Avoiding Layoffs: Recession-Proofing Your Business
Most of your competitors are shifting their mindset on how to weather a recession. But the...
“How do I tell our CEO that they are the problem?”
As a member of the C-Suite and now a trusted advisor to C-Suites, this has certainly been the case several times. We can all acknowledge that sometimes even the sharpest executives don’t realize that they are actually the problem. And it may seem like the obvious explanation. Though I’m guessing it isn’t.
Far more often, the CEO is not the problem. But they may be too close to the problem.
Wayforward Associates gets brought into a company for one of two reasons.
The leadership team knows there is a problem but is having trouble identifying and understanding it. Or,
They understand the problem, but their efforts to execute on correcting it haven’t been effective.
In both cases, our task is to quickly develop a deep understanding of the organization’s current state and the root causes of the issues at play. When the business strategy is solid, and the people are eager to succeed, this means we’ve narrowed down our edict to two areas:
You may be thinking that this is an oversimplification of a complex business environment. We’ve found it is not. When the issue is around the company’s ability to successfully execute solutions to internal challenges, the culprit is almost always what’s referred to as a culture of indecision.
The first step in gaining traction for organizational change or new initiatives is to achieve buy-in.
When we begin an engagement, the first order of business is to win the buy-in of employees and middle management by communicating an accurate understanding of their experience: the current state of things in the organization. And by clearly articulating where they want to be. We are able to obtain this currency for buy-in through our employee experience assessments.
Failure to buy into organizational decisions is born out of an absence of dialogue. It takes the form of active resistance – or its more passive cousin, indifference. Ram Charan describes for leaders the four components that are required for dialogue to create buy-in for a decision from those necessary to implement it:
A swift, methodical way to check each of the four areas above is to conduct an employee experience assessment. Applied correctly, such an assessment is invariably accompanied by thorough recommendations for the course of action which will eliminate the root causes of existing impediments to success (those impediments being the challenge(s) referred to at the beginning of this article). A strong, objective understanding of the issue and clarity of action planning will result in a clear path for implementation.
(For more on this topic, check out our earlier article, Why Engagement Surveys Flop...and What to Use Instead.)
The best-kept secret of a truly effective implementer is that during the course of the implementation, they are simultaneously conducting a second assessment. This time around, the organization’s ability to mobilize and execute the plan.
Achieving buy-in is the foundation of action. But where the buy-in is the fertile ground for change, it cannot carry it out. Follow-through is the actual mechanism for change – and the second critical piece of the equation. And nothing kills follow-through like indecision.
The leadership team has blessed an action plan. They have given the direction to the organization to carry it out. There is a clear, measurable goal. And a road map to form the current state of things to that future state goal. The appropriate stakeholders have agreed to the plan and are enthusiastic about it.
So, why do companies so often begin to flounder at this point? We’ve found it to be the dynamics of the management team’s styles, roles, responsibilities, trust in one another, and general clarity around how their own role fits into the whole. In other words, what seat they are in on the bus makes up a company’s “Management Culture,” or perhaps more aptly, their “Management Practices.”
This particular aspect of a company’s ability to execute gained widespread interest in 2013 when the Harvard Business School released a case study on the subject of middle management’s effects on the organization. The case study was based heavily on Google’s experience removing all management roles from its ranks, then later re-instituting managers for a very particular set of responsibilities labeled “Project Oxygen.”
Project Oxygen was an internal initiative conducted by Google in 2008 and studied under rigorous metrics. It proved that teams with managers who regularly practiced a certain set of behaviors had lower turnover rates than the rest of the organization and dramatically improved performance outcomes. The study identified that the most highly correlated behavior was that of a senior leader whose primary responsibility revolved around coaching.
If you’re like most executives outside of Silicon Valley, you’re skeptical about betting the farm on the experiences of seemingly unassailable titans like Alphabet (Google), Amazon, or Facebook (now Meta). More digging on the topic will reveal that despite HBR’s acclaim around their unpacking of the direct impact that managerial practices can objectively have on an organization, it isn’t a new revelation. A 1999 study conducted by Jeffrey Pfeffer and John Veiga, distinguished professors of Organizational Behavior at Stanford University, concluded that Fortune 500 firms that were able to improve their management practices by just one standard deviation above the mean raised their market valuation by $18,000 per employee.
We’ve got our hunches. And there are five of them. Born out of the compiled experiences where our client engagements see leadership teams struggle with shifting themselves into gear as a cohesive unit:
Assuming that buy-in (for the approach they’d like to take to address their internal issues) has been established across the organization, then implementation of that action plan is the next step.
But given how many otherwise impressive and respected leadership groups we see grappling unsuccessfully with this particular transition, we believed a guide to navigate these five points would be helpful.
Driving change within a leadership team requires outside influence and facilitation. And yet, what kind of outside help (and exactly who can really provide it) is astoundingly difficult to pin down.
This doesn’t need much explanation. There are enough bad actors in the consulting industry, and the closely aligned software solution sales landscape, that it’s become hard to know which way is up. In fact, just being associated with the term “consultant” makes us feel icky. Prior to founding Wayforward, our experiences with the Top Ten consulting firms weren’t the greatest either. We share one of the most common frustrations – they’ll tell you what the problem is, but they won’t tell you how to fix it. In fact, we were so keen on distancing ourselves from this sort of client-side experience that we put it into a lot of our brand copy. We point out that we disdain the traditional model of consulting.
Charlatans might be an unfair description. But the experience is common enough that many leadership teams react with skepticism at the thought of an outsider being able to help them get better. Especially an outsider who has never been in their shoes.
Globally recognized problem-solving expert Thomas Wedell-Wedellsborg notes in his 2013 book, “Innovation as Usual,” that many innovative teams searching for solutions to problems fail to consider if they are solving the right problem.
The mark of a strong leader is admitting what they don’t know. Some of the most intrinsically rewarding engagements we’ve worked on began with an executive saying, “I know enough to know I don’t have the expertise to attack this problem. And I don’t have it on my team either.”
Organizational behavior systems are very infrequently the expertise of a chief executive. And even in organizations with a few – or even several hundred – employees, that expertise isn’t often present in the HR seat either. Objectively articulating why executing on decisions flounders, even after the leadership team has obtained the buy-in of their workforce, is a niche skill set.
If your organization is grappling with less-than-effective implementations, perhaps something on the following list will sound familiar. Specifically, articulating problems is one of the most valuable steps to overcoming them. To borrow a phrase from a former COO peer of mine: “Our problems always have names.”
If you’ve been a member of a leadership team with faulty dynamics for any significant length of time, I’m hoping you had an “Aha!” moment in reading the phrase false decisions – because it’s one of the most common mistakes well-intentioned and trusting leaders can make in their peer group. In fact, it tends to be present, especially when a leadership team has strong relationships with one another.
False decisions are decisions that get undone by unvoiced individual realities and inaction. The decision itself is undermined, often unintentionally, by the very leaders who support it. This happens because of subtle behavioral norms in the way that leaders, and sometimes their direct reports, connect and engage when reaching a decision.
These simple, conversational misfires lead to inaction because our interactions as a leadership team – and our transference of expectations to our direct reports – often lack specificity, prioritization, and realism.
This is not to suggest that each and every decision to act be burdened with an exhaustive level of detail or scrutiny. But instead, we must be more deliberate with the structure of our discussions. For example, it is too often a faux pas to pipe up at the end of a meeting and say, “What decision did we make today?” or “Can you tell us exactly what you understood from today’s meeting?” or “What specific action will you be taking coming out of this meeting?” It can feel uncomfortable, if not downright disrespectful, to raise questions like this among an intelligent, competent, hard-working group at the helm of the company.
On an executive team that makes false decisions, one might come off as adversarial or obtuse for injecting such rigid questions into an otherwise smooth conversation. But not engaging in rituals like these at the end of leadership meetings allows those unspoken factors – small cracks of misunderstanding between leaders – to become impassable (and expensive) crevasses during implementation.
The personal interactions between a group of leaders are inseparable from the group dynamics at play between them. Their ability to execute the decisions made by the group is only as good as the weakest relationship in the room. This decision-action dependency is compounded by the subsequent interactions between those leaders and their team of direct reports.
Unabashed, objective debate that is not taken personally is a necessary foundational layer. It enables the strong commitment required to produce clarity and closure for an entire team around a decision. If any member of the leadership team harbors a fear of conflict or misstepping in front of their peers, it will produce an unspoken lack of commitment to decisions.
Without that commitment, the practice of avoiding accountability is likely to spring up within the outcomes. Discussion will begin to focus less on what was accomplished and instead center on empty banalities and cliches like workload and prioritization.
This can invite a toxic positivity that further stokes fears around bringing up the disparities between what was decided and what is actually happening.
There is no shortage of books or studies on the importance of vulnerability in leadership. Humanizing senior leadership roles drives improvement in employee perceptions of their trustworthiness and competence. Yet, it’s not out on the front lines of the organization where most leaders struggle with vulnerability – it’s alongside their peers.
Within leadership teams where there is no clear hierarchy, the pressure to “stack up” well alongside one’s peers can be crushing. This is especially common in three situations:
All of these situations often create leaders more occupied with the immediate optics of what they do and say than the long-term outcomes for the business. This situation spills down through the organization in a number of ways.
Managers that fail to implement leadership decisions successfully because of their own faults are vastly outnumbered by managers who are operating within a management culture set by their senior leadership. A senior leader seeking to understand why a middle manager behaves in a particular way might quickly find the cause by doing some introspection on how their own behaviors and tendencies may have created an example.
This especially applies to the way that they interact with their peers within leadership. In every employee experience assessment, we begin by interviewing the leadership team. When a dysfunctional behavior or frustrating situation within that team is mentioned, we ask to what extent front-line employees and middle managers are aware of that issue. In nearly every circumstance, the senior leadership indicates that it’s not something that is general knowledge throughout the organization. And in nearly every circumstance, it turns out that it is.
Excuse the French, but the adage of assuming making an ‘ass’ of ‘u’ and ‘me’ is truer nowhere more than in a company making the leap from plan to execution. Do your assumptions go unchallenged at the point of decision-making? You might have just made a false decision.
Those pointed questions at the end of the leadership meeting are intended to eliminate assumptions. Not only of each other’s actions – but of our own. Even in a meeting where there is no underlying dysfunction gnawing away at our decisions, a well-intentioned executive’s most deadly adversary is often simply the clock. A few minutes and a few competing thoughts later, an executive without a very specific (and hopefully written down) set of actions will quickly lose track of them.
Information sharing can be tremendously problematic when a company culture discourages it. Even if that isn’t the case, a poor understanding of the organization’s current state is often equally as dangerous.
High-growth organizations and those with innovative cultures are, by their nature, comfortable with rapid paces of change. This competitive advantage can become an internal threat when the organization does a poor job of objectively mapping their current state and systems, and does not maintain an org chart focused on accountability rather than hierarchy. Not having a reliable map of how things function within the organization is a surefire way to get a lot of people lost very quickly.
This point about mapping the current state is perhaps the most important piece of this article. And it’s probably the most important document that a company can create for itself when it is focused on growth or significant improvement and change.
The exercise can seem tedious or perhaps daunting to an inexperienced team. They’re often thinking of monstrous, 100-page documents that fail to sync up with the big picture and overall company strategy, and are difficult to communicate. But done correctly, mapping your current state is a realistic exercise that is critical to a well-executed plan making your vision a reality.
What is the function of disagreement within the organization? Critique and questioning? Are these viewed negatively or positively by the leadership team?
These conflicts should be viewed as important tools – opportunities, even – by which the organization learns and grows. That does not mean we turn every decision or initiative into an opportunity to lambast a leader or peer. But at the very least, we should view reasonable questions and critical analyses as helpful and not hurtful.
If your senior leadership team isn’t excited and energized to jump into critical questions when they’re raised, you might be doing something wrong. In the words of the veritable CEO and entrepreneur Derek Sivers, “If it isn’t a hell yes, it’s a no.”
Social operating mechanisms are simply the structure within which all other interaction takes place. Such as the manner in which leadership meetings are conducted, or the way that initiatives are reviewed. Are follow-through and honest feedback modeled and encouraged?
Products and operating mechanisms are easily measured and even copied. It’s these functional pieces of your day-to-day progress that must be attended to carefully and deliberately. It would be ridiculous for a manufacturing company to suddenly decide that it doesn’t need its QA process any longer. And criminal negligence for a hospital to conclude it will disregard infection prevention practices. Yet as leadership teams, we routinely, albeit somewhat subconsciously (or at least unspokenly), decide that it’s okay to “wing it” in how we function as a team.
Without strong practices to ensure we’re doing our jobs correctly to prevent error, even the right decision is bound to be implemented poorly.
How do people within your organization gather and process information? How do they make decisions about how to act? Does dialogue lead to new ideas and speed? Or do new initiatives languish in circles until they eventually die?
The importance of leaders modeling behavioral norms for their subordinates doesn’t stop with decision-making. Leadership modeling open, honest, decisive dialogue that values intellectual honesty over all else is what sets the stage for good execution of those decisions.
Leaders need to pay close attention to their own dialogue. Is it modeling the sorts of behaviors that lead to decisiveness and follow-through? Or is it doing the opposite? This is one of the most difficult pieces for many executives to embrace. Leaders have every reason for self-confidence in their styles of behaving and communicating. After all, that style got them where they are today. But let’s reframe the situation for a moment:
Indecision within the leader’s team frequently leads to an erosion of their reputation. If the team can’t execute an important initiative, even if it’s organizational rather than core business, it can reflect poorly on the executive. From a career aspirations perspective, they may wind up not being taken seriously. Rebecca Knight, a veteran business columnist often featured in The New York Times, Harvard Business Review, and The Financial Times has a go-to phrase about dialogue being the “fundamental unit” of a company’s internal operations. We believe she’s correct. And treating it as such can mean the difference between an implemented decision and a false start.
Intellectual objectivity – a mental commitment to keeping one’s beliefs grounded in reality and logic, is known in the scientific community as epistemology. It’s what distinguishes a justified belief from an opinion. Most anyone reading that definition is surely nodding their heads and saying to themselves, “Yes, well, that’s how I do things.” And yet it’s not commonplace within the management of an organization.
More commonly, we see the director of a business unit concerned about the allocation of resources between their unit and those of their peers. We see conflict between production and sales regarding what a reasonable target is. But these and other worries are kept to themselves, and if a decision is made, it’s subtly or passively sabotaged in the weeks to come. Because our dialogue and our actions are ones of advocacy. This is sometimes even linked to our ability to create vulnerability for ourselves in front of our peers in leadership. It’s never entirely clear where responsibility lies in the strangulation of the initiative. But it is clear that it was likely dead on arrival from the moment the initial meeting adjourned.
Intellectual objectivity creates an environment where employees – and especially middle managers – are less inclined to protect their local interests and react to questioning defensively. Instead, they will more readily recognize the shared value of subordinating what’s valuable to them below what’s valuable to the organization.
In the same way that achieving buy-in requires soliciting the input of the group or individuals one needs the buy-in of, being committed to following through requires forging an emotional commitment to the outcome.
This question is the simplest way to cut right to the heart of issues around delegation and executive workloads. It’s a phenomenon that we usually attribute to someone’s first promotion into a supervisory position. HR professionals joke all the time, “They are such a great engineer. Let’s make them a manager instead.” You can substitute the “engineer” role for any profession – nurse, accountant, lawyer, machine operator – with the same effect.
Excellence in one skill set does not equate to excellence in another. And yet we allow it to happen constantly. A strong individual contributor is suddenly yanked out of that environment and placed in one where the expectations are entirely different. Often with precious little support or coaching.
The interesting thing is, despite many executives navigating that transition early in their careers and experiencing the difficulties, they continue to inflict the same experience onto those that follow them. But the real twist is that as they ascend out of middle management and into executive leadership roles, they often re-inflict that mistake on themselves. Perhaps it’s rugged individualism and self-confidence of the hard-working, ambitious lot that become company execs.
We touched on the need for a clear map of the organization’s current state. If a manager has been promoted into an executive role because they’ve stood out as a strong leader in their particular field, it’s worth examining whether that leader is still functioning in their field – or functioning as an executive. There’s working in the business. And there’s working on the business. If their primary activities are closely related to the professional discipline they came from, such as sales, medicine, engineering, accounting, law, etc., then they’re very likely still working in the business instead of on it. And they’re not functioning as a leader.
When a leader gets dragged into the daily machinations of an organization, they’re neglecting their real function. And they’re unintentionally damaging their own business.
That isn’t to say that a symbolic willingness to roll up your sleeves and help out with a front-line task doesn’t hold significant value. In fact, doing so displays an extremely important understanding of and respect for the day-to-day work of your people. But if you are involving yourself in routine tasks, management activities, or decisions that are not strategic because you must, just to keep things running, this is where the value stops.
Engaging in tasks better suited to the people who comprise your organization does little besides undermining and disempowering your employees. Every process that you become involved in slows down. And it eats away at your time and ability to focus on where you actually add the most value for the long-term success of your business. Put simply, it makes everyone in your company – including yourself – less effective.
Lack of experience is the one independent driver of indecision that will kill an initiative – and takes the right set of circumstances and coaching from their leaders for someone to overcome (see working on the business instead of in it). Naturally, we’re averse to trying to advance a significant initiative or project revolving around something we’ve never done before.
If a manager doesn’t have experience doing something, it’s essential that the organization bring in someone who does have that experience to either:A) partner with the internal leader on the implementation of the thing, or
The reputational impact of mistakes or negative outcomes is often a very real concern. Leaders should pay close attention to how the organization treats failure. Especially when they’re present in real time to reveal that failure. Take note of how employees react to errors and problems. Do they come together to understand and prevent future issues? Or is there a matter-of-fact scapegoat? Whether that scapegoat is a human being, equipment, or process isn’t as important as how it’s spoken of. Is it an individual problem or a team problem? Is it spoken of in past tense or future tense?
Are we working on a solution? How constructive is the answer? When the answer is useful and points to a solution or a path forward, we’ve got the kind of culture where we can think on our own and overcome obstacles. That’s a deciding culture – capable of executing. Clear on how new things get done.
When the answers are focused on the problem’s existence alone, employees do not feel confident to act to move the organization forward. That is a culture of indecision. They’re not working on implementing and executing. They’re working on what’s safest.
If you are a front-line employee reading this and wondering if your manager’s activities are indicative of indecision, make sure you’re not misdiagnosing the issue. Is it possible that your manager is not giving you specific direction on their decisions because they’re waiting to see if you will step up and take the reins?
However, if you’re a middle manager or member of the leadership team reading this article and you are not seeing your employees step up in the way that you would like, it’s much more likely that a different paragraph in this article is the cause.
Providing more data is only helpful when you’re dealing with a decisive leader. Increasing the amount of information that an indecisive leader has to absorb will only compound the problem. Instead, take charge by offering a clear recommendation about a path forward and indicating that you will proceed with it. Also, check with them early in the process to inform them of your progress and how things are going before you get too far down the road.
The problems caused by indecisive management are legion. But pulling these out as a whole by the roots is a straightforward matter of practice. If leaders can create an indecisive culture, they can also erase one just as easily. It may be uncomfortable for the leadership team with internal work to do, as is likely the case, but the rest of the organization will quickly sense the change in the wind and begin mirroring the new behaviors and expectations as naturally as they did with the original set.
In 1999, Richard Brown became the CEO of Electronic Data Systems. EDS at the time possessed a culture that Brown described as “lone heroes.” Its internal operating mechanisms reinforced that. And many of the issues described in this article were present – brought about and perpetuated by the executive team. Brown recognized the stage being set by his executive team and worked with Ram Charan to sow a new environment of executive behavioral norms that middle management could begin to emulate.
Openness, as Charan describes it today, means that the “outcome is not predetermined.” It aligns closely with an organization’s critical need for intellectual objectivity. Candor is a willingness to sniff out assumptions and challenge unspoken conflicts that masquerade as consensus. A commitment to informality prevents “stiff, prepackaged, orchestrated” meetings and decisions. It engenders comfort with questions and honest reactions. The aspect of closure is the same requirement as the disciplined application of important quality-assurance, error-proofing rituals leadership teams must apply to themselves when making decisions.
The leadership team should consistently practice mutually understood rituals within their own operating mechanisms. This means that practices like C-Suite team meetings are primarily used to establish clarity around decisions. Before any decisions continue to be made, the groundwork should already be done for transparent accountability in how decisions will be executed.
These practices around clear decision-making and accountability rituals should always include specificity in how they will be followed up on and how feedback will be provided. This is critical for redirecting undesirable behaviors – whether they are overt or subtle – and reinforcing the behaviors of those successfully embracing the new practices.
If dialogue is the basic unit of work within a company, as Rebecca Knight posits, then deliberate, constructive dialogue is the sharpest tool leaders can use to produce strong implementation practices.
Wielding dialogue as a tool to directly and honestly uncover issues and unspoken assumptions preventing teams from executing leadership decisions should be done carefully. Having the willingness to do so should be tempered by a practice of ensuring that it’s done in a way that shows employees that the leader cares about both them as individuals as well as the outcome. The dialogue should be used not to cut down employees or their actions, but to make them better. Caring, constructive, useful dialogue that simultaneously roots out problems and uplifts the people involved. Leaving them more enthusiastic about the outcome than before.
These rituals will also help to cement the role of the executive as coach and leader – not practitioner. Clear accountability includes the C-Suite holding one another accountable for a commitment to their proper role within the organization. Checking in on implementation teams, coaching them if they are struggling, and providing guidance, is the proper role of the executive.
Executive team members that inadvertently slide back into old habits of “doing it myself” in the business alongside the day-to-day practices of the departments in their field should be coached back on to the business by their peers.
In the venerable words of the late Bill Campbell, the world famous executive coach of none other than Steve Jobs, Jeff Bezos, Tim Cook, Larry Page, Marry Meeker, Sergey Brin, Mark Zuckerberg, Ben Horowitz, and many other incredible people, “Do you encourage courage? It's leadership's job to make people more courageous. Courage is hard. People are naturally afraid of taking risks out of fear of failure. It's the manager's job to push them past the reticence.”
While it feels almost sacrilegious to suggest a course of action immediately after quoting Bill Campbell, he would likely agree with us that every executive team should be working with a coach. All leaders, at no fault of their own, lack the ability to see themselves as others do. Actively developing oneself into a more aware, confident, and productive leader of people requires a coaching relationship.
The right mentorship from an experienced peer in the C-Suite space provides a critical, objective perspective. Allowing an executive to sharpen leadership and communication skills, develop a strong understanding of how to forge durable relationships, and hone their ability to motivate and coach others in turn.
The traditional model of executive coaching relies on ‘coaching from afar.’ While valuable, this method relies on a naturally biased perspective of the organization – the coachee’s. To combat this, companies may embed a coaching officer within their organization (and ideally within the leadership team) to develop a holistic view of the internal challenges at play, the leadership team dynamics, and countless other details of the organization. This style of coaching drives a better-informed coaching relationship that can also respond to evolving organizational needs in an agile manner. It also allows for the measurement of direct results of coaching outcomes, as well as the extent to which an executive coachee is embracing the behaviors and disciplined practices necessary to dispel a culture of indecision, among many other issues.
Feeling overwhelmed by this or want an expert opinion? Schedule a consult with Wayforward.
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