity– Prudence (it looks like it)
Development Needs:– Cautious– Leisurely/Passive-Aggressive– Dutiful
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Relationship of Behavior, Attitudes, Values
Iceberg Analogy
VALUES
Attitudes
Behavior: What’s Visible
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Entrepreneurs/Owners/Founders: What Makes You Special? (re. Economist Joseph Schumpeter)
The Rare Alchemy of the Driven Entrepreneur (WSJ, 8.26.11)
Characteristics:– Have the will to found a private kingdom, usually (although not
necessarily) a dynasty.- Henry Ford, Bill Gates, Warren Buffet, Steve Jobs, You- Example of business cards: Edison, Ford, Carnegie,…
– Will to conquer; the impulse to fight; to prove oneself superior to others; to succeed for the sake of succeeding (not for the fruits of $$)- An achiever and competitor
– Joy of creating; getting things done; exercising one’s own energy and ingenuity- Drive, perfectionist, over-control
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WHY Owners/Entrepreneurs may not be good BOSSES; their Personality Characteristics...(succession)
Independent
Determined & focused (stubborn, rigid)
Assume other people are the same (they’re not)
Over the top drive/strong work ethic
Willing to take a risk (most people aren’t!!)
Assume other’s can manage themselves (many require management)
Overly hands-on; need to know; detail; perfectionist
Over control (micro-manager)
Don’t need many ‘strokes’ or recognition
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IIa. Leading a Business (Job Description)
Boss, Numero Uno, El Jefe’: Represent the business (CCBW), Chief Cook & Bottle Washer)
Finance the business and pay the bills
Staff the business; hiring and firing
Satisfy customers and maintain high quality standards
Marketing/Business Development– print, fliers, mailings, networking, internet, ‘word of mouth’– Build your brand—What makes you Special?; Always ask
yourself: ‘where do I add value?’ (JED)
Make money!! (operate profitably)
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Maturing as a Leader: the Process
What’s my job/role? Maybe different than what you are best at, or what you want to do, or even what you think you should do…
Continual learning from experience/mistakes/pain
What’s my real job? (Slide IIb)
Do an Objective Analyses of your strengths and weaknesses
How do I fill the ‘gaps’? Delegation, new hires…– Current person being coached, the engineer—what if
promoted…
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IIb. Leading a Business: Your Real Job
Set Goals/Provide Direction (smaller vs. larger business)
Communicate (you are the only one who has this unique perspective)
Building Relationships (CORE) – Leadership by example is redundant– Setting the right tone for your company culture (the way we do
things around here)- Telling, Policy, and Rules- Showing/Modeling- Partnering-working together side by side (raising children;
Randy and trimming shrubs)
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IIb. Leading a Business: Your Real Job
Kaiser Permanente Health (SFO) study:
– About 24% of employees (study of 39,000) reported mild to severe depression
– Sick days and depression cost US $44 billion year
– Health insurance is cheaper if employees take less sick days and are less likely to visit their primary care physician
What Can you Do? Happier Workers are More Productive
– Gallup estimates cost of employee disengaement-$300 billion
– Study of 238 workers, 12,000 diary entries
– 33% of entries—unhappy, unmotivated, or both
Manager/Boss’s Job: How do you make ‘People happy’?
` - Remove obstacles; Provide Support; Provide Autonomy
– Create opportunity to ‘Make Progress Doing Meaningful Work’
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III. Managing People
Providing Respect and Positive Affirmation (Golden Rule--treat your neighbor as yourself; give the benefit of the doubt; see the glass as ½ full; assume the best (Rosenthal effect)
Percent of ‘Bad Bosses’??? (Hogan)
Motivating Others – Motivation comes from the inside– But, The Boss Creates the Work Environment
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Making the Right Hiring Decisions
Quality Feeder System: Local High Schools, Local Tech Schools, Apprenticeships
Screening: Multiple Methods/Multiple People– Interviews -- Tests– Partner/Apprentice -- Probation (6 months)
Immediate Feedback
Frequent Performance Reviews
Right hiring decisions saves 90-95% of management work
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Performance Reviews: Providing Feedback and Coaching
Principles of Providing Good Feedback– The closer in time to the good or bad event, the better– Direct, focused, and tactful– Supervisors focus most on recent events (vs. Annual Review) – Review again during Annual Review; no surprises– Ratio of 10:1 positive to negative – Negative feedback engenders Defensiveness and emotional
“shutdown”- People don’t hear what you say after 1st negative comment,
so…- Keep it brief—make your point- Check for understanding then—and then again within next 5
days
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How Much can People Change?
NOT MUCH…Most hard-wiring in place by age 5; but we can learn/change and adapt
In talented motivated and bright people a LITTLE goes a long way
Frequently less ‘change’ and more re-directing their focus/energies
Sometimes it is increased Self-Awareness
Analogy: Taut wire guide on young willow tree
Where do Managers go wrong? Assuming things will get better if they do nothing (procrastination; avoiding conflict…)
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Formula for Employee Coaching & Change
Awarenessand
Acceptance50%
SkillBuilding
25%
Energy25%
1
23
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Realities of Coaching
Needs to be positive/trusting alignment between coach and coachee for coaching to work (interests aligned); that’s why boss/subordinate coaching is rarely effective.
‘Boundaries’
Most emotional memories are laid down by age 5 (Doyles); if there’s a threat, most people naturally react with emotion (amygdala)
Coaching: combine Challenge & Support
People can only change a little; but that little has a big impact on behavior (willow tree and guide wire)
Build off strengths; acknowledge and ‘fence off’ weaknesses– Counter-intuitively: people change most in the area of their
strengths
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When is it Time to Cut the Cord?
Most frequently expressed regret of managers/supervisors—I waited too long, I was optimistic that things would change, I thought it would work itself out…– To be fair, apply the three pronged Readiness/Capability test:
Knowledge—know what to do Skill—know how to do it Attitude—want to do it
Use an outside resource (another senior employee?)
Otherwise, you do yourself a favor by releasing the individual early so they can get on with their lives/career (People will thank you)
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IV. Managing Yourself
Most common BOSS/MANAGER blind spots– Not listening– Criticize not praise – Perfectionism – Over Control; Not Delegate
Managing your Emotions, Frustration, and Temper– The Brain, Functions, and Relationships
Taking Care of Yourself– Stress– Managing Stress (exercise vs. ‘oral’ satisfaction)– Depression, ‘the blues’
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Symptoms of Depression (National Institute of Health)
Persistent sad, anxious, or ‘empty’ mood
Feelings of hopelessness, pessimism
Feelings of guilt, worthlessness, helplessness
Loss of interest or pleasure in hobbies and activities that were once enjoyable
Decreased energy, fatigue, being ‘slowed down’
Difficulty concentrating, remembering, making decisions
Trouble sleeping, early morning awakening, oversleeping
Change in appetite or weight change (up or down)
Thoughts of death, suicide, ‘suicidal ideation’
Irritability, easily frustrated
Persistent physical symptoms, e.g., headaches, digestion, chronic pain
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Blind Spots; Most Common Areas for Coaching
Not Listening (can’t receive feedback about yourself; defensive)
Criticize not Praise (Boss finding person’s weak point)
Perfectionism (setting a good example; do the job right; partner/model)
Over Control/Lack of Delegation (Why?)– 1. An ego as big as all of Montana; Nobody can do it as well…– 2. Control needs; I like to be in control and on top of things– 3. Subordinates are weak; now---you have a selection/staffing
problem
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Managing your Emotions, Frustration, Temper
Amygdala—Seat of Emotion; Sensory Integration
Hippocampus, Thalamus—Emotional Go-Betweens; Way Stations
Frontal Cortex—Control/Inhibit Emotion
Fast/Slow Circuits in Reacting
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Fast (1) & Slow (2) Brain Circuits: Our Reactions
AMGYDALA
HippocampusThalamus
Cerebral Cortex
The Event, The Trigger
Reaction
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Model: Understanding Brain Structure, Brain Functions, and Behaviour
Evolution of the Brain (A. Koestler, 1967)
– ‘Automatic Pilot’ Brain (Rat)
– Emotional Brain (Smell)
– Executive Brain (Judgment)
Big Changes in Psychological and Psychiatric Understanding in Last 15 Years:
– Joseph LeDoux-New York Univ., ‘96
- Better Understanding of Brain Influence on Behavior
- Better Understanding of Neuro-transmitters and how they work
- Therapy: Best with both Relationships & Rx (scripts)
- Louis Cozolino (Neuroscience of Psychotherapy)
- David Siegel (Mindsight)
- John Arden (Rewire Your Brain)
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The Ghost in the Machine: The Evolution
AUTOMATIC PILOT BRAIN
Emotional Brain
EXECUTIVE BRAIN
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Fast (1) & Slow (2) Brain Circuits: Reaction to Stimuli
AMGYDALA
HippocampusThalamus
Cerebral Cortex
STIMULI
S2
S2
S2
S2S1
Reaction
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Functions of the Brain
Automatic Pilot Brain (Brain Stem)– Autonomic– Breathing– Circulation– Consciousness
Emotional Brain (Amygdala, Hippocampus, Cingulate Gyrus)– Emotion– Integration of Range of Brain Functions– Senses– Attention
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Functions of the Brain (Continued)
Executive Brain (Frontal Cortex); The Seat of Reason– Self-Control; Control– Inhibition of Impulses– Thinking; Complex Cognition– Judgment & Decision Making– Context/Subtleties
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The Ghost in the Machine: The Evolution
‘AUTOMATIC PILOT’ BRAIN
Emotional Brain•Senses: Light, Sound, Balance; Hearing; Touch
•Disruptive: Computer Screen; texts; Multi-Tasking
EXECUTIVE BRAIN•Evolves until 30’s
•Control/Inhibition/Focus
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Fast & Slow Brain Circuits (Reaction to Stimuli)
STIMULI
S2 S2
S2S1
Reaction 2 =Think, Consider, Context, Address Subtlety
AMGYDALA
HippocampusThalamus
Cerebral Cortex
S2
Reaction 1= Anger, Lose Temper, or ‘Meltdown’
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Bobby Knight (Retired and Ex-Coach, Indiana U., Texas Tech Basketball)
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Va. Succession Planning for the Next Generation
88% believe the same family or families will control business in 5 years
Familiar Family Businesses:– Ford Motor Co. --Interface (Atlanta)– McCormick Spice Co. --SC Johnson (Racine, WI)
Only 30% of family businesses survive into 2nd generation– Clifton’s (West Coast-Finance)– Acquisition (VIC)
Only 12% are viable into 3rd generation
Succession planning is a process (like a snowflake-each unique)
Do you have a plan? Do you have a process?
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Evolutionary Stages of Companies (Adizes, 1990)
Self-Employed
‘Family’—Succession can be an issue down the road; ‘letting go’
Professional manager
Mature/Bureaucratic (dying!)
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Vb. Succession Planning for Next Generation
The long runway is better than the short runway; start planning when in early (40’s, 50’s)
Succession planning is very, very easy to put off:– Concerns about our own mortality; you block it out– Brings out denied/covered-up family issues– My work defines me, what will I do if it’s gone? Impact on my
marriage?– Control needs; can I let go?
Will your successor be an immediate family member– Capabilities and Fit– Drive and Motivation
Sell to Outsider (How value?)
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Summary: IMPLICATIONS FOR YOU AND YOUR BUSINESS
Understand People and Human Nature– Build Relationships (leadership by example is redundant)– Understand strengths and weaknesses of your employees (model)
Lead: Provide Direction; Communicate; Create a Positive Work Environment
Provide & Receive Feedback– Listen and be open– Don’t be defensive– Manage your emotions
Make Progress on Meaningful Work
Manage Yourself: Deal with your Emotions, Frustration, & Temper– Stress management– Depression– Over eating/drinking– Exercise to relieve stress and improve mood
Plan for succession
50©Cheloha Consulting Group, 2011
Cheloha Consulting Group
Wynnewood, PA
Randall S. Cheloha, Ph.D.
610-896-9494
610-755-7879 (mobile)